U.S. Labor Department proposes civil penalty rules for multiemployer defined benefit pension plans that fail to take corrective funding action
WASHINGTON — The U.S. Department of Labor has proposed a regulation to assess civil penalties against plan sponsors of multiemployer defined benefit pension plans that fail to adopt a funding improvement or rehabilitation plan in accordance with the Employee Retirement Income Security Act (ERISA) as amended by the Pension Protection Act (PPA). The PPA amended ERISA and the Internal Revenue Code to require those plans certified to be in endangered or critical status to adopt a funding improvement plan or a rehabilitation plan within 240 days from the required date of the certification. PPA also gave the Labor Department authority to assess civil monetary penalties of up to $1,100 per day against plan sponsors that fail to timely adopt funding improvement or rehabilitation plans. The proposed regulation sets forth the administrative procedures for assessing and contesting such penalties.