The Department of Labor recently issued final regulations for processing civil penalties against pension plan administrators who fail to furnish certain documents to participants, beneficiaries and others.

The Pension Protection Act of 2006 established new disclosure rules on notices and certain documents pertaining to funding-based limits on benefit accruals and certain benefit distributions; plan actuarial and financial reports; withdrawal liability of contributing employers; and participants' rights and obligations under automatic contribution arrangements.

The law allows federal regulators to consider civil fees of up to $1,000 per day against plan administrators who fall short in disclosing such information.

"If more than one person is responsible as administrator for the failure to provide the required items, all such persons shall be jointly and severally liable for such failure," the regulation states. The DOL, however, may decide to waive all or part of the penalty.

The new rules also outline how the maximum penalty amounts are calculated and identify the situations in which a penalty may be considered. The guidance explains the procedure the DOL will follow in filing a civil penalty.

For instance, the DOL will provide the plan administrator with a written notice explaining the penalty assessment, the amount of the penalty, the number of participants and beneficiaries affected by the penalty and the period in which it occurred.

The regulation recognizes that a plan administrator's noncompliance may be due to mitigating circumstances. If so, the administrator has 30 days from the date of receiving the notice to file a statement explaining the situation. The plan administrator or sponsor may contest an assessment by requesting an administrative hearing.

Related EBN coverage:

• Financial turmoil sparks debate over Pension Protection Act
• Conflicting reports of stance on future of retirement plans put lawmaker on defensive
• Resuscitating DC plans