DOL Penalty Increase for Retirement Plans

DOL Penalty Increase for Retirement Plans

DOL Penalty Increase for Retirement Plans

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  • On January 27, 2025
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The Department of Labor (DOL) is increasing penalties for certain violations related to retirement plans, effective beginning January 2025. This change reflects a push to enhance compliance with federal regulations and ensure retirement plan administrators meet their fiduciary responsibilities. The higher penalties aim to discourage non-compliance with requirements such as timely filing of reports and providing correct disclosures. The increased fines are designed to promote better protection for plan participants and improve the overall integrity of retirement planning systems.

Here’s a comparison of the penalty increases between 2024 and 2025:

Violation Type 2024 2025
Late Filing of Form 5500 $2,670 per day (inflation-adjusted) $2,739 per day (inflation-adjusted)
Failure to Notify Defined Contribution Plan Participants of the Blackout Period $169 per participant per day $173 per participant per day
Failure to furnish plan-related information requested by the DOL $190 per day, capped at $1,906 per request $195 per day, capped at $1,956 per request
Failure to properly provide benefit statements and maintain records vis-à-vis former participants and beneficiaries $37 per participant per day $38 per participant per day
Failure to provide auto-enrolment notice $2,112 per day for each failure $2,167 per day for each failure

With increased penalties for non-compliance, it’s more important than ever for retirement plan sponsors to review their practices and procedures. By understanding the new penalties and taking proactive steps, businesses can avoid costly fines while ensuring their employees’ retirement security remains intact.

By

Amber Mehta
Partner - International Assurance

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