2021 Penalty Amounts for 401(k) Plans

On January 14, 2021, the U.S. Department of Labor (“DOL”) published its annual announcement of civil monetary penalties for various employee benefits-related violations under ERISA, as in effect for calendar year 2021. To encourage compliance with the law, ERISA imposes various sanctions, including fines, which are subject to adjustment each year for inflation. Legislation enacted in 2015 requires that the annual inflation-related adjustments be issued by no later than January 15th of each year.

This article addresses the 2021 monetary penalties for 401(k) retirement plans. See also our recent article addressing the 2021 monetary penalties for Health and Welfare plans.

The updated DOL penalty amounts for ERISA health and welfare plans for 2021, compared with the corresponding amounts for last year, appear below:

Compliance Failure
Failure to timely file a properly completed ERISA Form 5500
$2,233 per day
$2,259 per day
Failure to provide Secretary of Labor requested documentation
$159 per day, not to exceed $1,594 per request
$161 per day, not to exceed $1,1613 per request
Failure to provide Auto-Enrollment Notice
$1,767 per failure
$1,788 per failure
Failure to provide “Blackout” Notice or Right of Diversification Notice
$141 per failure
$143 per failure
Failure to furnish reports (e.g., Benefit Statements) or maintain records
$31 per employee
$31 per employee

Effective Date. The penalty amount adjustments are effective for penalties assessed after January 15, 2021.

The information and content contained in this blog post are for general informational purposes only, and does not, and is not intended to, constitute legal advice.

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