[Federal Register Volume 82, Number 19 (Tuesday, January 31, 2017)]
[Rules and Regulations]
[Pages 8813-8814]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-01074]


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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Parts 4071 and 4302

RIN 1212-AB33


Adjustment of Civil Penalties

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Final rule.

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SUMMARY: The Pension Benefit Guaranty Corporation is required to amend 
its regulations annually to adjust the penalties provided for in 
sections 4071 and 4302 of the Employee Retirement Income Security Act 
of 1974. This action is being taken in accordance with the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and 
Office of Management and Budget memorandum M-17-11. The regulations 
being amended are those on Penalties for Failure to Provide Certain 
Notices or Other Material Information and Penalties for Failure to 
Provide Certain Multiemployer Plan Notices.

DATES: Effective date: This rule is effective on January 31, 2017.
    Applicability date: The increases in the civil monetary penalties 
under sections 4071 and 4302 provided for in this rule apply to such 
penalties assessed after January 31, 2017.

FOR FURTHER INFORMATION CONTACT: Stephanie Cibinic, Deputy Assistant 
General Counsel for Regulatory Affairs ([email protected]), 
Office of the General Counsel, Pension Benefit Guaranty Corporation, 
1200 K Street NW., Washington, DC 20005-4026; 202-326-4400 extension 
6352. (TTY and TDD users may call the Federal relay service toll-free 
at 800-877-8339 and ask to be connected to 202-326-4400 extension 
6352.)

SUPPLEMENTARY INFORMATION: 

Executive Summary

Purpose of the Regulatory Action

    This rule is needed to carry out the requirements of the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The 
rule finalizes the 2016 interim final regulations required under the 
2015 act and further adjusts, as required for 2017, the maximum civil 
penalties that PBGC may assess for failure to provide certain notices 
or other material information.
    PBGC's legal authority for this action comes from the Federal Civil 
Penalties Inflation Adjustment Act of 1990 as amended by the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and 
from sections 4002(b)(3), 4071, and 4302 of the

[[Page 8814]]

Employee Retirement Income Security Act of 1974.

Major Provisions of the Regulatory Action

    This rule adjusts as required by law the maximum civil penalties 
that PBGC may assess under sections 4071 and 4302 of ERISA. The new 
maximum amounts are $2,097 for section 4071 penalties and $279 for 
section 4302 penalties.

Background

    The Pension Benefit Guaranty Corporation (PBGC) administers title 
IV of the Employee Retirement Income Security Act of 1974 (ERISA). 
Title IV has two provisions that authorize PBGC to assess civil 
monetary penalties.\1\ Section 4302, added to ERISA by the 
Multiemployer Pension Plan Amendments Act of 1980, authorizes PBGC to 
assess a civil penalty of up to $100 a day for failure to provide a 
notice under subtitle E of title IV of ERISA (dealing with 
multiemployer plans). Section 4071, added to ERISA by the Omnibus 
Budget Reconciliation Act of 1987, authorizes PBGC to assess a civil 
penalty of up to $1,000 a day for failure to provide a notice or other 
material information under subtitles A, B, and C of title IV and 
sections 303(k)(4) and 306(g)(4) of title I of ERISA.
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    \1\ Under the Federal Civil Penalties Inflation Adjustment Act 
of 1990, a penalty is a civil monetary penalty if (among other 
things) it is for a specific monetary amount or has a maximum amount 
specified by Federal law. Title IV also provides (in section 4007) 
for penalties for late payment of premiums, but those penalties are 
neither in a specified amount nor subject to a specified maximum 
amount.
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Adjustment of Civil Penalties

    On November 2, 2015, the President signed into law the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015,\2\ 
which requires agencies to adjust civil monetary penalties for 
inflation and to publish the adjustments in the Federal Register. An 
initial adjustment was required to be made by interim final rule 
published by July 1, 2016, and effective by August 1, 2016. Subsequent 
adjustments must be promulgated in January each year after 2016. In an 
interim final rule published on May 13, 2016 (at 81 FR 29765), PBGC 
adjusted the maximum penalty under section 4071 to $2,063 and adjusted 
the maximum penalty under section 4302 to $275.\3\
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    \2\ Sec. 701, Public Law 114-74, 129 Stat. 599-601 (Bipartisan 
Budget Act of 2015).
    \3\ The Office of Management and Budget issued memorandum M-16-
06 on implementation of the 2015 act, including multipliers to use 
in the initial adjustment.
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    On December 16, 2016, the Office of Management and Budget issued 
memorandum M-17-11 on implementation of the 2017 annual adjustment 
pursuant to the 2015 act.\4\ The memorandum provides agencies with the 
cost-of-living adjustment multiplier for 2017, which is based on the 
Consumer Price Index (CPI-U) for the month of October 2016, not 
seasonally adjusted. The multiplier for 2017 is 1.01636. The memorandum 
also provides guidance to agencies on finalizing their 2016 interim 
final rules. Accordingly, PBGC is adopting the 2016 interim final rule 
with a change to the maximum penalty amount for 2017 as required by the 
2015 act and Office of Management and Budget memorandum M-17-11. The 
adjusted maximum amounts are $2,097 for section 4071 penalties and $279 
for section 4302 penalties.
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    \4\ https://www.whitehouse.gov/sites/default/files/omb/memoranda/2017/m-17-11_0.pdf.
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Compliance With Regulatory Requirements

    The Office of Management and Budget has determined that this rule 
is not a ``significant regulatory action'' under Executive Order 12866 
and therefore not subject to their review.
    The Office of Management and Budget also has determined that notice 
and public comment on this final rule are unnecessary because the 
adjustment of civil penalties implemented in the rule is required by 
law. See 5 U.S.C. 553(b).
    Because no general notice of proposed rulemaking is required for 
this rule, the Regulatory Flexibility Act of 1980 does not apply. See 5 
U.S.C. 601(2).

List of Subjects

29 CFR Part 4071

    Penalties.

29 CFR Part 4302

    Penalties.

    In consideration of the foregoing, the interim final rule, which 
was published at 81 FR 29765 on May 13, 2016, is adopted as a final 
rule with the following changes:

PART 4071--PENALTIES FOR FAILURE TO PROVIDE CERTAIN NOTICES OR 
OTHER MATERIAL INFORMATION

0
1. The authority citation for part 4071 continues to read as follows:

    Authority:  28 U.S.C. 2461 note, as amended by sec. 701, Pub. L. 
114-74, 129 Stat. 599-601; 29 U.S.C. 1302(b)(3), 1371.


Sec.  4071.3   [Amended]

0
2. In Sec.  4071.3, the figures ``; $2,063'' are removed and the 
figures ``$2,097'' are added in their place.

PART 4302--PENALTIES FOR FAILURE TO PROVIDE CERTAIN MULTIEMPLOYER 
PLAN NOTICES

0
3. The authority citation for part 4302 continues to read as follows:

    Authority:  28 U.S.C. 2461 note, as amended by sec. 701, Pub. L. 
114-74, 129 Stat. 599-601; 29 U.S.C. 1302(b)(3), 1452.


Sec.  4302.3  [Amended]

0
4. In Sec.  4302.3, the figures ``$275'' are removed and the figures 
``$279'' are added in their place.

    Issued in Washington, DC.
W. Thomas Reeder,
Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2017-01074 Filed 1-30-17; 8:45 am]
 BILLING CODE 7709-02-P