[Federal Register Volume 86, Number 8 (Wednesday, January 13, 2021)]
[Rules and Regulations]
[Pages 2541-2542]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00297]


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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Parts 4071 and 4302

RIN 1212-AB45


Adjustment of Civil Penalties for Inflation

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 for inflation the maximum civil 
penalty for failure to provide certain notices or other material 
information and for failure to provide certain multiemployer plan 
notices.

DATES: 
    Effective date: This rule is effective on January 13, 2021.
    Applicability date: The increases in the civil monetary penalties 
under sections 4071 and 4302 of the Employee Retirement Income Security 
Act provided for in this rule apply to such penalties assessed after 
January 13, 2021.

FOR FURTHER INFORMATION CONTACT: Gregory Katz ([email protected]), 
Attorney, Regulatory Affairs Division, Pension Benefit Guaranty 
Corporation, 1200 K Street NW, Washington, DC 20005-4026; 202-229-3829. 
(TTY users may call the Federal relay service toll-free at 800-877-8339 
and ask to be connected to 202-229-3829.)

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 and 
Office of Management and Budget guidance M-21-10. The rule adjusts, as 
required for 2021, the maximum civil penalties under 29 CFR 4071 and 29 
CFR 4302 that the Pension Benefit Guaranty Corporation (PBGC) may 
assess for failure to provide certain notices or other material 
information and certain multiemployer plan notices.
    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 Employee Retirement 
Income Security Act of 1974 (ERISA).

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 $2,259 for section 4071 penalties and $301 for 
section 4302 penalties.

Background

    PBGC administers title IV of 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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[[Page 2542]]

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 published by January 15 each year after 2016.
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    \2\ Sec. 701, Public Law 114-74, 129 Stat. 599-601 (Bipartisan 
Budget Act of 2015).
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    On December 23, 2020, the Office of Management and Budget issued 
memorandum M-21-10 on implementation of the 2021 annual inflation 
adjustment pursuant to the 2015 Act.\3\ The memorandum provides 
agencies with the cost-of-living adjustment multiplier for 2021, which 
is based on the Consumer Price Index (CPI-U) for the month of October 
2020, not seasonally adjusted. The multiplier for 2021 is 1.01182. The 
adjusted maximum amounts are $2,259 for section 4071 penalties and $301 
for section 4302 penalties.
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    \3\ See M-21-10, Implementation of Penalty Inflation Adjustments 
for 2021, Pursuant to the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015, https://www.whitehouse.gov/wp-content/uploads/2020/12/M-21-10.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 its review. As this is not a significant 
regulatory action under E.O. 12866, it is not considered an E.O. 13771 
regulatory action.
    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, PBGC amends 29 CFR parts 4071 
and 4302 as follows:

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 ``$2,233'' are removed and the figures 
``$2,259'' 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 ``$297'' are removed and the figures 
``$301'' are added in their place.

    Issued in Washington, DC, by:
Gordon Hartogensis,
Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2021-00297 Filed 1-12-21; 8:45 am]
BILLING CODE 7709-02-P