[firm] blog logo

PBGC Issues Final Rule for Penalty Relief for Late Premium Payments

The PBGC issued a final rule implementing relief for penalties resulting from late payment of premiums. The final rule implements the changes reflected in the proposed rule published in April.Under the final rule, if the plan sponsor corrects the delinquency before being notified by the PBGC, the plan would be responsible for a monthly penalty of 0.5 percent of the late premium amount and, if the plan corrects the delinquency after being notified by the PBGC, it would be responsible for a monthly penalty premium of 2.5 percent. These penalties are reduced from 1 percent and 5 percent, respectively. In addition, if the sponsor has a good payment history and pays promptly after receiving the PBGC notice, the PBGC will waive 80 percent of the 2.5 percent penalty payment. Read the final rule.

PBGC Missing Participant Program to Include 401(k) Plans and Certain Other Plans That Terminate after 2017

The PBGC issued a proposed rule that would expand its existing missing participants program to cover terminated defined contribution plans, such as 401(k) and profit-sharing plans, as well as certain other plans not currently covered under the program, that voluntarily elect to participate. Under the program, for a low one-time fee, and following a diligent search, the terminating plan may transfer the account balances or accrued benefits of all missing participants to the PBGC. The PBGC will then maintain a centralized, online searchable directory of the missing participants and periodically search for the missing participants. In the proposed rule, the PBGC also modifies the criteria for a participant to be considered ”missing” and provides specific diligent search rules for plans to attempt to locate missing participants. Read the proposed rule.

Wellness Programs and EEOC Enforcement

A federal judge recently ruled in favor of an employee wellness program charged by the EEOC with violations of the Americans with Disabilities Act (the “ADA“), but for a reason of little future use to employers while simultaneously rejecting what had been one of their best and most successful arguments. In 2014, the EEOC brought civil actions against three separate employers (Orion Energy Systems, Inc.; Flambeau, Inc.; and Honeywell International, Inc.) for alleged violations of the ADA by their employee wellness programs. In Honeywell, the EEOC also alleged violations under the Genetic Information Nondiscrimination Act (“GINA“). All three employers decided to contest the EEOC’s actions. The heavy negative attention given to the EEOC’s enforcement actions in the absence of any regulatory or other formal guidance eventually pressured the EEOC to issue regulations addressing the impact of the ADA and GINA on employer-provided wellness programs, which we addressed in May. On… Continue Reading

September 2016
S M T W T F S
 123
45678910
11121314151617
18192021222324
252627282930  

Archives