Historical context and authority
SUPPLEMENTARY INFORMATION: Section 31001(s) of the Debt Collection Improvement Act of 1996 (Act), Pub. Source
Only CMPs that are specified by statute or regulation in dollar amounts are adjusted under the 1990 Act, as amended. Source
The statutory citations for each of the CMPs under title I of ERISA that are subject to adjustment are set forth in columns (A) and (B) of the table.\1\ Column (C) briefly describes the nature of the violations associated with these citations. Source
This is the first COLA adjustment to the section 502(c)(5) and 502(c)(6) CMPs and the adjustment to each CMP does not exceed the statutory cap. Source
Section 502(c)(5) was added to title I of ERISA by the Health Insurance Portability and Accountability Act of 1996, and section 502(c)(6) was added to title I of ERISA by the Taxpayer Relief Act of 1997. Source
The amendments implement the statutory adjustment required by the 1990 Act, as amended, and having no impact that is separate from that of the statutory provisions, are not ``significant'' under Executive Order 12866. Source
The Department does not anticipate that this final rule will impose a significant impact on a substantial number of small entities because it is expected to have no impact that is separate from the statutory adjustment required by the 1990 Act, as amended. Source
Unfunded Mandates Reform Act For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. Source
Section 31001(s) of the Debt Collection Improvement Act of 1996 (the Act, Public Law 104-134, 110 Stat. Source
Scope of the federal rule
DATES: This final rule is effective on March 24, 2003, and applies only to violations occurring after March 24, 2003. Source
The first adjustment to the CMPs under title I of ERISA was published in the Federal Register on July 29, 1997 (62 FR 40696), for incorporation into subpart E of part 2570 of chapter XXV of title 29 of the Code of Federal Regulations (CFR). Source
Columns (F), (G), (H), (I), and (J) contain the intermediate results of applying the series of steps mandated by the 1990 Act, as amended. Source
The methodology of the 1990 Act, as amended, could not result in a cost-of-living adjustment for CMPs enacted in 2002, for purposes of this final rule, by virtue of how the adjustment is calculated. Source
Specifically, the 1990 Act, as amended, provides that the required inflation adjustment shall be determined by increasing the maximum CMP amount or the range of maximum and minimum CMP amounts, as applicable, for each CMP by a cost-of-living adjustment (COLA). Source
The term ``Consumer Price Index'' is defined in the 1990 Act, as amended, to mean the Consumer Price Index for All-Urban Consumers published by the U.S. Source
The Department did not exercise discretion as to the calculation of the CMP adjustments and the final rule involves minor technical amendments to part 2575 of title 29 of the CFR for only two CMPs. Source
Final Rule In view of the foregoing, subpart A of part 2575 of chapter XXV of title 29 of the Code of Federal Regulations is amended as follows: PART 2575--[AMENDED] 1. Source
Treasury offset procedures
Notice and collection administration
Notice and Public Comment As a general matter, the Administrative Procedure Act (APA) requires rulemakings to be published in the Federal Register and also mandates that an opportunity for comments be provided when an agency promulgates regulations. Source
601 et seq.) (RFA) requires each Federal agency to perform a regulatory flexibility analysis for all rules subject to the notice and comment requirements of section 553(b) of the Administrative Procedure Act (5 U.S.C 551 et seq.) unless the head of the agency certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities. Source
The Department finds for good cause that notice and comment on the two CMP adjustments is unnecessary pursuant to section 553(b)(3)(B) of the APA. Source
Executive Order 12866 Under Executive Order 12866, the Department must determine whether a regulatory action is ``significant'' and therefore subject to the requirements of the Executive Order and subject to review by the Office of Management and Budget (OMB). Source
Pursuant to the terms of the Executive Order, it has been determined that this action is not ``significant'' and therefore is not subject to review by OMB. Source
Because this rule is being issued as a final rule without notice and comment under the provision of section 553(b)(3)(B) of the APA, the RFA does not apply and the Department is not required to either certify that the rule will not have a significant impact on a substantial number of small entities or conduct a regulatory flexibility analysis. Source
Executive Order 13132 The Department has reviewed this regulation in accordance with Executive Order 13132 regarding federalism, and has determined that it does not have ``federalism implications.'' The rule does not have substantial direct effects on the States, or on the distribution of power and responsibilities among the various levels of government. Source
Interest, penalties, and charges
abstract":"This document contains a final rule that adjusts the civil monetary penalties under title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA), pursuant to the requirements of the Federal Civil Penalties Inflation Adjustment Act of 1990 (1990 Act), as amended by the Debt Collection Improvement Act of 1996 (Act). Source
----------------------------------------------------------------------- SUMMARY: This document contains a final rule that adjusts the civil monetary penalties under title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA), pursuant to the requirements of the Federal Civil Penalties Inflation Adjustment Act of 1990 (1990 Act), as amended by the Debt Collection Improvement Act of 1996 (Act). Source
The term ``civil monetary penalty'' is defined in the 1990 Act to mean any penalty, fine or other sanction that is for a specific monetary amount as provided by Federal law; or has a maximum amount provided for by Federal law; and is assessed or enforced by an agency pursuant to Federal law; and is assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal courts. Source
Section 553(b)(3)(B) of the APA exempts certain rules or agency procedures from the notice and comment requirements when an agency finds for good cause that notice and public comment are impracticable, unnecessary, or contrary to the public interest. Source
Federal Register, Volume 68 Issue 14 (Wednesday, January 22, 2003) [Federal Register Volume 68, Number 14 (Wednesday, January 22, 2003)] [Rules and Regulations] [Pages 2875-2879] From the Federal Register Online via the Government Publishing Office [ www.gpo.gov ] [FR Doc No: 03-1271] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF LABOR Pension and Welfare Benefits Administration 29 CFR Part 2575 RIN 1210-AA95 Final Rule Relating to Adjustment of Civil Monetary Penalties AGENCY: Pension and Welfare Benefits Administration, Department of Labor. Source
The Act amended the 1990 Act to require generally the adjustment of civil monetary penalties for inflation no later than 180 days after the enactment of the Act, and at least once every four years thereafter, in accordance with the guidelines specified in the 1990 Act, as amended. Source
The final rule affects employee benefit plans, plan administrators, plan sponsors, fiduciaries of employee benefit plans, plan participants and beneficiaries, and other persons subject to the civil monetary penalties under title I of ERISA. Source
The table set forth below, entitled ``Inflation Adjustment of Civil Monetary Penalties Under Title I of ERISA--2003'' (table) contains a list of civil penalties under title I of ERISA for which a determination must be made as to whether an inflation adjustment is mandated by the 1990 Act, as amended. Source
Column (D) of the table indicates the dollar amount of each CMP to be adjusted, and column (E) sets forth the year that each penalty was established by law or last adjusted. Source
Reference should be made to column (K) of the table to determine the effect of the dollar amounts of the final penalty adjustments by the rule contained in this document pursuant to the requirements of the 1990 Act, as amended. Source
Under this provision, the Secretary may assess a civil penalty of up to $100 a day from the date of the plan administrator's failure or refusal to provide notice to a participant or beneficiary in accordance with ERISA section 101(i). Source
Inflation Adjustment of Civil Monetary Penalties Under Title I of ERISA--2003 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ (G) (E) Year Penalty Penalty (F) CPI- After Raw (H) (I) (J) (K) New Penalty (A) U.S. Source
Code Citation (B) ERISA Title I (C) Nature of (D) Penalty Amount Last Set U for Adjustment Unrounded Round to Rounded Amount = Col. Source
In order to calculate the raw inflation adjustment, it is necessary to multiply the penalty amount to be adjusted by the relevant COLA. Source
The subtraction of the penalty amount to be adjusted from this product yields the unrounded penalty increase. Source
Specifically, any increase in the maximum CMP or the range of maximum and minimum CMPs, as applicable, must be rounded to the nearest: (1) Multiple of $10 in the case of penalties less than or equal to $100; (2) Multiple of $100 in the case of penalties greater than $100 but less than or equal to $1,000; (3) Multiple of $1,000 in the case of penalties greater than $1,000 but less than or equal to $10,000; (4) Multiple of $5,000 in the case of penalties greater than $10,000 but less than or equal to $100,000; (5) Multiple of $10,000 in the case of penalties greater than $100,000 but less than or equal to $200,000; and (6) Multiple of $25,000 in the case of penalties greater than $200,000. Source
These amounts are determined for each penalty according to these rules and appear in column (I) of the table. Source
Once the penalty increase has been rounded in accordance with the procedures set forth in the 1990 Act, as amended (see column (J) of the table) the rounded increase must be added to the penalty to be adjusted to determine the revised penalty amounts. Source
As required by the Act for each civil monetary penalty, the Department has applied the relevant COLA to the penalty amount to be adjusted, rounded the penalty increase as prescribed under the 1990 Act, and added the increase to the unadjusted penalty to determine changes, if any, in the penalty amounts. Source
The recalculation resulted in a small penalty increase of 10 percent to the penalty amounts contained in sections 502(c)(5) and 502(c)(6) of ERISA. Source
No other adjustments are required for civil penalties under ERISA as a result of the recalculation. Source
Statutory Authority This regulation is adopted pursuant to the authority contained in the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. Source
List of Subjects in 29 CFR Part 2575 Administrative practice and procedure, Employee benefit plans, Employee Retirement Income Security Act, Penalties, Pensions, Pension and Welfare Benefits Administration. Source
In accordance with the requirements of the 1990 Act, as amended, the maximum amount of the civil monetary penalty established by section 502(c)(5) of the Employee Retirement Income Security Act of 1974, as amended (ERISA), is hereby increased from $1,000 a day to $1,100 a day. Source
This adjusted penalty applies only to violations occurring after March 24, 2003. Source
In accordance with the requirements of the 1990 Act, as amended, the maximum amount of the civil monetary penalty established by section 502(c)(6) of the Employee Retirement Income Security Act of 1974, as amended (ERISA), is hereby increased from $100 a day but in no event in excess of $1,000 per request to $110 a day but in no event in excess of $1,100 per request. Source
Government obligations and implementation
3501 et seq.) because it does not contain a ``collection of information'' as defined in 44 U.S.C. Source
The Act specifies that any such increase in a CMP shall apply only to violations that occur after the date the increase takes effect. Source
These regulatory provisions were redesignated and transferred to subpart A of part 2575 of chapter XXV of title 29 of the CFR on August 3, 1999. Source
The term ``cost-of- living adjustment'' is defined in the Act as the percentage for each CMP by which the Consumer Price Index (CPI) for the month of June of the calendar year preceding the adjustment exceeds the CPI for the month of June of the calendar year in which the amount of such CMP was last set or adjusted by law. Source
Accordingly, to calculate the COLA it is necessary to divide the CPI for June of the calendar year preceding the adjustment \2\ by the CPI for June of the calendar year in which the CMP was last set by law or adjusted for inflation. Source
Because the applicability date applies to violations occurring after March 24, 2003, the year of adjustment is 2003. Source
Accordingly, the CPI for June 2002 (i.e., the CPI for the year prior to the adjustment) is used for this calculation and its value is 538.9 using the 1967-year as the base year. Source
Small entities include small businesses, organizations, and governmental jurisdictions. Source
Section 514 of ERISA provides, with certain specifically enumerated exceptions not applicable here, that the provisions of titles I and IV of ERISA supersede any and all laws of the States as they relate to any employee benefit plan covered under ERISA. Source
The authority citation for part 2575 is revised to read as follows: Authority: Pub. Source
Combs, Assistant Secretary, Pension and Welfare Benefits Administration, Department of Labor. Source