ERISA 401k Violations Can Include Both Civil and Criminal Penalties
By admin ~ October 4th, 2009. Filed under: General.
According to the US Department of Labor, The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for retirement and health benefit plans in the private industry. ERISA requires that those who establish plans must meet certain minimum standards. ERISA requirements provide that those individuals who manage plans must meet certain standards of conduct. The law also contains detailed provisions for reporting to the government and disclosure to participants. There also are provisions aimed at assuring plan funds are protected and that participants who qualify receive their benefits.
ERISA confers substantial law enforcement responsibilities on the Department of Labor. Part five of Title I of ERISA gives the Department authority to bring a civil action to correct violations of the law, provides investigative authority to determine whether any person has violated Title I, and imposes criminal penalties on any person who willfully violates any provision of Part 1 of Title I.
When voluntary compliance is not achieved, the Employee Benefits Security Administration (EBSA) may refer a case to Labor Department attorneys for litigation. EBSA has authority under ERISA Section 502(c)(2) to assess civil penalties for reporting violations.
A penalty of up to $1,000 per day may be assessed against plan administrators who fail or refuse to comply with annual reporting requirements. Section 502(i) gives the agency authority to assess civil penalties against parties in interest who engage in prohibited transactions with welfare and nonqualified pension plans. The penalty can range from five percent to 100 percent of the amount involved in a transaction.
Cathy Baniewicz has over 30 years experience in human resources. Her career began at Beatrice Foods Co., where she progressed to Assistant Director of Affirmative Action and Corporate Personnel Manager. Prior to joining EffortlessHR, Cathy was Assistant Director of Human Resources at Golden Eagle Distributors, Inc. (Budweiser). Cathy has her B.A. degree from DePaul University, Chicago, Illinois, and MBA from George Williams College, Aurora, Illinois.
Cathy obtained her Professional in Human Resources (PHR) certification in December of 2004. EffortlessHR is an online Human Resources Program for small businesses. This program will guide you through the maze of human resource laws and issues. You will have access to your employee information anytime, anyplace. Federal and State laws, personnel forms, How To guides, posters and reports are at your fingertips.
For more information, go to http://www.effortlesshr.com/, or call us at (520) 546-3947. We also have business forms available at http://www.effortlessforms.com/
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