In November of 2015, Congress enacted the Federal Civil Monetary Penalties Inflation Adjustment Act Improvements Act to apply inflation adjustments to various penalties defined under the Federal Civil Inflation Adjustment Act of 1990. One of those penalties was the $10 per employee penalty for failure to furnish reports to certain former participants and beneficiaries or maintain records. The new penalty, as published in the Federal Register (Table C), is now $28 per employee, effective August 1, 2016.
With the growth of auto enrollment in the 10 years since the passage of the Pension Protection Act, combined with the increase in workforce mobility over that time (the “gig” economy), employers are struggling to maintain current addresses for former participants. In October of 2013, the ERISA Advisory Council held a session to establish best practices for finding missing participants – a summary of the findings can be found here, and is an excellent resource for best practices and legal guidance. As a recognized thought leader in the area of lost participant search, Retirement Clearinghouse was asked to submit testimony.