DOL Publishes PPA Civil Penalty Rules

The U.S. Department of Labor published in today's Federal Register a final regulation implementing the department's authority to assess civil penalties against plan administrators who fail to give employees notice of the right to sell company stock in their pension plan accounts.

"The Pension Protection Act enacted President Bush's proposal to guarantee workers the right to sell company stock in their 401(k)-type plans," said Bradford P. Campbell, assistant secretary of DOL's Employee Benefits Security Administration. "The new right to diversify is an important step in improving retirement security. This rule enforces that right by penalizing plan officials who fail to give workers the required notice."

PPA established rights of plan participants and beneficiaries to sell the company stock in their accounts and reinvest the proceeds into other investments available under a plan. It also requires plan administrators to notify participants and beneficiaries of this new right and of the importance of diversifying the investment of retirement account assets. In addition, PPA gives the department authority to assess civil monetary penalties up to $100 per day against plan administrators for each violation of the new notice requirement.

The public may submit comments to [email protected] or through the federal e-rulemaking portal at www.regulations.gov. Paper-based comments should be sent to the Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N-5669, U.S. Department of Labor, 200 Constitution Ave., N.W., Washington, D.C. 20210, Attention: 502(c)(7) Civil Penalty.

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