Labor & Employment Law Daily Wrap Up, FEDERAL REGULATIONS—PBGC proposes formal penalty framework for late pension filings and notices, (Jul 20, 2026)

By WK Editorial Staff

PBGC acknowledges that from 2019 to 2024 it maintained an internal non-enforcement policy for certain reportable-event and 4010 filing violations while this rule was being developed, and it has not proposed to codify that non-enforcement approach.

The Pension Benefit Guaranty Corporation has proposed new regulations that would formally establish how the agency calculates, assesses, and waives penalties when pension plans, plan sponsors, and administrators fail to submit required notices, reports, or other information on time.

The proposed rule, scheduled for publication in the Federal Register on July 21, would replace PBGC's current penalty policy guidance dating back to 1995 and would, for the first time, codify the agency's approach for both single-employer and multiemployer pension plans. According to PBGC, the proposal is intended to provide greater transparency and consistency while continuing to encourage voluntary compliance and self-correction.

Well below maximums. PBGC said the rule would generally set penalty amounts well below statutory maximums and would establish circumstances in which penalties may be reduced or waived. The agency said it would continue to consider factors such as reasonable cause, legal errors, agency delays, self-correction efforts, and preventive compliance measures when deciding whether penalties should be imposed.

For most late filings subject to ERISA Section 4071, PBGC proposes penalties of $25 per day for the first 90 days of delinquency and $50 per day thereafter. Plans with fewer than 100 participants would generally receive proportionately reduced penalties, subject to minimum daily amounts.

Discretionary. The proposal would establish higher penalties for certain reportable events that PBGC considers more time-sensitive or potentially harmful to participants and the pension insurance program. For example, some reportable event violations would carry a $100-per-day penalty, while failures involving advance notice reportable events or missed contributions exceeding $1 million would generally be assessed at $1,000 per day.

PBGC also proposes $1,000-per-day penalties for failures to report substantial cessations of operations under ERISA Section 4062(e) and substantial employer withdrawals from multiple-employer plans under Section 4063, citing the importance of timely information for protecting pension plans and the insurance program.

Caps. For plan terminations, the proposal includes special penalty rules and caps. PBGC said penalties for late standard termination filings would generally be limited for smaller plans and, in some cases, capped based on the number of participants or the value of benefits distributed at termination.

The agency would also formalize a reconsideration process allowing filers to challenge penalty assessments through PBGC's existing administrative review procedures.

Waivers. Under the proposed waiver provisions, PBGC said penalties generally would be waived when late filings result from circumstances beyond the filer's control and could not have been prevented through ordinary business care and prudence. The agency also proposes relief for certain reasonable legal interpretations, recent changes in law and delays attributable to PBGC itself.

Mitigating factors. The proposal identifies self-correction and cooperation with PBGC to prevent future violations as mitigating factors that could support penalty reductions. Conversely, the agency said it may impose larger penalties, potentially up to statutory maximums, when violations create an elevated risk of harm, involve repeat offenders, or are determined to be willful.

PBGC said the rule is not intended to significantly increase penalties or create substantial economic burdens. Rather, the agency said the primary goal is to clarify existing practices and provide regulated entities with a more transparent framework for understanding how information-penalty decisions are made.

Comments on the proposed rule will be due 60 days after publication in the Federal Register.

News: FederalRegulations BenefitsNews PensionBenefitPlans AgencyNews RemediesDamages