Category Archives: ERISA

by BC2

Department of Labor – “Request for Information and Required Response”

URGENT COMPLIANCE BULLETIN

FOR IMMEDIATE RELEASE

Date:              May 20, 2021

From:             Benefits Compliance Consultants (info@bc2co.com)

To:                  All Employee Benefits Agents and Plan Administrators

Re:                  Department of Labor – “Request for Information and Required Response” inquiries related to Form M1 filings for MEWA’s

 

It has come to our attention that the US Department of Labor is actively reviewing Multiple Employer Welfare Arrangements (MEWAs) and is currently sending   “Request for Information with Written Response Required” notices to MEWA Administrators that have failed to file Form M1 report(s).

The DOL is requiring a 15-day written response to all notices and outlines all actions that MUST be completed within this time frame. These notices also make specific mention of the following civil action:

“If you were required to file the Form M1 and failed to do so, you may be liable to civil penalties of up to $1,644 per day pursuant to section 502(c)(5) of the Employee Income Security Act of 1974, as amended (ERISA).  The Department may take other action against you including, but not limited to, ordering you to cease and desist operations of the Plan, pursuant to ERISA section 521(a) and 29 CFR 2560.521-1.”

 

If you have received one of these notices and/or have not filed a timely Form M1 filing, please contact us at (515)244-2424 or info@bc2co.com immediately. 

Your trusted resource for comprehensive ERISA compliance,

Benefits Compliance Consultants

www.bc2co.com

by BC2

Avoiding IRS Penalties with Monthly ACA Compliance

As the IRS is expected to follow through on the ACA mandate fervently, it is critical that employers comply with the ACA process to avoid any penalties from the Internal Revenue Service. As per the mandate, companies with 50 or more full-time employees (or those who work equivalent to full-time employees) are required to provide minimum essential coverage to at least 95 percent of their workforce, along with their dependents. The coverage must also meet the minimum value and should be affordable for employees.

aca compliance consulting

Some organizations may feel like they can get away without following the proper guidelines but in the long run, there is far more value in adhering to the process than getting hit by multiple penalties. These penalties may result in a substantial amount of loss if you are no€™t careful. Moreover, there are plenty of benefits for following the ACA compliance as well. Some of the benefits of monthly ACA compliance are given below.

1) Consistent Records of Coverage

The implementation of monthly ACA compliance allows you to have a record of the various offers of coverage available to your workforce. On a month-by-month basis, you can get more data when it comes to the number of employees who enrolled for or declined the coverage as well. The more employees you have, the more important it is to follow the monthly ACA compliance process.

2) Better Preparation

One of the best aspects of following monthly ACA compliance is that you get to know which employees will become eligible ahead of time so that the necessary documentation can be prepared in advance. This ensures that no employee ever misses any offers of coverage and helps the company to be more efficient when it comes to extending coverage to its employees.

3) Preventing Penalties

By following the proper monthly ACA compliance process, you will always be in a better position to check the information contained in IRS penalty letters and set the record straight whenever necessary. By not following the process properly, you might end up with penalties for no reason just because you don’t have the proper information recorded.

What is the Latest ACA Reporting Schedule?

1) 1094-C/1095-C has to be filed (paper) with the IRS by February 28, 2020.

2) 1095-C has to be furnished to your workforce by March 2, 2020.

3) 1094-C/1095-C has to be electronically filed with the IRS by March 31, 2020.

Failure to meet the above deadlines can lead to penalties under IRC 6721/6722.

Penalties for Not Following the ACA Mandate

If employers file the required ACA information after the deadline but within 30 days of the last day, they might have to pay up to $50 per return not filed. Once the 30-day period is over till August 1st, the penalty goes up to $110. After August 1st, the penalty will jump up to $270 per return not filled which can result in a ton of loss for the company overall.

So always pay on time to avoid huge IRS penalties.

 

Questions? Need Help with ACA compliance? Form 5500 or wrap plan documents?

 

Call:

(515)-244-2424

by BC2

ACA Compliance Remains a Concern for Employers

Ever since the ACA came into being, a lot of organizations have always struggled to understand all the requirements and guidelines that came with it. It has always remained an issue for employers. Some companies, on the other hand, have chosen not to take it as seriously as they need to. Sometimes, employers send their reports and never heard anything back until much later, when they got swamped with waves of letters from the IRS.

What are the Different Types of Penalties Incurred by Employers?

There are mainly two types of penalties received by companies from the IRS. One pertains to the lack of coverage provided to employees by the employer and the other is related to the affordability of the plan offered. If an employer has refused to provide coverage to their workforce, then they can get hit with up to $2000 of penalty fees per employee. If the plan offered isn’t€™t affordable, the penalty fee may even go as high as $3000 per employee, which is a substantial amount of money for sure.

How to Stay ACA Compliant?

Looking into the ACA healthcare benefits is a complex process that can be quite overwhelming for employers or HR professionals. However, it can be broken down into smaller steps and implemented in a far simpler manner by taking a few things into consideration. Once your company has been identified as an applicable large employer, you need to start identifying employees that are eligible for health benefits. This can be done using different processes, each with their pros and cons. They are as follows:

1) Monthly Measurement

With this method, ACA eligibility is accessed on a monthly basis and is dependent on the number of hours the employee has worked the previous month. If he or she worked at least 130 hours during the month, then they can be considered as a full-time employee. This method is the easiest to implement and doesn’t€™t require complicated calculations.

2) Look Back Measurement

With this method, eligibility is determined based on a span of 3 to 12 months defined as the measurement period as opposed to on a month-by-month basis. This method saves time as employers need to do it only once or a few times a year. However, the risk of getting a bigger fine is higher in the event of mistakes or miscalculations being made. Implementation is also quite complicated, especially when new hires join the workforce causing overlaps of measurement periods.

3) Extending Coverage to All

This is probably the safest method to avoid raking in huge penalties. There is no need to access eligibility or face difficulty in implementing measurement periods. This method also attracts top talent due to the extended coverage, making the business more competent and efficient in the long run.

At the end of the day, every business owner needs to pick the method that best works for themselves and their businesses to ensure that they can stay ACA compliant and remove any possibility of getting huge fines from the IRS.

by BC2

Retirement Plan Compliance Guidelines You Must Know

The Employee Benefits Security Administration or EBSA is responsible for assuring that all 401k plans are in compliance with the Employee Retirement Income Security Act (ERISA). In recent years, the number of compliance audits conducted by both the IRS and the DOL has increased exponentially. It is the duty of the plan administrator to maintain, understand and ensure compliance to minimize the risk of their plan being audited. Given below is a retirement plan compliance guide that may help you to prevent any compliance issues from arising.

retirement plan compliance time

1) Reviewing Key Documents

There are three main documents that must be maintained, reviewed and retained every year at all costs. One of them is the most recent plan document that includes updated agreements. The other is the plan amendments document that includes any changes as per ERISA. The third one is the latest service agreements with TPAs. It is important for the administrator to not only review these files but also have signed copies of them.

2) Understanding the Plan Document

Every retirement plan will have a set amount of provisions that define the eligibility of participants and the benefits they can gain from it. The administrator must always go through the plan document to understand every aspect of eligibility from age requirements, service requirements to employee classification to ensure that all eligible employees get included in the plan. The document will also contain key information pertaining to the sources of compensation such as bonuses, severance pay, and taxable benefits, etc.

3) Understanding TPA Duties

Misunderstanding TPA’s duties is another reason why a retirement plan compliance issue may arise. To prevent errors from occurring, it is vital to keep a signed copy of the latest service agreements and read them fully to understand its full scope. Calculations related to employer contributions are mostly done by the TPA but some service agreements might indicate that it is the responsibility of the plan administrator to do so. Therefore, it is important to ensure that there is no confusion regarding the duties or it might lead to negligence and compliance issues in the end.

4) Adherence to Regulations

Retirement plans have a ton of rules and regulations to follow and sometimes a few of them might slip through the crack and never get enforced. For instance, most plans have a provision where employees who leave and then get rehired within a set amount of time can gain eligibility for participating in a 401k plan but it is often overlooked by a lot of companies. When it comes to an audit, even the tiniest detail will be under heavy scrutiny.

5) Ensuring Consistency of Day to Day Operations

It’s not sufficient to just have a plan document that meets all the required compliance needs. Day to day operations of the plan must be consistently upheld to all the rules and regulations as per the law. Sometimes, regulations may change before the sponsor is required to make changes to the plan. In such cases, operations might vary from the written terms of the plan. By maintaining consistency in the day to day operations of the plan, both the administrator and the sponsor can better prepare for any hurdle that may come their way.

By ensuring that there aren’t any issues when it comes to retirement plan compliance, everyone benefits, including the business owner and his/her employees. A happy workforce will always be a productive one too. We provide a number of different services such as Form 5500, ERISA compliance, benefits compliance, 401k and our specialty wrap form planning aimed at helping companies keep all their plans in accordance with the rules and regulations set by the IRS and DOL.

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Phone:  (515) 244-2424

by BC2

Retirement Wrap Plan Consultants Are Ready For Hire

The Importance of Hiring Retirement Wrap Plan Consultants

A wrap plan is a document that organizations use to ensure that they are compliant with the Employee Retirement Income Security Act of 1974 (ERISA). It also helps them to reduce costs pertaining to the administration of health and welfare benefit plans provided to their employees. Employee welfare benefits covered by ERISA include a host of programs such as insurance, medical, dental and accidental death coverage. Non-compliance will result in penalties that may amount to $110 per day or more. It would be wise to hire retirement wrap plan consultants to ensure that such a predicament would never happen in the first place.

They can help you do the following:

Regulation Monitoring

Rules may evolve and change over time. Having a consultant would make it easier to ensure that the company is following the latest rules and guidelines properly.

Share Analytics

Retirement wrap plan consultants can monitor the percentage of people who are on track for a successful retirement future and share it with the employer to gauge the level of success of their retirement plans.

Summary Reports

Companies can obtain a summary of their plans along with certain key metrics such as total plan assets, participation rate, contribution types and savings rate. This will help the company find problematic areas if any.

Participant Engagement

This gives the employer a unique insight into the number of employees who are deferring at various rates so that they can review it and see if they are doing enough to maximize employer contributions. This also includes information about how many loans the participants have taken out and if there are any outstanding balances. This way, the company can review the status of each loan and see if the employees are following the required rules and guidelines.

Investment Plans

In a single file, the company will be able to see the summary of the different plans and important data points such as expense ratio, beginning balance, net flow and ending balance.

Plan Activity

This gives a glimpse into transactions that occur during reporting periods such as asset flows, disbursement and rollovers. To get more clarity on the matter, the transactions can even be divided into specific types like contribution, distribution and loan payment.

Compliance Summary

The most important aspect of the retirement wrap plan consultant’s job is to provide a summary of important compliance issues and areas where there might be a problem. If any area gets flagged, the company needs to solve it as soon as possible to ensure that they meet all compliance requirements. Some of the known categories include top heavy testing, 401k non-discrimination tests and participant deposit timing. Some even provide short notes for reference so that the employer can move quickly and take action before it’s too late.

Many companies are afraid of raking up penalties for not following the correct guidelines but hiring a retirement wrap plan consultant would help alleviate that fear. There are several retirement wrap plan consultancies out there today. Creating a wrap plan document is no easy feat and requires a lot of attention to detail and compliance. Once it is done, it can vastly simplify the process by having the required information in one place and eliminate the need for multiple Form 5500 submission.

by BC2

Who is Exempt from Filing Form 5500?

Is your business exempt from filing Form 5500?

The Form 5500 is an annual report that is filed with the department of labor containing information about the financial conditions, investments and operations of a 401k plan. It is a vital part of any business that provides a retirement plan to its employees. Generally, a company has to deposit their employee’s salary deferrals no later than the 15th business day of the month after the contribution date. Small businesses that have 100 or fewer employees get an extension of 7 days after the collection of salary deferrals.

Plans not covered by ERISA or Employee Retirement Income Security Act are exempt from filing form 5500. If you are wondering who is exempt from filing Form 5500, then read on.

1) Business Owner Only Plan – A retirement plan that covers only the business owner and the spouse (if applicable) is usually exempt from filing form 5500. This is only possible if the total plan’s assets are worth $250,000 or more, as of the first day of the plan year. This is because it assumes that the business doesn’t have employees that are eligible for the plan. If employees are improperly excluded, then the exemption is void and the Form 5500 must be filled.

2) Non-Erisa 403(b) Plans – 403(b) plans are generally exempt from filing Form 5500 and so Churches and government institutions usually get an exemption as they both frequently sponsorexempt from filing Form 5500 it. Apart from them, if an employer has limited involvement in its operation and maintenance, then that plan will also get an exemption. However, it is important to note that it is very hard to define what “limited involvement” means and so in such cases, one should consult the exemption status with an entity that has in-depth knowledge about it. Not all 403 (b) plans get an exemption.

3) Unfunded Welfare Plans – If a welfare plan has less than 100 participants at the start of the plan year and is insured or entirely unfunded, then there is no need to file Form 5500. So what makes a plan to be considered unfunded? Well, if the employer is paying the full cost of the plan from their general account, the plan is considered to be unfunded. If there is a trust involved or if the cost comes from a specific account (where the participant contributions are separated from general assets), they won’t get an exemption.

4) Plans with Only Certain Specified Benefits – If the plan provides only certain specified benefits then there is no need to file Form 5500 even if the number of participants is high. Daycare centers, certain apprenticeships and union plans, etc. generally get an exemption.

If you are unsure as to whether you or your company is exempt from filing Form 5500 you need to consult with a knowledgeable authority. Otherwise, you may end up with a penalty of $25 per day up to a maximum of $15,000 from the IRS and up to $1,100 per day from the department of labor. Most companies realize their mistake only after they receive a letter from the IRS or DOL (department of labor). As this letter is usually sent a year after its due, a substantial amount of penalty fees may be levied upon the company. It’s always wiser to be cautious to minimize potential risks especially when it comes to the IRS. We provide a number of different services ranging from Form 5500 preparation to providing retirement wrap plans to help companies navigate easier when it comes to financial hurdles.

by BC2

Responsibilities and Duties of a 401k Plan Administrator

401k plans are helpful to secure employees’ financial future but they are not without any hassles or red tapes.

Hiring someone for 401k plan administrator duties can save your business money.

There are a ton of regulations put up by the IRS that the plan has to be in compliance with. Not adhering to these regulations can lead to losing a substantial amount of money through penalties. It is the responsibility of the administrators and sponsors to ensure that the plan follows all regulations without any deviation. Some of these duties can be outsourced to a third-party service provider but there are a few that need to be directly overseen by administrators themselves.

Listed below are a few 401k plan administrator responsibilities.

1) Annual Compliance Testing

retiremenet wrap compliance

One of the most vital responsibilities of a 401k plan administrator is the annual compliance testing. According to the requirement of the IRS, every plan has to undergo non-discrimination tests every year to ensure that employees are treated fairly. These tests help to make sure that highly compensated employees don’t benefit more than other employees when it comes to tax deferrals. If the plan fails in any non-discrimination tests, then the administrator has to take steps to rectify it. This may include refunding highly compensated employee’s contributions along with the tax benefits to decrease the average contribution levels or raising the contribution rates of lower-earning employees. It is well within the right of the administrator to choose any of the above or a mixture of the two as per the situation.

2) Overseeing Loans

If a 401k plan permits employees to take out a loan against their plan, then it is the duty of the administrator to ensure that it meets all of the guidelines required by the IRS. These include making sure that the account has sufficient balance to process the loan and that the future payments will be repaid on time. If a loan defaults, then the administrator has to take action to resolve the issue as well. If the withdrawal qualifies as a hardship, then he/she must prepare and retain the necessary documents for verification purposes.

3) Communication

It’s not necessary for all employees to understand how the 401k plan works and the various regulations it must follow. If an employee has any doubts about the matter, then the administrator has to educate him/her regarding the various aspects of the plan. An administrator can also help the employees understand how future changes could affect the 401k plan so that they can prepare for any consequences that may follow. It is also the responsibility of the administrator to provide an all-inclusive summary report on the plan as well as an annual benefit statement to all the participants.

There are many other fiduciary responsibilities that come with the administrator’s post such as ensuring that all contributions are deposited and recorded, keeping all plan reports up to date, maintaining the plan investment certificates, etc. While it’s always better for a business to handle these tasks internally, some companies hire third-party firms to handle the administrative tasks of a 401k plan. With today’s technological advancements, getting assistance off-site isn’t as risky as it was in the past. Choosing the right firm that has a proven track record of successfully managing 401k plans can provide a lot of benefits to companies when it comes to time and effort saved.

We help companies with retirement wrap plan documents that combine all group insurance policies and contracts that provide welfare benefits into a single plan. These plans help in not only ensuring legal compliance but also provide more clarity to everyone concerned.

 

by BC2

401k Benefits For Employees

401k Benefits For Employees – Building a Secure and Safe Financial Future

Saving money for future is one of the most vital things to do when you are employed. It’s not a simple task but it is a necessary one that will bear fruits when you reach your retirement age. A 401k plan is a tax qualified contribution based pension account into which a certain amount of money is put in from the employee and the employer. This amount will not be taxable as long as you don’t withdraw it prematurely. It is meant to be a retirement savings plan and therefore should not be touched ideally until you reach your retirement age.

What are some of the 401k Benefits for Employees?

1) Automatic Savings

In a 401k plan, the money will be deducted from your salary pre-tax and transferred into the 401k account every month. The most difficult part of saving money is in actually resisting the urge to spend all your money and this solves that problem very efficiently.

2) Tax Savings

Your contribution is taken before tax is levied and so your taxable income will be significantly less than what you would have to pay if you don’t have a 401k plan.

3) Better and Faster Savings

As your contributions grow without incurring any taxes, your savings can actually grow faster than a traditional investment plan in a brokerage firm or a bank.

4) Supplementing Social Security

Deciding when to draw social security is a difficult task in itself. When it is taken, you will often find that it falls quite short of the income you are used to when employed. A 401k plan can help you fill the gap better by giving you a good amount of money when you reach your retirement age.

5) Potential Loans

One of the most useful 401k benefits for employees is the ability to take loans based on special conditions for various reasons ranging from buying a house, medical expenses, education and so on. The amount of interest levied on these loans is usually lesser than traditional loans offered by banks.

Pre Mature Withdrawal of your 401k Savings

You can choose to withdraw your savings prematurely as a last resort if needed but you will have to incur penalties for doing so. If you are under the age of 59 , you might incur a 10 percent penalty along with paying taxes on the amount withdrawn which may end up being a substantial amount. The procedure for withdrawing the amount will depend on the employer as well as the type of withdrawal you go for. It is important to note that not all employers allow you to withdraw in advance. You will have to check with the H.R. department first to find out if such an option is available. A better way would be to take a loan out instead against your 401k savings as you will be able to get the amount you seek and pay it back at the same time.

If you have a 401k complaint or question, you can always contact the department of labor and file a claim on the EBSA website. Everything you need to know about the various procedures for doing so can be found there. Another place where you can find a lot of information pertaining to your retirement income is to learn more about the Employee Retirement Income Security Act (ERISA).

by BC2

An Essential Guide to Understanding ERISA Wrap Documents

Essential Guide to Understanding ERISA Wrap Documents

Many employers understand the significance of complying with ERISA (Employee Retirement Security Act) plan documents. These documents hold disclosure requirements for various retirement plans, including 401(k). But it’s startling to see some employer’s poor attention towards health and welfare benefit plans in their companies.

erisa wrap document servicesUsually, employers mostly running smaller organizations assume that benefit summaries offered by some insurance providers meet all ERISA regulations. However, the truth is that all employers in the U.S are obligated under ERISA laws to fashion employees with all the information missing in insurer’s booklets.

What are ERISA Wrap Documents?

As an employer, you might be wondering what an ERISA Wrap document is. Well, regardless of the size of your company, ERISA laws require all employees to provide Wrap or SPDs (Summary Plan descriptions) to employees participating in their plans. These documents contain all plan descriptions as well as employee benefits. For instance, they include Tax IDs, Address and the names of the beneficiaries, etc. They are the simplest way of employers to comply with ERISA regulations.

Wrap documents “wraps” around insurance policies or cover with the plan benefits regulated by the insurance company. Additionally, wrap documents are designed to supplement relevant information for ERISA compliance. Furthermore, employers may use Wrap documents to merge employee’s welfare plans into one mega-wrap plan. This way, extra costs are minimized during the filing of annual reports.

Why are Wrap Documents Important?

  1. Plan Consolidation – As earlier mentioned, wrap documents helps in merging employee’s health and welfare benefits into one “umbrella” plan. They consolidate all plan benefits and provides an overarching summary of admins, plan type, benefits, and fiduciaries, among other vital details in an easy to understand manner.
  2. Simpler ERISA Compliance – They reduce the employer’s workload and allows for easier compliance with ERISA, IRS, and DOL regulations. In case you have been submitting Form 5500 per each benefit plan annually, then a Wrap document can remove the repetition processes.
  3. Compliance with Federal Laws – As an employer, you have the sole responsibility to provide clear information on procedures, employee benefits, and plan details. Additionally, you’ll be forced to protect employee’s plan assets no matter who provides your benefits to comply with federal regulations.

How to Adopt a Wrap Plan

When planning to adopt a Wrap plan, the process is quite simple. First, you need to determine which benefit plans your organization sponsors that are subject to ERISA. You can as well identify affiliate employer plans that require filling the annual Form 5500.

Then, you’ll need to analyze insurance arrangements, coverage terms, and plan’s administration processes. In this step, consider things such as eligibility, plan year, commencement date, and claim procedures.

The next step is to prepare the Summary Plan Descriptions and the plan document. Finally, you can adopt a Wrap plan after all the documents in the step above have been reviewed thoroughly. Do not forget to distribute the SPDs to all eligible employees.

Use this comprehensive guide to understand more information on ERISA compliance and Wrap documents. Are you still stuck on adopting an effective Wrap Plan?

Get ERISA wrap document services for your business.

Call: (515)-244-2424

Email: info@bc2co.com

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by BC2

How ERISA Compliance Works

Here is how ERISA Compliance works.

ERISA is a law that governs the operations of different retirement plans in the United States. The law also safeguards welfare benefit plans such as insurance plans for group life, dental, among others. By reading this article, you will get answers to a question such as “what is a wrap plan?”

The Department of Labor is mandated by the federal government to enforce ERISA. One of the primary objectives of the legal provision is to protect workers of different organizations from unfair actions and practices by various retirement plans and welfare programs.

Every employer is required to sensitize their employees about the options they have and how they can benefit from them. Every private institution in the country that offers retirement plans and health insurance benefits must adhere to ERISA. However, churches and all government bodies are exempted. Additionally, if you are self-employed or in a partnership and you do not have employees, you are not subject to ERISA guidelines.

The Main Sections of ERISA.

Every section of the legal provision has its relevant regulations, as explained below:

  • Disclosure.

Administrators of retirement plans are expected to provide any crucial information about a plan to their employees. The information should include details about types of coverage offered, levels available, and relevant reports. In some cases, the Department of Labor may ask the administrators to send the relevant documentation concerning employee programs. For example, an employer may be asked to send a document called a wrap plan which shows all their health and welfare plans.

  • Payment of Claims.

There must be a claims process for every welfare program offered by an organization and employers should inform their workers about it. An employer is required by the legal provision to provide a thorough explanation if any claim by an employee is denied.

  • Reporting.

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Other than providing the information requested by the Department of Labor, organizations must file documentation with information about welfare programs available for their workers and coverage types for each of them. The information is provided if an employer decides to increase or decrease the levels of coverage for their employees.

Classification of Benefit Plans.

Benefit plans organized by employers are divided into two main categories; welfare plans and retirement plans. Most employee welfare programs are required to adhere to guidelines of ERISA irrespective of their size.

Generally, the federal law applies to all group health plans that are funded by employers, including ones that are self and fully-insured. Benefits such as overtime payments and medical leave are also subject to the federal law.

ERISA provides guidelines that ensure that every employee gets the money that has accumulated in their accounts over their working life. It is not mandatory for employers are to have retirement plans for their workers. However, if they decide to have a plan, they must adhere to the minimum standards of the law.

Employers should ensure that their workers can easily access written information about their funds through regular mailing and hard copies. ERISA also requires organizations to explain to their workers how they can file claims for their retirement benefits with ease.

Employers should also diversify their investment portfolios to minimize the risk of loss and ensure that they will have the ability to pay out retirement benefits when due. An organization that complies with retirement plan guidelines set by the law should provide information about investments made and their returns to employees.

Now that you know how ERISA Compliance works let’s look at the…

Common Violations of ERISA.

A violation of the federal law refers to the failure by a party to meet their obligations. Some of the common violations include failure by some employers to offer benefits due to their employees and failure to observe the rights of workers covered by a benefit plan.

Action Taken against ERISA violators.

The federal law has two types of actions taken against violators; when a beneficiary of a plan files a complaint against a violator and when the Department of Labor takes action. Before a beneficiary files a lawsuit against a violator, they are required by the law to exhaust other administrative procedures.

There are civil and criminal punishments for violators of ERISA. Civil punishments include making payments, fines, or changing the provisions of a plan. The complainant receives any benefits that had been denied, interest accrued over time, and legal fees that they have incurred during a lawsuit.

On the other hand, criminal punishments include paying fines and violators may also face imprisonment. If an employer provides false documents about plan benefits, they may be required to pay a fine of up to $10,000.