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Employee Benefits Security Administration

EBSA Proposed Rule

Amendments to Civil Penalties Under ERISA Section 502(c)(7) [08/10/2007]

[PDF Version]

Volume 72, Number 154, Page 44991



Employee Benefits Security Administration

29 CFR Part 2560

RIN 1210-AB23

Amendments to Civil Penalties Under ERISA Section 502(c)(7)

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Proposed rule.


SUMMARY: This proposed rule is a companion to the Department of Labor/
Employee Benefits Security Administration's (Department) direct final 
rule (published today in the ``Rules and Regulations'' section of the 
Federal Register) amending the Department's civil penalty regulation 
under section 502(c)(7) of the Employee Retirement Income Security Act 
of 1974 (ERISA or the Act) to reflect recent amendments to section 
502(c)(7) by the Pension Protection Act of 2006. These amendments 
authorize the Secretary of Labor to assess civil penalties not to 
exceed $100 per day for each violation of section 101(m) of ERISA. 
Section 101(m) of ERISA requires plan administrators of individual 
account plans to notify participants and beneficiaries of their right 
to sell the company stock in their accounts and reinvest the proceeds 
into other investments available under the plan.
    The Department is publishing these amendments as a direct final 
rule without prior proposal because the Department views them as highly 
technical and anticipates no significant adverse comment. The 
Department has explained its reasons in the preamble to the direct 
final rule. If the Department receives no significant adverse comment 
during the comment period, no further action on this proposed rule will 
be taken. However, if the Department receives significant adverse 
comment, the Department will withdraw the direct final rule and it will 
not take effect. In that case, the Department will address all public 
comments in a subsequent final rule based on this proposed rule. The 
Department will not institute a second comment period on this rule. Any 
parties interested in commenting must do so during this comment period.

DATES: Comments must be received on or before September 10, 2007.

ADDRESSES: To facilitate the receipt and processing of comments, the 
Department encourages interested persons to submit their comments 
electronically by e-mail to, or by using the Federal 
eRulemaking portal at (follow instructions for 

submission of comments). Persons submitting comments electronically are 
encouraged not to submit paper copies. Persons interested in submitting 
comments on paper should send or deliver their comments (at least three 
copies) to the Office of Regulations and Interpretations, Employee 
Benefits Security Administration, Room N-5669, U.S. Department of 
Labor, 200 Constitution Avenue, NW., Washington, DC 20210, Attn: 
502(c)(7) Civil Penalty. Comments received will be posted without 
change, including any personal information provided, to and, and also available for 

public inspection at the Public Disclosure Room, Employee Benefits 
Security Administration, Room N-1513, U.S. Department of Labor, 200 
Constitution Avenue, NW., Washington, DC.

Regulations and Interpretations, Employee Benefits Security 
Administration, (202) 693-8500. This is not a toll-free number.

SUPPLEMENTARY INFORMATION: As noted above, in the ``Rules and 
Regulations'' section of today's Federal Register, the direct final 
rule being published makes technical changes to the Department's 
existing civil penalty regulation at 29 CFR 2560.502c-7 for violations 
of section 101(i) of ERISA, relating to blackout notices, in order to 
conform the regulation to section 502(c)(7) of ERISA, as amended by the 
Pension Protection Act of 2006, Public Law 109-280, 120 Stat. 780, for 
violations of section 101(m) of ERISA, relating to diversification 
rights. The provisions proposed here are those contained in the direct 
final rule. Please refer to the preamble and regulatory text of the 
direct final rule for further information and the actual text of the 
revisions. Additionally, all information regarding Statutory and 
Executive Orders for this proposed rule can be found in the 
Supplementary Information section of the direct final rule.

    Signed at Washington, DC, this 3rd day of August, 2007.
Bradford P. Campbell,
Acting Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
[FR Doc. E7-15568 Filed 8-9-07; 8:45 am]