[Code of Federal Regulations]
[Title 29, Volume 9]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR2570.81]

[Page 560-561]
 
                             TITLE 29--LABOR
 
 CHAPTER XXV--EMPLOYEE BENEFITS SECURITY ADMINISTRATION, DEPARTMENT OF 
                                  LABOR
 
PART 2570_PROCEDURAL REGULATIONS UNDER THE EMPLOYEE RETIREMENT INCOME 
SECURITY ACT--Table of Contents
 
 Subpart D_Procedure for the Assessment of Civil Penalties Under ERISA 
                             Section 502(l)
 
Sec. 2570.81  In general.

    Section 502(l) of the Employee Retirement Income Security Act of 
1974

[[Page 561]]

(ERISA or the Act) requires the Secretary of Labor to assess a civil 
penalty against a fiduciary who breaches a fiduciary responsibility 
under, or commits any other violation of, part 4 of title I of ERISA or 
any other person who knowingly participates in such breach or violation. 
The penalty under section 502(l) is equal to 20 percent of the 
``applicable recovery amount'' paid pursuant to any settlement agreement 
with the Secretary or ordered by a court to be paid in a judicial 
proceeding instituted by the Secretary under section 502 (a)(2) or 
(a)(5). The Secretary may, in the Secretary's sole discretion, waive or 
reduce the penalty if the Secretary determines in writing that:
    (a) The fiduciary or other person acted reasonably and in good 
faith, or
    (b) It is reasonable to expect that the fiduciary or other person 
will not be able to restore all losses to the plan or any participant or 
beneficiary of such plan without severe financial hardship unless such 
waiver or reduction is granted.

The penalty imposed on a fiduciary or other person with respect to any 
transaction shall be reduced by the amount of any penalty or tax imposed 
on such fiduciary or other person with respect to such transaction under 
section 502(i) or section 4975 of the Internal Revenue Code of 1986 (the 
Code).