[Code of Federal Regulations]
[Title 29, Volume 9]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR2560.502c-6]

[Page 531-533]
 
                             TITLE 29--LABOR
 
 CHAPTER XXV--EMPLOYEE BENEFITS SECURITY ADMINISTRATION, DEPARTMENT OF 
                                  LABOR
 
PART 2560_RULES AND REGULATIONS FOR ADMINISTRATION AND ENFORCEMENT
--Table of Contents
 
Sec. 2560.502c-6  Civil penalties under section 502(c)(6).

    (a) In general. (1) Pursuant to the authority granted the Secretary 
under section 502(c)(6) of the Employee Retirement Income Security Act 
of 1974, as amended (the Act), the administrator (within the meaning of 
section 3(16)(A) of the Act) of an employee benefit plan (within the 
meaning of section 3(3) of the Act and Sec. 2510.3-1 of this chapter) 
shall be liable for civil penalties assessed by the Secretary under 
section 502(c)(6) of the Act in each case in which there is a failure or 
refusal to

[[Page 532]]

furnish to the Secretary documents requested under section 104(a)(6) of 
the Act and Sec. 2520.104a-8 of this chapter.
    (2) For purposes of this section, a failure or refusal to furnish 
documents shall mean a failure or refusal to furnish, in whole or in 
part, the documents requested under section 104(a)(6) of the Act and 
Sec. 2520.104a-8 of this chapter at the time and in the manner 
prescribed in the request.
    (b) Amount assessed. (1) The amount assessed under section 502(c)(6) 
of the Act shall be determined by the Department of Labor, taking into 
consideration the degree and/or willfulness of the failure or refusal to 
furnish any document or documents requested by the Department under 
section 104(a)(6) of the Act. However, the amount assessed under section 
502(c)(6) of the Act shall not exceed $100 a day or $1,000 per request 
(or such other maximum amounts as may be established by regulation 
pursuant to the Federal Civil Penalties Inflation Adjustment Act of 
1990, as amended), computed from the date of the administrator's failure 
or refusal to furnish any document or documents requested by the 
Department.
    (2) For purposes of calculating the amount to be assessed under this 
section, the date of a failure or refusal to furnish documents shall not 
be earlier than the thirtieth day after service of the request under 
section 104(a)(6) of ERISA and Sec. 2520.104a-8 of this chapter.
    (c) Notice of intent to assess a penalty. Prior to the assessment of 
any penalty under section 502(c)(6) of the Act, the Department shall 
provide to the administrator of the plan a written notice that indicates 
the Department's intent to assess a penalty under section 502(c)(6) of 
the Act, the amount of the penalty, the period to which the penalty 
applies, and the reason(s) for the penalty.
    (d) Reconsideration or waiver of penalty to be assessed. The 
Department may determine that all or part of the penalty amount in the 
notice of intent to assess a penalty shall not be assessed on a showing 
that the administrator complied with the requirements of section 
104(a)(6) of the Act or on a showing by the administrator of mitigating 
circumstances regarding the degree or willfulness of the noncompliance.
    (e) Showing of reasonable cause. Upon issuance by the Department of 
a notice of intent to assess a penalty, the administrator shall have 
thirty (30) days from the date of service of the notice, as described in 
paragraph (i) of this section, to file a statement of reasonable cause 
explaining why the penalty, as calculated, should be reduced or not be 
assessed, for the reasons set forth in paragraph (d) of this section. 
Such statement must be made in writing and set forth all the facts 
alleged as reasonable cause for the reduction or nonassessment of the 
penalty. The statement must contain a declaration by the administrator 
that the statement is made under the penalties of perjury.
    (f) Failure to file a statement of reasonable cause. Failure to file 
a statement of reasonable cause within the 30 day period described in 
paragraph (e) of this section shall be deemed to constitute a waiver of 
the right to appear and contest the facts alleged in the notice of 
intent, and such failure shall be deemed an admission of the facts 
alleged in the notice for purposes of any proceeding involving the 
assessment of a civil penalty under section 502(c)(6) of the Act. Such 
notice shall then become a final order of the Secretary, within the 
meaning of Sec. 2570.111(g) of this chapter, forty-five (45) days from 
the date of service of the notice.
    (g) Notice of determination on statement of reasonable cause. (1) 
The Department, following a review of all of the facts alleged in 
support of no assessment or a complete or partial waiver of the penalty, 
shall notify the administrator, in writing, of its determination not to 
assess or to waive the penalty, in whole or in part, and/or assess a 
penalty. If it is the determination of the Department to assess a 
penalty, the notice shall indicate the amount of the penalty, not to 
exceed the amount described in paragraph (c) of this section. This 
notice is a ``pleading'' for purposes of Sec. 2570.111(m) of this 
chapter.
    (2) Except as provided in paragraph (h) of this section, a notice 
issued pursuant to paragraph (g)(1) of this section, indicating the 
Department's intention to assess a penalty, shall become a final order, 
within the meaning of Sec. 2570.111(g) of this chapter, forty-five

[[Page 533]]

(45) days from the date of service of the notice.
    (h) Administrative hearing. A notice issued pursuant to paragraph 
(g) of this section will not become a final order, within the meaning of 
Sec. 2570.91(g) of this chapter, if, within thirty (30) days from the 
date of the service of the notice, the administrator or a representative 
thereof files a request for a hearing under Sec. Sec. 2570.110 through 
2570.121 of this chapter, and files an answer to the notice. The request 
for hearing and answer must be filed in accordance with Sec. 2570.112 
of this chapter and Sec. 18.4 of this title. The answer opposing the 
proposed sanction shall be in writing, and supported by reference to 
specific circumstances or facts surrounding the notice of determination 
issued pursuant to paragraph (g) of this section.
    (i) Service of notices and filing of statements. (1) Service of a 
notice for purposes of paragraphs (c) and (g) of this section shall be 
made:
    (i) By delivering a copy to the administrator or representative 
thereof;
    (ii) By leaving a copy at the principal office, place of business, 
or residence of the administrator or representative thereof; or
    (iii) By mailing a copy to the last known address of the 
administrator or representative thereof.
    (2) If service is accomplished by certified mail, service is 
complete upon mailing. If service is by regular mail, service is 
complete upon receipt by the addressee. When service of a notice under 
paragraph (c) or (g) of this section is by certified mail, five (5) days 
shall be added to the time allowed by these rules for the filing of a 
statement, or a request for hearing and answer, as applicable.
    (3) For purposes of this section, a statement of reasonable cause 
shall be considered filed:
    (i) Upon mailing, if accomplished using United States Postal Service 
certified mail or Express Mail;
    (ii) Upon receipt by the delivery service, if accomplished using a 
``designated private delivery service'' within the meaning of 26 U.S.C. 
7502(f);
    (iii) Upon transmittal, if transmitted in a manner specified in the 
notice of intent to assess a penalty as a method of transmittal to be 
accorded such special treatment; or
    (iv) In the case of any other method of filing, upon receipt by the 
Department at the address provided in the notice of intent to assess a 
penalty.
    (j) Liability. (1) If more than one person is responsible as 
administrator for the failure to furnish the document or documents 
requested under section 104(a)(6) of the Act and its implementing 
regulations (Sec. 2520.104a-8 of this chapter), all such persons shall 
be jointly and severally liable with respect to such failure.
    (2) Any person, or persons under paragraph (j)(1) of this section, 
against whom a civil penalty has been assessed under section 502(c)(6) 
of the Act pursuant to a final order, within the meaning of Sec. 
2570.111(g) of this chapter, shall be personally liable for the payment 
of such penalty.
    (k) Cross-reference. See Sec. Sec. 2570.110 through 2570.121 of 
this chapter for procedural rules relating to administrative hearings 
under section 502(c)(6) of the Act.

[67 FR 785, Jan. 7, 2002, as amended at 68 FR 3735, Jan. 24, 2003]