On July 20, 2026, the Pension Benefit Guaranty Corporation (PBGC) issued a proposed rule that updates its policies for calculating, imposing, and waiving financial penalties when a single-employer or multiemployer defined benefit (DB) plan does not provide certain required notices or other important information timely as mandated by law or regulation. The proposed rule specifies the penalty amounts PBGC generally applies for late or missing notices or information and describes the situations in which those penalties may be reduced or waived. PBGC describes the proposal largely as a codification and modernization of its penalty practices, intended to provide greater transparency and consistency in how penalties are assessed, reduced, and waived. Comments on the proposed rule are due on September 21, 2026.
PBGC first issued a policy on exercising its ERISA Section 4071 penalty authority in 1992 and revised it in 1995. That policy emphasizes voluntary compliance, self-correction, and penalties tailored to the facts, including the seriousness of the violation, potential harm to plan participants and to the PBGC’s insurance programs, willfulness, prior violations, and plan size. The proposed rule would replace that policy because PBGC believes it no longer provides enough guidance for many late-filing situations, does not address the penalties under ERISA Section 4302, and has not been updated to reflect changes in the law since 1995.
Which PBGC notices and filings could trigger penalties?
Single-employer plans. For single-employer DB plans, potential penalties generally apply to failures to provide notices or other material information timely as required under ERISA Section 4071 and PBGC’s implementing regulations. This includes a range of filings and notices such as those related to premium filings, reportable events, a substantial cessation of operations or a substantial employer withdrawal, plan termination (both standard and distress terminations), and annual financial and actuarial information under ERISA Section 4010 regulations.
- Increased enforcement risk for late filings going forward. PBGC notes that it had an internal nonenforcement policy for certain late reportable event filings and 4010 filings and did not collect penalties for those violations during 2019 through 2024 and while this proposal was being developed. Sponsors and service providers that have viewed those areas as carrying lower practical enforcement risk may want to reassess their compliance controls if the rule is finalized.
Multiemployer plans. For multiemployer DB plans, potential penalties generally apply to failures to provide notices timely as required under ERISA Section 4302 and PBGC’s regulations thereunder, which govern notices unique to multiemployer plans under Subtitle E of Title IV of ERISA. These obligations include notices relating to insolvency, plan termination (either by amendment or mass withdrawal), plan mergers or transfers, and the annual statement of compliance for plans that received special financial assistance under the American Rescue Plan Act of 2021. In addition, some multiemployer plans may be subject to penalties under ERISA Section 4071 for untimely compliance with more generally applicable PBGC filing requirements, such as premium filings.
PBGC indicates that, historically, it generally has not assessed Section 4302 penalties for untimely multiemployer notices unless the filer remained noncompliant after PBGC notified the filer of the delinquency. The proposed rule would formalize PBGC’s approach to these penalties.
How PBGC would calculate penalties under the proposed rule
The proposed rule clarifies that, for most filing failures, PBGC generally would assess penalties under guideline amounts that are well below the statutory maximum. The proposal includes specific penalty schedules for many types of late filings and notices, with higher daily penalties applying where PBGC views the failure as more time sensitive or as posing greater potential harm to participants or to PBGC’s insurance programs.
For some failures, the proposed rule provides reduced penalty amounts for small plans. In addition, where multiple missed notices contain the same information, PBGC generally would treat them as a single instance of noncompliance rather than assessing separate penalties for each recipient.
Although the proposed schedules are intended to provide transparency and consistency, PBGC indicates that they are guidelines rather than mandatory amounts in every case. PBGC also reserves the right to assess higher penalties, potentially up to the statutory maximum, where the circumstances warrant, including in cases involving repeated violations, willful misconduct, or a heightened risk of harm. Or, if PBGC already knows the facts showing that a penalty would be waived upon request, it may choose not to assess the penalty.
For penalties assessed after January 8, 2025, the maximum penalty under ERISA Section 4071 is $2,739 per day, and the maximum penalty under ERISA Section 4302 is $365 per day. These amounts are subject to annual inflation adjustment.1,2
Figures 1 and 2 summarize the penalties that apply to multiemployer and single-employer plans, respectively.
Filers can request reconsideration of assessed penalties
A filer who disagrees with PBGC’s initial assessment of penalties may seek reconsideration under PBGC’s administrative review rules in 29 C.F.R. Part 4003. The request must be submitted in writing within 30 days of the initial determination, state why the decision was incorrect, and specify what outcome is requested. The request will be reviewed by the PBGC department that issued the penalty, with a higher-level official issuing the final decision.
When PBGC may reduce or waive penalties
PBGC would have discretion to waive all or part of a penalty assessed under ERISA Sections 4071 and 4302 based on the specific facts and circumstances of the particular case. The proposed rule identifies several situations in which relief may be appropriate and indicates that PBGC would seek to treat similar cases consistently. Filers would be allowed to submit information relevant to a waiver both before and after a penalty is assessed.
Reasonable cause. PBGC generally would waive penalties where the filer shows that the late filing resulted from circumstances beyond the filer’s control and could not have been avoided through the care and judgment ordinarily expected in conducting business. In evaluating reasonable cause, PBGC would consider factors such as the size of the plan or employer and the seriousness of the violation. However, a lack of awareness of a deadline or legal requirement would not count as reasonable cause. PBGC would also treat the actions of outside advisors, such as attorneys, actuaries, or third-party administrators, as the actions of the filer, so reliance on an outside service provider generally would not, by itself, establish reasonable cause. The advisor’s conduct would be relevant in deciding whether reasonable cause exists.
Error of law. PBGC would generally waive penalties when a late filing or notice resulted from an erroneous but reasonable legal interpretation or from a change in the law.
Delay by PBGC. PBGC would generally waive the portion of a penalty that accrued because of a delay in responding to a filer’s reasonable objection to a notice requirement or deadline.
Other mitigating or aggravating factors. PBGC would weigh other mitigating and aggravating factors in deciding whether to reduce, waive, or increase a penalty. Mitigating factors include self-correction, where the filer promptly fixes the problem and informs PBGC before the agency identifies it, and preventive measures, such as cooperating with PBGC to improve future compliance. Aggravating factors, such as a heightened potential for harm to participants or PBGC, repeated violations, and willful misconduct, would make waivers less likely and may justify increasing the penalty up to the maximum amount.
Practical considerations for pension plan sponsors and providers
Although the proposal would not change underlying filing obligations, it would provide a more detailed and formal framework for how PBGC assesses, mitigates, and waives penalties for late or missing filings. Plan sponsors, plan administrators, and service providers may want to review current PBGC compliance procedures, especially for reportable events, Section 4010 filings, and other time-sensitive notices.
Please contact your Milliman consultant if you have any questions.
Figure 1: PBGC guidelines for assessing penalties to multiemployer DB plans
| PBGC filing / Notice type | Proposed penalty for 20263 | Notes |
|---|---|---|
| General late filing rule for required notices or other information subject to Section 4302 | Generally maximum daily penalty, currently $365/day No adjustment for small plans |
PBGC generally first notifies the filer of the delinquency and may assess penalties if noncompliance continues |
Figure 2: PBGC guidelines for assessing penalties to single-employer DB plans
| PBGC filing / Notice type | Proposed penalty for 20264 | Notes |
|---|---|---|
| Maximum penalty | $2,739/day | |
| General rule for required notices or other material information under Section 4071 not otherwise specifically addressed | $25/day for first 90 days late; $50/day starting day 91 Plans with under 100 participants, reduced proportionately, but not below $10/day |
Default rule for Section 4071 filings unless another section applies |
| Reportable events – Category 1 • Active participant reduction • Distribution to substantial owner • Extraordinary dividend or stock redemption |
$25/day first 90 days; $50/day thereafter Plans with under 100 participants, reduced proportionately, but not below $10/day |
|
| Reportable events – Category 2 • Failure to make required minimum funding payment • Inability to pay benefits when due • Change in controlled group • Liquidation • Transfer of benefit liabilities • Application for minimum funding waiver • Loan default • Insolvency or similar settlement • Other reportable events not in Categories 1 or 3 |
$100/day Plans with under 100 participants, reduced proportionately, but not below $25/day |
Higher penalty due to greater time sensitivity/risk |
| Reportable events – Category 3 • Failure to make contributions over $1 million • Advance reportable event notice |
$1,000/day No small plan reduction |
Most time-sensitive reportable events |
| Sections 4062(e) and 4063 • Notices following substantial cessation of operations • Substantial employer withdrawal from multiple employer plan |
$1,000/day No small plan reduction |
Reflects high importance and time sensitivity |
| PBGC filing / Notice type | Proposed penalty for 20264 | Notes |
|---|---|---|
| Annual PBGC premium filing | $25/day first 90 days; $50/day thereafter Plans with under 100 participants, reduced proportionately, but not below $10/day |
PBGC generally sends past-due notices first. If the filer responds timely after those notices, PBGC generally does not assess a Section 4071 penalty. |
| Standard termination – Form 500 Standard termination notice | $50/day first 90 days; $100/day thereafter Plans with under 100 distributees (people entitled to distributions), reduced proportionately, but not below $10/day Capped at 5% of value of benefits distributed at termination |
|
| Standard termination – Form 501 Post-distribution certification | $25/day first 90 days; $50/day thereafter Plans with under 100 distributees, reduced proportionately, but not below $10/day Capped $100 × number of distributees or participants, as applicable |
|
| Standard termination – Notice of plan benefits | $25/day first 90 days; $50/day thereafter Plans with under 100 distributees, reduced proportionately, but not below $10/day Capped $100 × number of distributees or participants, as applicable |
Multiple failures generally treated as a single incident |
| Standard termination – Notice of intent to terminate | $25/day first 90 days; $50/day thereafter Plans with under 100 distributees, reduced proportionately, but not below $10/day |
No penalty generally assessed after distribution of assets has begun Multiple failures generally treated as a single incident |
| Distress termination filings/notices | $25/day first 90 days; $50/day thereafter Plans with under 100 distributees, reduced proportionately, but not below $10/day |
|
| Annual 4010 financial and actuarial information reporting – general | $100/day No small plan reduction |
|
| Annual 4010 financial and actuarial information reporting – Special limited filing situation where a full filing was required in the prior year but only a limited filing is required in the current year | $25/day first 90 days; $50/day thereafter No small plan reduction |
Exception within Section 4010 |
1 There was no increase in the penalty for 2026 because the CPI-U for October 2025 was not available due to the government shutdown.
2 Vought, R. T. (April 17, 2026). Memorandum to the heads of executive departments and agencies: Cancellation of penalty inflation adjustments for 2026, regarding the federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. Office of Management and Budget. Retrieved July 28, 2026, from https://www.whitehouse.gov/wp-content/uploads/2026/04/M-26-11-Cancellation-of-Penalty-Inflation-Adjustments-for-2026-Regarding-the-Federal-Civil-Penalties-Inflation-Adjustment-Act-Improvements-Act-of-2015.pdf.
3 Penalties are subject to annual inflation adjustment. There was no increase in the penalty for 2026 because the CPI-U for October 2025 was not available due to the government shutdown. Small plan reduction calculated as the unreduced penalty × (number of participants ÷ 100). Usually based on participants for whom flat-rate premiums were payable for the plan year preceding the plan year of noncompliance; for termination-related filings, based on number of people entitled to distributions (distributees).