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Proposed Rule

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

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Information about this document as published in the Federal Register.

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Published Document

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Employee Benefits Security Administration, Labor.


Proposed rule.


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.


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


To facilitate the receipt and processing of comments, the Department encourages interested persons to submit their comments electronically by e-mail to e, 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​ebsa, 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.

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

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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.

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Signed at Washington, DC, this 3rd day of August, 2007.

Bradford P. Campbell,

Acting Assistant Secretary, Employee Benefits Security Administration, Department of Labor.

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[FR Doc. E7-15568 Filed 8-9-07; 8:45 am]