SAR distribution

[Guest paybdb]

Does anyone know what penalty can be imposed for late distribution of an SAR?

Thanks!

[Belgarath]

Some of the attorneys here can undoubtedly give you a better answer, but I suspect it is more of a facts and circumstances test. I'm unaware of any ERISA section that specfies exact penalties, in general, for a late distributiion of the SAR. However, ERISA 501 provides for monetary and criminal prosecution if the disclosure requirement is willfully violated. ((5,000 and up to 1 year in prison, or up to 100,000 if corporation rather than individual.) I have no experience with this, but I'd be surprised if this rather drastic step was taken unless the DOL was trying to nail them for something else.

Other than that, I suppose a participant might bring suit, but again, I'd be surprised if this step was taken very frequently, unless there's something else going on.

I'd guess, and it's only a guess, that a good faith error, where they are distributed once the lack of distribution has been discovered, probably wouldn't generate penalties. I personally have never seen a case where penalties have been imposed, but that's probably because most clients/advisors choose to comply rather than risk a firsthand experience.