Sarbanes-Oxley Letter

[Nassau]

What are the implications and/or penalties to the company, if a plan adminstrator does not get the Sarbanes-Oxley Letter mailed to participants within the required timeframe (e.g., 30 days from the freeze date)?

[Lou S.]

Penalties.

The Act creates a new ERISA civil penalty in connection with the blackout period notice requirement.

Specifically, if a plan administrator fails

or refuses timely to provide a blackout notice to plan participants and beneficiaries, the DOL may assess a

civil penalty of up to $100 per participant and beneficiary for each day of the plan administrator’s failure or refusal.

If there is reasonable cause it could get waived but the potential liability is $100/participant/day.