Wagner Law Group urges more proportionate PBGC penalties

The Wagner Law Group submitted comments on a proposed PBGC penalty rule, arguing that the agency should better distinguish harmless mistakes from willful misconduct and give more weight to voluntary compliance. The firm wants clearer standards, prompt-cure protections, and more limited penalty accruals for both single-employer and multiemployer plans.

Why it matters: - The proposed PBGC rule could shape how penalties are assessed for missing or incomplete required notices under ERISA Sections 4071 and 4302. - The Wagner Law Group says a more proportionate framework would reward prompt correction, reduce punishment for technical mistakes, and keep sanctions focused on conduct that causes real harm. - The firm also argues that clearer standards would improve transparency and consistency for plan sponsors, administrators, and advisers.

What happened: - The Wagner Law Group filed comments urging the Pension Benefit Guaranty Corporation to adopt a practical penalty framework for material-information violations. - The comments support codifying PBGC penalty policies, while asking the agency to better separate inadvertent errors from knowing, repeated, or obstructive conduct. - Marcia S. Wagner, founder and managing partner, said the recommendations are meant to help PBGC produce a final rule that is practical, fair, and focused on conduct that truly warrants a monetary sanction.

The details: - The comments were developed primarily by Harold J. Ashner and Israel Goldowitz, whose combined PBGC legal service exceeds 50 years. - Ashner previously served as PBGC’s Assistant General Counsel for Legislation and Regulations and helped oversee the agency’s 1995 Section 4071 penalty policy, later revisions, and a 2001 codification proposal. - Goldowitz previously served as PBGC’s Chief Counsel and Deputy General Counsel for Program Law and Policy and supervised PBGC’s original 1992 penalty policy. - Five additional former PBGC professionals contributed: Linda Rosenzweig, Camille Castro, John Langhans, Jonathan Henkel, and Ellan Spring. - Their combined agency experience reflects nearly 90 additional years across legal, ombuds, actuarial, financial, and benefit-policy roles. - The firm supports the proposal’s basic structure, including ordinary Section 4071 penalty amounts of $25 and $50 per day, individualized consideration, and relief for reasonable cause, error of law, agency delay, self-correction, and preventive measures. - The firm wants PBGC to give substantial weight to a filer’s diligence in choosing, instructing, supplying information to, and overseeing outside advisers. - The firm says adviser mistakes should not automatically excuse the filer, but a careful filer’s conduct should matter when assessing the penalty. - The comments recommend allowing a prompt preliminary disclosure to preserve eligibility for self-correction relief while the filer investigates and fixes a possible error in good faith. - The firm wants existing compliance procedures and a strong prior compliance record to remain mitigating factors. - Related deficiencies stemming from one act or omission should not be multiplied mechanically by participant, plan, recipient, or data element. - Requests for clarification or nonmaterial supplementation should not by themselves turn timely filings into continuing delinquencies. - The firm urges PBGC to avoid double-counting aggravating facts and to set workable standards for repeat violations and willfulness. - The comments ask PBGC to give brief explanations when penalties depart materially above ordinary amounts. - Demonstrated absence of actual harm or reasonably expected harm should mitigate penalties. - For a first inadvertent violation that is promptly corrected with cooperation and preventive measures, the firm recommends a presumptive written warning if there is no material harm, no reasonably foreseeable material risk during noncompliance, and no material continuing risk after correction. - The written warning would be a rebuttable presumption, not a safe harbor. - Extreme lateness, recklessness, obstruction, false statements, or unusually serious risk could still justify penalties. - The firm recommends broader proportional relief for plans with fewer than 100 participants. - The comments also call for a general total-penalty guideline of $100 per participant for plans of all sizes, with room for warranted departures. - The firm wants different treatment for advance reportable-event notices and certain missed-contribution notices. - The comments recommend presumptive limits on the number of days penalties accrue, or diminishing accrual over time, for ordinary non-willful violations. - The firm argues that a filing that is a year late is not necessarily 12 times as serious as one that is a month late, especially when no material harm or risk results. - The final rule should also clarify how to treat periods attributable to PBGC delay. - For multiemployer matters under Section 4302, the comments call for codifying notice and a reasonable opportunity to cure before penalties are assessed. - Goldowitz said PBGC should codify that notice-and-cure approach because the agency relies on it to justify generally assessing multiemployer penalties at the statutory maximum once a violation becomes subject to penalty. - The firm also recommends a conforming administrative-review amendment clarifying reconsideration rights. - Newly specified higher daily amounts should apply only to noncompliance on or after the final rule’s effective date. - The rule should preserve PBGC’s described non-enforcement treatment for covered pre-effective-date violations. - PLANADVISER covered the comments in a September 25, 2026 article titled “Wagner Law Group Pushes Back on Proposed PBGC Penalty Rule.”

Between the lines: - The comments are a direct push to keep PBGC’s final rule from becoming a purely punitive regime for paperwork failures. - By leaning on former PBGC officials, the Wagner Law Group is signaling that its critique is informed by agency practice, not just litigation strategy. - The emphasis on diligence, prompt disclosure, and harm-based mitigation suggests the firm wants penalties to function more like compliance incentives than automatic fines.

What's next: - PBGC will review the comments as it considers the final penalty rule. - The firm wants the agency to adopt clearer standards for when penalties begin, how they accrue, and when they should be reduced or replaced by warnings. - The final rule could also clarify reconsideration rights, effective-date treatment, and the handling of PBGC-caused delays.

The bottom line: - The Wagner Law Group wants PBGC to punish bad actors, not trap careful filers in escalating penalties for technical errors.