US Labor Department implements civil penalty rules under PPA

The U.S. Department of Labor has implemented a regulation allowing the department to assess civil penalties against employers who fail to give employees notice of the right to sell company stock in their 401 (k) pension plan accounts.

Bradford P. Campbell, assistant secretary of the Labor Department's employee benefits security administration: "The Pension Protection Act enacted President Bush's proposal to guarantee workers the right to sell company stock in their 401(k)-type plans. The new right to diversify is an important step in improving retirement security. This rule enforces that right by penalizing plan officials who fail to give workers the required notice."

The US Labour department said: “The Pension Protection Act (PPA) established rights of plan participants and beneficiaries to sell the company stock in their accounts and reinvest the proceeds into other investments available under a plan. The PPA requires plan administrators to notify participants and beneficiaries of this new right and of the importance of diversifying the investment of retirement account assets. The PPA also gives the department authority to assess civil monetary penalties up to $100 per day against plan administrators for each violation of the new notice requirement.”