US - Plan administrators who fail to give employees notice of the right to sell company stock in their pension plan accounts could now be punished after the US department of labor finalised regulations.
Bradford Campbell, assistant secretary of the labor department's Employee Benefits Security Administration, explained that the Pension Protection Act (PPA) established the rights of plan participants and beneficiaries to sell the company stock in their 401(k) accounts and reinvest the proceeds into other investments available under a plan.
The PPA requires 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 US$100 per day against plan administrators for each violation of the new notice requirement.
"The new right to diversify is an important step in improving retirement security. This rule enforces that right by penalising plan officials who fail to give workers the required notice," said Campbell.
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