By Pension and Benefits Editorial Staff
The Pension Benefit Guaranty Corporation (PBGC) is changing how it announces relief from filing deadlines and penalties when a disaster occurs. Rather than issuing standalone announcements each time the IRS grants disaster relief, the PBGC is streamlining the process by issuing a one-time announcement regarding the PBGC disaster relief that comes into play each time the IRS grants relief in response to a particular disaster. The one-time PBGC announcement explains which types of filings and notices are covered, what the relief entails, how and when to notify the PBGC that a plan qualifies for the relief, and other information. For premium filings, the PBGC is changing its rules so that, in addition to not imposing late payment penalty charges, it will also not assess late payment interest charges. The disaster relief described in the PBGC announcement is applicable for disasters covered by an IRS disaster relief news release issued on or after July 2, 2018.
Disaster relief announcement
When a disaster causes a delay in making a required filing or in taking some other required action, the PBGC generally grants relief by extending the time to act. The PBGC's relief relies on data from IRS announcements and so, historically, the PBGC has followed the IRS's lead when announcing relief. Under this announcement, unless a filing is on the Exceptions List, filers can be assured that the PBGC grants disaster relief when, where, and for the same relief period that the IRS grants relief for taxpayers affected by a disaster. Thus, filers will not have to wait for the PBGC to issue a separate announcement.
The PBGC may also grant case-by-case relief for filing and actions on the Exceptions List.
Except for filings and actions on the Exceptions List, the PBGC will grant relief where there is a disaster for which the IRS announces that tax relief is being granted for affected taxpayers. This includes filing extensions for the Form 5500 series returns. Typically, the IRS announces tax relief for a disaster in a news release that indicates:
- The identifying number of the announcement;
- The disaster for which relief is granted;
- The disaster area covered by the announcement, which typically includes counties within a state; and
- The starting and ending dates of the relief period covered by the announcement.
Each IRS news release may be periodically updated by the IRS to broaden the disaster area to include places that are later affected by the same disaster and covered by the relief. The IRS news releases announcing tax relief for disasters are listed on the IRS's website.
Requirements for disaster relief
The PBGC announcement applies to disaster relief only if all of the following requirements are met:
- The person who is responsible for a filing, payment, or other action under PBGC regulations, such as a plan administrator or contributing sponsor, is located in the disaster area, or a person responsible for providing information or other assistance needed for the filing, payment, or other action, for instance, a service provider, such as the plan's enrolled actuary, or bank, is located in the disaster area.
- The due date of the filing, payment, or other action falls within the relief period.
- The filer notifies the PBGC of the filer's eligibility for disaster relief on or before the last day of the relief period.
- The filing or action is not described in the Exceptions List.
If the requirements for the relief listed are met, the due date for the filing, payment, or other action is extended to the last day of the relief period. As a result, a filing will not be subject to a late filing penalty under ERISA Secs. 4071 or 4302 for the relief period. Further, a premium payment would not be subject to late payment penalty or interest charges under ERISA Sec. 4007 for the relief period.
In addition, the extended due date for a filing or other action will apply for purposes of calculating any other due date that is based on the due date of the filing or other action. For example, if a plan is filing certain actuarial information by an alternative due date that is 15 days after a plan's Form 5500 due date, and the deadline to file a Form 5500 is extended because of a disaster, then the 15-day period in the PBGC's regulation is automatically measured from the last day of the Form 5500 disaster relief period.
How PBGC disaster relief works
Without disaster relief, a calendar-year plan would be required to submit the 2018 Comprehensive Premium Filing (CPF) and pay its 2018 premium by October 15, 2018. Suppose the IRS issues a news release providing disaster relief for taxpayers in a specified disaster area for the period from September 4, 2018 through January 31, 2019. In this instance, if the plan's plan administrator is located in the disaster area covered by the IRS's disaster relief news release, the plan is to notify the PBGC that it is eligible for disaster relief on or before January 31, 2019. This notification is done either by submitting a CPF in which such eligibility is reported or by sending an email to the PBGC. If the plan pays its 2018 premium on or before January 31, 2019, no late payment charges, including interest or penalties, will be assessed. If the plan pays its 2018 premium after January 31, 2019, late payment charges will begin to accrue on February 1, 2019.
The following filings and actions are not covered by the PBGC's disaster relief announcement. These are filings that involve particularly important or time-sensitive information where there may be a high risk of substantial harm to participants or to the PBGC's insurance program. Case-by-case relief for these filings may be requested.
Advance notice of reportable events under ERISA Sec. 4043 (Form 10-Advance) is on the Exception List, including:
- Notices of large missed contributions under ERISA Sec. 303(k) (Form 200);
- Post-event notices for the following five reportable events under ERISA Sec. 4043, including (a) Failure to make required contributions under $1 million; (b) Inability to pay benefits when due; (c) Liquidation; (d) Loan default; and (e) Insolvency or similar settlement;
- Actions related to distress terminations for which the PBGC has issued a distribution notice.
Notifying the PBGC of eligibility for disaster relief
For premium filings, the PBGC should be notified by providing certain information as part of the CPF. Details are located in the Filing Instructions for the applicable plan year. The PBGC encourages filers to notify the agency by email to [email protected] as soon as reasonably possible that the filer is eligible for disaster relief. The email sent to the PBGC should include identifying information, including the number of the applicable IRS news release; plan information such as the plan name, EIN, and plan number; and the name and address of the person who has been affected by the disaster. The name and address of the affected person may be omitted if the plan administrator's address reported in the most recently submitted premium filing is in the applicable disaster area.
In situations where a filer is unable to submit, or anticipates difficulty in submitting, the CPF by the end of the relief period, the filer should notify the PBGC by sending an email to [email protected] with the same information as above.
For all other filings, the PBGC should be notified by following the disaster relief instructions, if any, for the particular filing. If there are no such disaster relief instructions, filers should notify the PBGC of their eligibility for relief by sending an email, by the end of the relief period, to the email address included in the instructions for the particular filing, or on a PBGC webpage listing applicable contact information, such as the PBGC's Contact Information for Practitioners page.
The email sent to the PBGC should contain relevant identifying information, such as the number of the applicable IRS News Release; plan information such as the plan name, EIN, and plan number; and the name and address of the person affected by the disaster. The PBGC urges filers to notify the agency as soon as reasonably possible.
Requesting case-by-case relief
To request case-by-case relief, the PBGC urges that the instructions for requesting a waiver or extension in the regulations or instructions for completing the particular filing be followed. For example, for a reportable events filing on the Exemptions list, the provisions for waivers and extensions in the PBGC's reportable events regulation at PBGC Reg. Sec. 4043.4 should be followed. That provision explains that a request for a waiver or extension must be filed with the PBGC in writing, which can be in electronic form, and must state the facts and circumstances on which the request is based.
If there is no such guidance, the PBGC says, filers should contact the PBGC as soon as reasonably possible using the phone number or email address in the instructions for the particular filing, or on a PBGC webpage listing applicable contact information, such as the PBGC's Contact Information for Practitioners page.
Otherwise, contact the PBGC's Practitioner Problem Resolution Officer by:
- Email at [email protected];
- Telephone at 800-736-2444, extension 4136 or 202-326-4136; or
- U.S. mail at Practitioner Problem Resolution Officer, Pension Benefit Guaranty Corporation, 1200 K Street NW, Suite 610, Washington DC 20005-4026.
Source: PBGC Notice, 83 FR 30991.
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