PBGC Simplifies Small Company Reporting for Missed Quarterly Contributions
FOR IMMEDIATE RELEASE
May 08, 1997
To ease reporting burdens for small companies this year, the Pension Benefit Guaranty Corporation (PBGC) is simplifying reporting of missed quarterly pension contributions. Rather than separately reporting each missed payment within 30 days after the payment's due date, affected companies may file one notice covering all missed payments by the deadline for making PBGC premium payments for the 1997 plan year.
About 10,000 small companies that sponsor some 40,000 pension plans are affected. The relief, provided today in PBGC Technical Update 97-4 , applies to small companies with defined benefit plans that, in the prior plan year, either had (a) 100 or fewer participants or (b) 500 or fewer participants and the reporting plan did not have to provide a PBGC participant notice (generally because it was at least 90 percent funded). The relief applies only to missed contributions due on or after January 1, 1997, for the 1996 and 1997 plan years.
To take advantage of the relief, the company must file its one required notice by the due date or PBGC premiums, which is September 15 for calendar year plans and is generally the 15th day of the 8th full calendar month following the month in which the plan year began.
PBGC will be analyzing the filings received to determine whether, and how, the filing requirements for small plans should be modified for future years.
This relief does not affect any other requirement for filing a reportable event notice or the notice due when aggregate missed contributions total $1 million or more.
The notice of a missed quarterly pension contribution is required under PBGC's December 2, 1996, amendment to the Reportable Events regulation (29 CFR Part 4043; 61 Fed. Reg. 63988), which followed a negotiated rulemaking process. No comments were made on this provision when the amendment was proposed. But a number of small companies have since requested an extension or waiver of the reporting requirement because of the year-to-year volatility of their required contributions and their lack of current actuarial valuations.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by more than 42 million American workers and retirees participating in private-sector defined benefit pension plans. PBGC insures about 50,000 pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns.
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PBGC No. 97-27