PBGC Eliminates Missed Quarterly Contributions Report for Small Companies
FOR IMMEDIATE RELEASE
November 03, 1997
The Pension Benefit Guaranty Corporation (PBGC) announced today it is eliminating the reports that small businesses must file with PBGC if they miss quarterly pension contributions.
"This is another example of efforts by PBGC to find ways to ease burdens on pension plan sponsors without jeopardizing workers' pensions," said PBGC Executive Director David M. Strauss.
Notifying PBGC of a missed quarterly contribution is required under PBGC's Reportable Events regulation. Although no comments were made on this provision when the regulation was proposed, a number of small companies subsequently requested an extension or waiver of the requirement because of the year-to-year volatility of their quarterly contribution. To ease the reporting requirement, in May PBGC allowed small companies to file a single notice to cover missed quarterly contributions that were due on or after January 1, 1997, for the 1996 and 1997 plan years.
After analyzing the filings received under the earlier special filing relief, PBGC has found that for these small companies the elimination of the reporting requirement would not be harmful to workers or the pension insurance program. Filing is still required if annual contributions are missed. The waiving of the reporting requirement is effective for missed quarterly contributions due on or after January 1, 1998, for 1997 or later plan years. In addition, PBGC will apply the relief to quarterly contributions described in the May notice.
The relief applies to small companies with defined benefit plans that, in the prior plan year, had:
- (a) 100 or fewer participants or
- (b) 500 or fewer participants and the reporting plan did not have to provide a participant notice (generally because it was at least 90 percent funded).
There are about 10,000 small companies that sponsor some 40,000 pension plans that could be affected. This relief, provided today in PBGC Technical Update 97-6, 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.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by workers. It covers some 42 million American workers and retirees participating in about 50,000 private-sector defined benefit 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. 98-04