Late Payment Charges
This webpage relates to late premium payments for plan years beginning in 2016 or later. Different rules apply for earlier plan years. For information about earlier years, see the "Late Payment Charges" section of the Premium Payment Instructions for the plan year in question available from the Premium Payment Instructions & Addresses webpage.
- Penalty Charges HTML | PDF
- Interest Charges HTML | PDF
- PBGC Penalty Waivers HTML | PDF
- Minimizing Late Payment Charges HTML | PDF
- Statements of Account and Past Due Filing Notices HTML | PDF
If you file a premium payment after the due date, we will bill the plan for late charges. The late charges include both interest and penalty charges. The charges are based on the outstanding premium amount due on the due date. PBGC also may assess penalties under ERISA section 4071 for failure to timely provide premium-related information.
The late payment interest charge is set by ERISA, and we cannot waive it. Interest accrues at the rate imposed under section 6601(a) of the Code (the rate for late payment of taxes) and is compounded daily. These rates are published by IRS quarterly and are also posted on the "Interest Rates and Factors" section of the Practitioners Page of PBGC's website.
Late Payment Penalty Charges
Late payments are generally subject to a penalty of 2½% of the late amount per month (or partial month) late, but no more than 50% of the late amount. However, in the event a plan discovers and corrects an underpayment before PBGC sends written notice that there is or may be a premium delinquency, the 2½% rate is reduced to ½% and the cap is reduced from 50% to 25%.
The written notices mentioned above include, but are not limited to:
- Past Due Filing Notice (PDFN) - This notice is sent if we expect to receive a premium filing from the Plan but do not. These notices are sent to the Plan Administrator and address reported on the most recent filing.
- Notice of Filing Error (NFE) - This notice is sent if an initial review of a premium filing indicates an error or inconsistency that must be corrected before the filing can be processed. If you receive a Notice of Filing Error, you must amend your filing to correct the error. If we do not receive an amended filing within 30 days, we will send a PDFN (see above).
- Statement of Account (SOA). - If we receive a filing, but the payment is late or less than the reported amount owed, we will send a Statement of Account. A SOA is, in essence, an invoice for premium, penalty, and interest amounts owed to PBGC. To ensure that the amount due does not increase, the premium and interest must be paid within 30 days of the SOA's issue date.
- Notice of a Premium Compliance Evaluation (PCE) - This notice is sent if we select your premium filing to assess the accuracy of the reported information. See the Premium Filings page on our web site for further information.
If you receive a Statement of Account (SOA) that includes a penalty charge, but you believe there is a reason why all or a portion of the penalty should be waived (e.g., reasonable cause), you may request a waiver. Information about what constitutes reasonable cause as well as information about other situations where a penalty waiver might be warranted can be found in § 21 of the appendix to PBGC's premium payment regulation, 29 CFR Part 4007, available on the "Law and Regulations" page of the Practitioners Page of PBGC's website.
The instructions and timeframe for requesting a waiver will be provided in the SOA. Be sure to follow the instructions carefully. Requests that are submitted late will not be considered.
Hardship (i.e., "Statutory") Waivers
If, before the filing due date, you can show substantial hardship and that you will be able to pay the premium within 60 days after the filing due date, you may request that we waive the late payment penalty charge. If we grant your request, we will waive the late payment penalty charge for up to 60 days. To request a waiver, contact PBGC at least 30 days before the filing due date. Be sure to include specific information and documents to demonstrate both that it will be a substantial hardship to make the payment on or before the filing due date and that you will have the ability to make the payment within 60 days after the filing due date.
Automatic Penalty Waiver for Premiums paid Within Seven Days of Due Date
If the sole reason a late payment penalty charge applies is because a premium was paid after the due date, but within seven calendar days of the due date, the late payment penalty charge will automatically be waived.
PBGC will automatically waive 80% of the penalties assessed at the 2½% rate if the plan:
- Corrects the underpayment within 30 days of PBGC's initial notice, and
- Has a good premium compliance history.
For this purpose, a "good premium compliance history" generally means that the plan paid required premiums timely for the five plan years immediately preceding the premium payment year. In addition, if, during the 5-year period, the plan paid its premium late, but was not required to pay a late payment penalty (e.g., the penalty was waived), the plan is treated as paying timely for that year.
Automatic Penalty Waiver for Certain Late Variable-Rate Premiums
As explained in the "When to File" section, in rare circumstances (e.g., a mid-year merger or change in actuary), the Premium Funding Target might not be calculated or finalized by the premium due date. PBGC allows plans in this situation to file timely and pay an estimated Variable-rate Premium by the due date and then submit an amended filing at a later date to reconcile the actual Variable-rate Premium with the estimate.
Because a plan's full Variable-rate Premium (not merely an estimate) is due by the due date, if the full amount is not paid by that date, the plan will be subject to late payment interest charges and may also be subject to late payment penalty charges.
If the actual Variable-rate Premium is greater than the estimate, penalties for late payment will be waived if:
- the reconciliation filing is made and any additional required Variable-rate Premium paid by the end of the sixth calendar month that begins on or after the premium due date (generally April 30th after year-end for calendar year plans), and
- by the premium due date, you report:
- the fair market value of the plan's assets, and
- an estimate of the Premium Funding Target that is certified by an enrolled actuary to be a reasonable estimate that:
- takes into account the most current data available to the enrolled actuary;
- has been determined in accordance with generally accepted actuarial principles and practices; and
- uses the calculation methodology (alternative or standard) in effect for the plan year; and
- by the premium due date, you pay at least the amount of Variable-rate Premium determined from the value of assets and estimated Premium Funding Target so reported.
Note that this waiver applies only to estimated Premium Funding Targets, not estimated asset values. If the asset value reported in the reconciliation filing differs from what was reported in the original (i.e., estimated) filing, this automatic penalty relief will be lost. However, PBGC will consider a request for an appropriate penalty waiver in such a situation and, in acting on the request, will consider such facts and circumstances as the reason for the mistake, whether assets were overstated or understated, and, if assets were overstated, the extent of the overstatement.
If you know the final Premium Funding Target by the time the Variable-rate Premium is due, you should pay the amount owed by that date. If you do so, you will avoid the interest charge and any penalty charge. If you report that you are making a filing based on an estimated Premium Funding Target, you will be required to make an amended filing reflecting the actual Premium Funding Target by the date the variable-rate reconciliation filing is due.
If you cannot make a filing by the due date because you are having difficulty determining some of the required information, you can minimize late payment charges by submitting payment (the amount due or an estimate) without submitting the certified filing. If you choose to do this, you must pay outside of My PAA, either via Pay.gov, or by check or electronic payment. You should then submit your certified filing as soon as possible. Additional information on payment options is included in Appendix 3.
PBGC may assess a penalty under ERISA section 4071 for failure to furnish premium-related information by the required due date. Making a premium payment without an accompanying premium information filing may cause significant delay in providing a statement of account for the plan. However, when the information filing is ultimately made, the payment will be credited as of the date it was filed and thus stop the accrual of late payment charges on the amount paid.
Saturday, Sunday, and Federal Holidays
As explained in the "When to File" section, if your premium filing due date falls on a Saturday, Sunday or Federal Holiday, it is extended automatically to the next business day. However, if your premium payment is filed after the extended due date, interest and penalties will be computed from the actual (unextended) due date.
Example -The Normal Due Date for a plan with a plan year beginning on January 1, 2017 would normally be October 15, 2017. Because that day is a Sunday, the due date is Monday, October 16, 2017. If the filing is made after October 16th, late payment charges, if applicable, will be computed from Sunday, October 15, 2017, not October 16th.
The payment options are:
Pay.gov can be used to make secure electronic payments to PBGC. Payments can be made directly from your checking or savings account with authorization to process the payment using Pay.gov. Registration on the Pay.gov website is not required. This is a safe and efficient payment method and there is no cost to premium payers. Please be sure your account does not have an "ACH Debit Block". If your account has an "ACH Debit Block", please provide the PBGC Company ID 1601000603 to your financial institution before you submit your payment so they may authorize PBGC to debit your account. Without this authorization, your financial institution may reject the processing of your payment. A Debit Block is the most common reason for failed ACH payments. Transactions on your bank statement will appear as: PBGC Premium Payment.
- Paper check
Write the Employer Identification Number/Plan Number (EIN/PN) and the date the Premium Payment Year commenced (PYC) on the check to help ensure the accurate and timely application of your payment. In addition, My PAA provides you with a voucher to send in with your check to help PBGC automatically match your check with your filing. Please make your check payable to: Pension Benefit Guaranty Corporation. Send the check (and voucher, if provided) to:
- Mailing address via U.S. Postal Service:
Pension Benefit Guaranty Corporation
P.O. Box 105758
Atlanta, GA 30348-5758
- Overnight Delivery address via a delivery service (UPS, FedEx, etc.):
Pension Benefit Guaranty Corporation
c/o Bank of America
1075 Inner Loop Road (2nd Floor)
Atlanta, GA 30337-6086
ATTN: PBGC Box 105758
The payment should be clearly identified with the Employer Identification Number (EIN), Plan Number (PN) and the plan year commencement date (PYC) for the plan. We also request that you include a completed paper check voucher. You should then submit your certified filing as soon as possible.
- Mailing address via U.S. Postal Service:
- Electronic funds transfer (EFT) (other than Pay.gov):
You arrange for payment to be electronically transferred by providing your bank with PBGC's EFT information as follows:
- For ACH payments:
Credit Gateway - ACH Receiver
33 Livingston Avenue
St. Paul, MN 55107
Transaction Code: 22
Standard Entry Class Code: CCD+
Receiving Company Name: PBGC
Addenda Reference: "EIN/PN: XX-XXXXXXX/XXX PYC: MM/DD/YYYY"
- For Fedwire payments:
US Treasury - NYC
33 Liberty Street
New York, NY 10045
Reference: "EIN/PN: XX-XXXXXXX/XXX PYC: MM/DD/YYYY"
- For ACH payments:
Report the Employer Identification Number and Plan Number ("EIN/PN") and the date the Premium Payment Year commenced (PYC) in the payment ID line of the electronic funds transfer in the format "EIN/PN: XXXXXXXXX/XXX PYC: MM/DD/YYYY." Since we process these payments electronically, strict adherence to this format is required for accurate and timely application of your payment. Any deviation from the prescribed format (e.g., combining premiums for two or more plans or plan years into one payment) may result in our sending you a bill for premium, interest, and penalty if our automated system cannot apply your payment.
- Statements of Account
If your payment is late or less than the required amount, we will send a "Statement of Account" (SOA). The SOA is an invoice for premium, penalty, and/or interest amounts owed to PBGC. To ensure that the amount due does not increase, the premium and interest must be paid within 30 days of the SOA's issue date. If you receive a SOA that appears to be in error, contact our customer service representative at 1-800-736-2444 or 202-326-4242, or e-mail firstname.lastname@example.org.
- Notice of Rights - Federal Claims Collection
The Notice of Rights - Federal Claims Collection explains the assessment of interest, penalties, and administrative costs, including methods of collection, mandatory referral for collection, alternative payment arrangements, and other rights concerning federal claims collection
- Account History and the Account History Guide
The Account History shows the results of PBGC's processing of your premium filings and payments for each year. You may view your plan's Account History at Online Premium Filing (My PAA). The Account History Guide is posted on our web site. It explains the terms used on the Account History.
- Past Due Filing Notices
If our records indicate that a premium filing is missing for one or more plan years, we will send a "Past Due Filing Notice" to the address reported on the most recent filing. If you receive a Past Due Filing Notice that appears to be in error, contact our customer service representatives at 1-800-736-2444 or 202-326-4242, or e-mail email@example.com. If a filing was in fact required, after we receive the late filing, we will send a statement of account assessing late payment charges.