Late Payment Charges
- 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. If your due date is extended because it falls on a weekend or federal holiday, and your premium payment is filed after the extended due date, interest and penalty will be computed from the actual (unextended) due date. PBGC also may assess penalties under ERISA section 4071 for failure to timely provide premium-related information.
The late payment penalty charge is established by us, subject to ERISA's restriction that the penalty not exceed 100 percent of the unpaid premium amount. Subject to this cap, the penalty is a percentage of the unpaid amount for each month (or portion of a month) it remains unpaid with a minimum penalty of $25. The monthly rate is higher or lower depending on whether the premium underpayment is "self-corrected." The penalty rate is 1 percent of the late premium payment per month if the late payment is made on or before the date when PBGC issues a written notification indicating that there is or may be a premium delinquency (for example, a statement of account (premium invoice), a past-due-filing notice, or a letter initiating an audit). A penalty rate of 5 percent per month applies to payments made after the PBGC notification date.
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 Practitioners Page of PBGC's Web site.
- 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.
- Reasonable Cause Waivers
Waivers of the late payment penalty charge may also be granted based on a demonstration of reasonable cause. Failure to obtain premium instructions from PBGC is not reasonable cause for a waiver.
If you wish to request a reasonable cause waiver, write or email the PBGC after you receive a statement of account (SOA) assessing penalties. Penalty waiver requests must be received within 30 days after the date of the SOA. PBGC will consider the facts and circumstances and send the plan administrator a written response, generally within 90 days after the request. If the penalty waiver request is denied or granted to a lesser extent than requested, you may request reconsideration of our initial determination within 30 days after the date of the initial determination (unless we ordered the initial determination to be final). PBGC will consider the request for reconsideration independently and will respond to you in writing. This response will be the agency's final determination on the matter. To request a penalty waiver or reconsideration, contact PBGC.
If you cannot make a comprehensive 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 comprehensive filing. If you choose to do this, you must pay by check or wire transfer outside of My PAA.
The options are:
- Electronic funds transfer (EFT) via Automated Clearing House (ACH) or Fedwire
You arrange for payment to be electronically transferred by providing your bank with PBGC's EFT information as follows:
JPMorgan Chase Bank, N.A.
Reference: "EIN/PN: XX-XXXXXXX/XXX
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: XX-XXXXXXX/XXX PYC: MM/DD/YY." 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 into one payment) may result in our sending you a bill for premium, interest, and penalty if our automated system cannot apply your 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. Send the check (and voucher, if provided) to:
- Pension Benefit Guaranty Corporation
P.O. Box 77000
Detroit, MI 48277-0430
- Pension Benefit Guaranty Corporation
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. You should then submit your certified filing as soon as possible.
PBGC does not recommend this procedure. We may assess a penalty under ERISA section 4071 for failure to furnish premium-related information by the required due date, and 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.
- 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, 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. If you receive an 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.
- Past Due Filing Notices
If our records indicate that a premium filing is missing for a particular plan year, 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.