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 bill, called a Statement of Account (SOA), will constitute an initial determination by the PBGC for that plan and for the plan year(s) included on the SOA as described in § 4003.21 of the PBGC's regulation on Rules from Administrative Review of Agency Decisions (29 CFR Part 4003). The late charges may 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.
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, a past-due-filing notice, a letter initiating an audit or other notification such as a PBGC email). A penalty rate of 5 percent per month applies to payments made after the PBGC notification 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 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 hardship waiver, contact PBGC.
- Reconsideration of Penalty Based on Reasonable Cause
In general, there is "reasonable cause" for failure to pay a premium in full or on time to the extent that:
(1) The failure arises from circumstances beyond your control, and
(2) You could not avoid the failure by the exercise of ordinary business care and prudence.
It is not generally considered reasonable cause for failure to properly coordinate with an accountant, actuary, lawyer, pension consultant or other individual or firm that is not part of your organization the timely filing and payment of a premium in full or on-time that arises from circumstances within the control of the outside individual or firm, or could be avoided by the exercise of ordinary business care and prudence by the outside individual or firm. Refer to Part 4007 - Payment of Premiums for further details.
The plan administrator may request that the PBGC reconsider the determination of the penalty amount in accordance with the rules of the administrative review regulation. Please note that we do not have the authority to waive premium or interest amounts. Those rules include the following:
- Requests for reconsideration must be filed within 30 calendar days after the date of the first SOA (29 CFR § 4003.32), unless an extension is granted for good cause upon request made before the filing deadline (29 CFR § 4003.4) or the filer did not know and could not have known of the initial determination and files within 30 calendar days after learning of it (29 CFR § 4003.5).
- A request for an extension under § 4003.4 must be in writing, state how much more time is needed and why, and show good cause for the extension. A request for reconsideration must be clearly designated as such, must be in writing, must state the grounds for reconsideration and the relief sought, and must reference all pertinent information already in the PBGC's possession and include any additional relevant information (29 CFR § 4003.34).
- A request for reconsideration or a request for an extension of time to file the request under 29 CFR § 4003.4 must be mailed to:
Pension Benefit Guaranty Corporation
P.O. Box 105758
Atlanta, GA 30348-5758
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 Pay.gov, check or wire transfer outside of My PAA.
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, because the payment will be credited as of the date it was filed, the accrual of late payment charges on the amount paid will stop.
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.
- 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 105758
Atlanta, GA 30348-5758
- Pension Benefit Guaranty Corporation
- 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: XXXXXXXXX/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: XXXXXXXXX/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 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.