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Technical Update 97-4: Special Filing Relief for Reporting Missed Quarterly Contributions for 1997


May 08, 1997

This Technical Update provides relief for reporting under PBGC's reportable events regulation for small employers who fail to make quarterly contributions.

Section 4043 of ERISA generally requires a plan administrator or contributing sponsor to notify the PBGC no later than 30 days after a reportable event occurs. On December 2, 1996, the PBGC published a final reportable events regulation (29 CFR Part 4043; 61 Fed. Reg. 63988) that, among other things, requires a plan administrator or contributing sponsor to provide notice to the PBGC when a quarterly installment or other payment required under the funding rules of section 302 of ERISA or section 412 of the Code is not made by the due date for the payment. See 29 CFR § 4043.25. The report is due 30 days after the payment's due date if the payment still has not been made.

A number of small companies have requested waivers from reporting or an extension of the reporting deadline because of the volatility of their year-to-year required contributions. They point out that many small employers delay making quarterly contributions because the plan's actuarial valuation has not been performed, and they are concerned about being subject to the excise tax under Code section 4972 for nondeductible contributions.

This Technical Update applies to all plans that, on each day of the plan year prior to the plan year for which the quarterly contribution is owed, satisfy one of the following two conditions:

(1) The employer had 100 or fewer participants in its defined benefit plans; or

(2) The employer had 500 or fewer participants in its defined benefit plans and was not required to issue a Participant Notice for the plan under section 4011 of ERISA for the plan year for which the quarterly contribution is owed or for the prior plan year.

The number of participants shall be determined in a manner consistent with section 302(d)(6) of ERISA, including the provisions requiring aggregation of all defined benefit plans maintained by the same employer (or any member of the employer's controlled group).

Under this technical update, all missed quarterly contributions due on or after January 1, 1997, for the 1996 or 1997 plan year may be reported in a single notice. This relief applies only if that single reportable event notice is filed by the filing deadline for PBGC Form 1 for the 1997 plan year (September 15, 1997, for calendar year plans).

This relief does not affect the requirement to notify the PBGC of any other reportable event under section 4043 of ERISA (including notice of a plan's inability to pay benefits when due under 29 CFR § 4043.26). In addition, the extension does not affect the requirement to file the Form 200 if the aggregate unpaid balance of any required payments, including interest, exceeds $1 million. See 29 CFR § 4043.81.

The instructions to PBGC Form 10 explain how reportable event notices should be filed. To obtain a copy of the Form 10, you may download it from PBGC's Web Site:

Reportable Events Forms

or contact:

Reports Processing
Insurance Operations Department
Pension Benefit Guaranty Corporation
1200 K Street N.W.
Washington, D.C. 20005-4026
Telephone: (202) 326-4000

Hearing-impaired persons may telephone 1-800-877-8339 and give the communications assistant the above number.