Following up on a previous announcement, the Pension Benefit Guaranty Corporation (PBGC) has shared more detail about its intent to waive certain penalties and extend certain filing deadlines in response to the hurricane disaster in Texas and Louisiana.
Technically speaking, this disaster relief announcement provides relief relating to PBGC deadlines to “designated persons.” A “designated person” is defined as “any person responsible for meeting a PBGC deadline (e.g., a plan administrator or contributing sponsor) that is located in the disaster area for which the Internal Revenue Service (IRS) has provided relief in TX-2017-09, in connection with filing extensions for Form 5500 series returns, or cannot reasonably obtain information or other assistance needed to meet the deadline from a service provider, bank, or other person whose operations are directly affected by the severe storms and flooding from Hurricane Harvey that began on August 23, 2017, in Texas.”
In TX-2017-09, the IRS provides relief in connection with filing extensions for Form 5500 series returns as a result of the disaster for taxpayers who reside or have a business in the disaster area. The relief generally extends from August 23, 2017, through January 31, 2018. As laid out by PBGC, the disaster area consists of Aransas, Bee, Brazoria, Calhoun, Chambers, Fort Bend, Galveston, Goliad, Harris, Jackson, Kleberg, Liberty, Matagorda, Nueces, Refugio, San Patricio, Victoria and Wharton Counties.
If IRS adds additional areas in connection with those filing extensions, any person responsible for meeting a PBGC deadline that is located in those additional areas will also be a designated person, PBGC confirms.
PBGC also clarifies that this disaster relief announcement “does not cover every situation in which PBGC disaster relief may be warranted. For example, it does not capture every person that might experience difficulty in meeting a PBGC deadline for reasons relating to the severe storms and flooding from Hurricane Harvey that began on August 23, 2017, in Texas. It also does not grant specific disaster relief for all filings. For example, it does not provide relief for certain filings that involve particularly important or time sensitive information where there may be a high risk of substantial harm to participants or the PBGC insurance program, e.g., notices of large missed contributions under section 302(f) of ERISA (Form 200), advance notices of reportable events under ERISA section 4043, and annual financial and actuarial information from certain controlled groups under ERISA section 4010.”
Those persons affected by the severe storms and flooding from Hurricane Harvey that began on August 23, 2017, in Texas who need relief from PBGC that is not covered by this disaster relief announcement should contact PBGC as soon as reasonably possible. To request case-by-case relief, contact Diane Morstein at PBGC by calling 1‑800‑736‑2444, extension 4136, or 202‑326‑4136; sending an e-mail to firstname.lastname@example.org; or “writing to Diane Morstein, Pension Benefit Guaranty Corporation, Suite 610, 1200 K Street, NW, Washington, D.C. 20005‑4026, Re: “Disaster Relief Announcement 17-09”.
Claiming disaster relief
Other information shared by PBGC suggests that if the plan administrator of a plan is a designated person, PBGC will, for purposes of assessing any late payment or late information penalty, treat as timely any premium filing required to be made for the plan beginning on or after August 23, 2017, and on or before January 31, 2018, if the filing is made by January 31, 2018. Thus, for any such filing, PBGC will waive the applicable penalty, but not the applicable interest charges.
Concerning single-employer plan terminations, if the plan administrator of a plan that is terminating in a standard termination is a designated person, any of the following plan termination deadlines for the plan that fall on or after August 23, 2017, and on or before January 31, 2018, are extended to January 31, 2018:
- The deadline for filing the standard termination notice (Form 500). This automatically extends the deadline for providing notices of plan benefits to participants and beneficiaries because that deadline is the date when the standard termination notice is filed.
- The deadline for completing the distribution of plan assets.
- The deadline for filing the post-distribution certification (Form 501) without penalty. This automatically extends the deadline for filing missing participant information and certifications without penalty and for paying missing participants’ designated benefits to PBGC without interest.
If the plan administrator of a plan that is terminating in a distress termination is a designated person and the deadline for filing the distress termination notice (Form 601) falls on or after August 23, 2017, and on or before January 31, 2018, that deadline is extended to January 31, 2018.
PBGC goes on to explain that regulations on annual financial and actuarial information reporting require annual financial and actuarial information reporting in certain cases by contributing sponsors (and their controlled group members) maintaining plans with large underfunding or certain missed contributions or funding waivers. PBGC will grant relief where appropriate on a case-by-case basis for these reports.
The deadline for requesting review of a PBGC determination under PBGC’s regulation on rules for administrative review of agency decisions is generally 45 days (for an appeal) or 30 days (for a request for reconsideration) after the date of the determination. If a designated person is aggrieved by a PBGC determination, and the deadline for filing an appeal or a request for reconsideration of the determination falls on or after August 23, 2017, and on or before January 31, 2018, that person’s deadline for filing the appeal or request for reconsideration is extended to January 31, 2018.
Importantly, the disaster relief relating to premium deadlines also applies to multiemployer plans. For other multiemployer deadlines, under PBGC’s regulations governing multiemployer plans, various persons are subject to deadlines for making filings with PBGC, issuing notices to persons other than PBGC, and taking other actions. If the person responsible for meeting the deadline is a designated person, and the deadline falls on or after August 23, 2017, and on or before January 31, 2018, PBGC will neither assess a penalty under ERISA section 4302 nor take any other enforcement action with respect to any failure to comply with the deadline during the period ending on January 31, 2018.
Links to many of the forms mentioned above are available in the PBGC relief announcement, available in full online here.