PBGC Announces Delinquent Premium Payment Program and Penalty Relief for Certain Plans Through Summer of 2012

The Pension Benefit Guaranty Corp. (PBGC) has announced a limited window for covered plans that have never paid required premiums to pay past-due premiums without penalty.
 
A few times a year, PBGC becomes aware of a covered plan that has never filed PBGC premiums, in some cases because the plan administrator was unaware that the plan was covered. PBGC’s regulation on payment of premiums requires that in addition to the unpaid premiums, such a plan must pay interest and penalties. PBGC believes that one reason plan administrators of covered plans that have not paid any required premiums fail to come forward is that penalties can be quite substantial, often as much as 100 percent of the unpaid premium.
 
PBGC is adopting a voluntary compliance program to encourage compliance and reduce workload burden in connection with covered plans that have never paid required premiums. PBGC will waive premium payment penalties (as well as information penalties under ERISA Section 4071 for failure to timely file premium information) for any such plan, if the plan administrator contacts PBGC, pays past due premiums, and files required information within the certain time frames.
 
To qualify for the relief, the plan administrator of an eligible plan (or a representative) must:

1. By July 31, 2012, contact Robert Callahan (callahan.robert@pbgc.gov) or Bill O’Neill (oneill.bill@pbgc.gov) of PBGC’s Financial Operations Department (202–346–4067) to discuss how to comply with premium filing requirements to obtain this relief, and
2. By August 31, 2012 (or a later date specified by PBGC), pay past-due premiums and file required premium information.
 
PBGC will use its website (www.pbgc.gov) and other methods (e.g., presentations at professional conferences) to educate plan administrators of covered plans that may not be paying required premiums about premium requirements. PBGC expects that these efforts, together with the relief provided in this document, will encourage compliance. Out of fairness to compliant plan sponsors and to protect participants, after the end of the period for taking advantage of this relief, PBGC will step up its efforts to enforce premium requirements for covered plans that have not paid any required premiums, including assessment of penalties.