Throughout the summer the PBGC has been implementing some very helpful practices to easing pension plan practitioners’ jobs when dealing with PBGC-covered DB plans. This has come in the form of:
- Practitioner FAQ Update
- Standard Plan Termination Submission Process Update
- PBGC/ACOPA Joint Web Conference Call
Practitioner FAQ Update
In May, the PBGC updated and bolstered its practitioner FAQ page. The FAQ has expanded its general guidance in the following areas:
- Online Premium Filing with My PAA
- Standard, Distress, and PBGC-initiated Terminations
- Multiemployer Insurance Program
- Missing Participants
- Staff Responses to Practitioners Questions (new)
- Enrolled Actuaries Meetings — Blue Books
- Premiums
- Plan Funding
- Reportable Events
In particular, the Staff Responses to Practitioners Questions section was live in July 2018, and provides views of PBGC staff related to various issues raised by practitioners. The site is careful to caution that this guidance is general in nature, reflective of PBGC staff only, and cannot be relied upon in place of actual published rules, regulations or statements from the PBGC. However, the following topics are addressed with helpful input:
- 430(k) Liens
- Bankruptcy Claims
- Premiums
- Distress Terminations
- Guaranteed Benefits
- Reportable Events
- Valuations
- Other
Standard Plan Termination Submission Process Update
With the increased requirements for documents upon Standard Termination, it was typically an arduous task to gather paper-signed versions of all Form 500 pages, plan documents, plan amendments, 204(h) notice, NOIT, NOPB, etc. and snail-mail them to PBGC in this modern age. Not to mention gathering all distribution documentation for the Form 501 as well!
PBGC has modernized the submission process and now allows the following forms of transmission for Standard Terminations:
Form 500
- Email = [email protected]
- Fax = 202-326-4001
- Upload link (if already working with PBGC contact) = http://pbgc.leapfile.com
Form 501
- Upload link (if already working with PBGC contact) = http://pbgc.leapfile.com
- PBGC contact’s email address
This updated process should undoubtedly ease the administrative burden for clients and practitioners alike. It should also lead toward quicker termination timeframes, thereby making quick year-end terminations more feasible to assist our clients in preventing unnecessary one- or two-month short plan years the following year.
PBGC/ACOPA Joint Web Conference Call
On Aug. 23, 2018, the PBGC and ACOPA cohosted a web conference in which three members from PBGC and two ACOPA members participated in a discussion of how to comply with PBGC reporting requirements, eliminate common filing mistakes, and avoid late filing penalties. Here are some important takeaways from the discussion:
- About 200 events reported to PBGC annually for small plans, with 80% being for missed contributions.
- Actuaries and TPAs should proactively coordinate with clients and PBGC so that PBGC can assist earlier in the process, potentially to help avoid plan termination.
- Missed contributions reporting for small plans:
o Missed quarterly filing waived
o Late contribution filing waived if made within 30 days of deadline
o Reporting waived if missed contribution simply due to late COB/PFB election
- PBGC Form 10 can be filed electronically:
o Upload link (if already working with PBGC contact) = http://pbgc.leapfile.com
o Any plan representative can submit (not only client)
- MyPAA Enhancements:
o Filing status check updated in real-time
o Automatic validation for single plan uploads can help prevent errors
o Quick Links — ability to generate PBGC correspondence templates
- Common mistakes for annual filings — Appendix 4 added to 2018 Comprehensive Premium Filing Instructions:
o Participant count date — unless special rule, always day prior to premium payment year
o Lookback period inconsistencies — small plans must use for EOY valuation dates
o New plans not submitting first year filing
o Submitting payment without proper identification
- Recent payment submission updates:
o Premiums can be paid via www.pay.gov
o USPS address = PBGC, P.O. Box 979120, St. Louis, MO 63197-9000
o Private Delivery address = PBGC, P.O. Box 105758, Atlanta, GA 30348-5758
- More questions? Ask the PBGC, as they are willing to assist!
o (800) 736-2444, option 2
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