[Federal Register Volume 77, Number 27 (Thursday, February 9, 2012)]
[Rules and Regulations]
[Page 6675]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-3054]



29 CFR Part 4007

Premium Penalty Relief for Certain Delinquent Plans

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Policy statement.


SUMMARY: Executive Order 13563 on Improving Regulation and Regulatory 
Review directs agencies to review and improve their regulatory 
processes. As a result of this regulatory review, among other 
initiatives, PBGC is announcing a limited window for covered plans that 
have never paid required premiums to pay past-due premiums without 

([email protected]), Manager, Regulatory and Policy Division, 
Legislative and Regulatory Department, 1200 K Street NW., Washington, 
DC 20005-4026, 202-326-4024. (TTY and TDD users may call the Federal 
relay service toll-free at 1-800-877-8339 and ask to be connected to 

SUPPLEMENTARY INFORMATION: The Pension Benefit Guaranty Corporation 
(PBGC) administers the pension insurance program under title IV of the 
Employee Retirement Income Security Act of 1974 (ERISA). Under sections 
4006 and 4007 of ERISA, plans covered by title IV must pay premiums to 
PBGC. The vast majority of plans covered by PBGC make every effort to 
pay required premiums in full and on time. PBGC depends on these 
premium funds to provide participants and beneficiaries of terminated 
defined benefit plans guaranteed benefits as provided under ERISA.
    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.\1\ PBGC's regulation on Payment 
of Premiums (29 CFR part 4007) 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 
(see 29 CFR 4007.8(a)).

    \1\ PBGC's benefit guarantees apply to plan participants in a 
covered plan even if the plan has failed to pay required premiums. 
However, if the sponsor goes out of business, PBGC often finds out 
that benefits need to be paid only when it is contacted by a plan 

    On January 18, 2011, the President issued Executive Order 13563 on 
Improving Regulation and Regulatory Review (76 FR 3821, Jan. 21, 2011). 
Executive Order 13563 calls, among other things, for agencies to 
develop a plan to review existing regulations to identify any that can 
be made more effective or less burdensome in achieving regulatory 
    As part of PBGC's review of its premium regulations pursuant to 
Executive Order 13563,\2\ 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 
time frames described in this document.\3\ (The relief provided in this 
notice does not apply to late payment interest charges.)

    \2\ PBGC's Plan for Regulatory review can be found at 
    \3\ PBGC recognizes that there may be difficulty in determining 
premiums and premium-related information for years in the distant 
past. PBGC is willing to discuss application of the relief in this 
notice even in situations where not all premiums for past years are 
paid and/or not all premium information for past years is provided.

    To qualify for the relief provided in this document, the plan 
administrator of an eligible plan (or a representative) must--
    1. By July 31, 2012, contact Robert Callahan 
([email protected]) or Bill O'Neill ([email protected]) 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.\4\

    \4\ Currently, premiums must be filed electronically. The 
requirement to file electronically applies to filings for plan years 
beginning in 2006 that are made on or after July 1, 2006, for plans 
with 500 or more participants for the prior plan year and to filings 
for all plans for plan years beginning after 2006. Plan 
administrators and their representatives should review the 
information under the ``New Users'' heading at www.pbgc.gov/prac/prem/online-premium-filing-with-my-paa.html for information on how 
to file premiums electronically. PBGC will discuss with plan 
administrators how to file for years for which electronic filing was 
not available.

    PBGC will use its Web site (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 
    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.

    Issued in Washington, DC, this 31st day of January 2012.
Joshua Gotbaum,
Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2012-3054 Filed 2-8-12; 8:45 am]