Employee Benefit Plans

Learn about the uniform minimum standards required by federal law to ensure that employee benefit plans are established and maintained in a fair and financially sound manner. http://www.dol.gov/asp/programs/guide/erisa.htm

Workers' Compensation Programs

Learn the ins and outs of general federal and state workers' compensation rules or look up specialized programs to aid coal miners, longshoremen, and workers from other industries. http://www.dol.gov/esa/owcp_org.htm

Benefit Guarantees FAQs

Answers to frequent questions about benefit guarantees. http://www.business.gov/topics/employees/benefits/guaranties_faq.html

How will I know if my pension plan is ending?

If your employer is seeking to end the plan, your plan administrator must notify you in writing that your plan is ending at least 60 days before the termination date. This notice is called the Notice of Intent to Terminate. If PBGC itself is seeking to end the plan, we notify the plan administrator and often publish a notice about our action in local and national newspapers.

What is the Pension Benefit Guaranty Corporation (PBGC)?

PBGC is a federal agency that insures and protects pension benefits in certain pension plans. If your plan is insured by PBGC, we guarantee your pension benefits up to certain legal limits. If your employer has financial difficulty and cannot fund the plan and the plan does not have enough money to pay all promised benefits, your plan ends (plan termination). PBGC then takes over the plan as the trustee and begins to pay pension benefits. The amount and type of pension benefits we pay are determined by your plan and the Employee Retirement Income Security Act (ERISA), which established PBGC. PBGC is not funded by taxes; our financing comes mainly from insurance premiums paid by companies whose plans we protect. If your plan is the type of plan insured by PBGC, your plan is insured even if your employer fails to pay the required premiums.

What types of plans does PBGC insure?

PBGC insures defined benefit plans, the type that promises to pay participants a specific monthly benefit at retirement. PBGC does not insure retirement plans that do not promise specific benefit amounts (defined contribution pension plans), such as profit sharing, or 401(k) plans.

How can I find out if my pension plan is insured by PBGC?

The easiest way to find out if your plan is insured by PBGC is to ask your employer or the person who administers the plan. Although PBGC insures most defined benefit plans, there are some that are not covered. For example, plans offered by professional service firms (such as doctors and lawyers) with fewer than 26 employees, church groups, and federal, state, or local governments are usually not insured. These questions and answers cover only single-employer plans, by far the larger group insured by PBGC. These are normally sponsored by an individual company for the benefit of its workers. (PBGC also insures multiemployer plans, which cover unionized workers of nonrelated employers in the same industry, such as trucking or construction.)

Why do pension plans end?

Pension plans usually end for one of three reasons:

The employer is having financial problems and can no longer support the plan.
The plan has enough money to pay all promised benefits and the employer wants to end the pension plan.
The plan does not have enough funds to pay participants, and PBGC decides that it should be ended in order to protect the interests of participants or PBGC.

How do pension plans end?

Employers can end pension plans through a process called termination. There are two types of termination.

In a standard termination, an employer ends a plan that is fully funded after showing PBGC that there is enough money to pay all benefits owed. The plan will provide you the benefits owed either by purchasing an annuity for those benefits from an insurance company or, if your plan allows, in a lump sum. If an annuity is purchased, the insurance company will pay the retirement benefits. Your plan administrator must tell you what insurance company or companies your plan is considering as a possible annuity provider before making a final selection. PBGC's guarantee is ended when the employer purchases the annuities or otherwise pays you the value of your pension.

In a distress termination, an employer ends a plan that does not have enough money to pay all benefits owed. To do so, however, the employer must prove to PBGC that the business is financially unable to support the plan. PBGC takes over the plan as trustee; it uses its own assets and any remaining assets in the plan to make sure that current retirees and future retirees of the plan receive their pension benefits within the legal limits. Under certain conditions, PBGC may terminate a pension plan, even if a company has not filed to terminate the plan on its own initiative. PBGC can take such action if, for example, a plan does not have sufficient assets to pay benefits currently due.

What other information should I receive from my plan administrator?

In a standard termination, you should receive a second letter, called the Notice of Plan Benefits, that gives you information about the benefits you will receive.

In a distress termination, the plan administrator will send information regarding your benefits to PBGC. We will then determine the amount of your benefits that are guaranteed by our insurance program and will notify you in writing of our determination.

Can I earn additional benefits after my plan ends?

No additional benefits may be earned after the plan ends.

What happens if PBGC takes over my plan?

We try to notify you quickly when we take over a plan. We then begin reviewing your plan's records to determine what benefits each person will receive from PBGC. If you are already retired and receiving benefits, we will continue paying benefits without interruption during our review. These payments (which may be less than you are receiving from your plan) will be an estimate of the benefits that PBGC can pay under the insurance program. If you have not yet retired, we will begin paying your estimated benefits when you become eligible for them and you have applied for those benefits. Once we complete our review, we will tell you in writing what your pension amount will be under the law and what rights you have to appeal our decision. The pension benefit that PBGC can pay will depend on:

Your age
The provisions of your plan
The form of your benefits
The legal limits on what PBGC can guarantee
Amounts PBGC recovers from employers for plan underfunding

To ensure PBGC has the proper information on all participants, we will contact you periodically to request any changes.

What happens if PBGC's estimate is too high or too low?

In general, if we underpay a benefit when we take over a plan, we will make it up in a single payment with interest when we complete our calculations. If we overpay you, we will reduce future payments until the overpayment has been repaid. The reduction usually is no more than 10 percent of each payment. Of course, if both overpayments and underpayments were made, we will calculate the net overpayment or underpayment.

What is the maximum amount that PBGC can guarantee?

The maximum plan benefit PBGC can guarantee is set by law each year, under provisions of ERISA. For pension plans ending in 1999, for example, the maximum guaranteed amount is $3,051.14 per month ($36,613.68 per year) for a worker who retires at age 65. This maximum monthly amount is reduced if you begin receiving payments before age 65 or if your pension includes benefits for a survivor or other beneficiary. The table at the end of these questions and answers lists examples of PBGC's maximum guaranteed benefits for 1999 and prior years.

What benefits does PBGC guarantee?

PBGC guarantees basic benefits, which include:

Pension benefits at normal retirement age
Most early retirement benefits
Disability benefits for disabilities that occurred before the plan was terminated (for terminations started after December 7, 1994, the reduced maximum guarantee for ages younger than 65 does not affect the benefits received by disabled participants who receive a disability benefit from both the pension plan and Social Security)
Certain benefits for survivors of plan participants

PBGC does not guarantee such benefits as health care, vacation pay, or severance pay.

Are there other limits on PBGC's guarantee?

Yes. For example, if your plan was created or increased within five years before it ended, your benefits may not be fully guaranteed. A phase-in rule is applied to determine how much of the benefits or the benefits increase is guaranteed. Generally, the larger of 20 percent or $20 per month of the benefits (or of the benefits increase) is guaranteed for each full year the plan (or increase) was in effect.

Does PBGC pay survivor benefits?

PBGC pays survivor benefits if you retired before your plan ended and your benefits included survivor benefits or if you were receiving survivor benefits before the plan ended. If you are married and begin receiving retirement benefits after the plan ends, we will normally pay your benefits as a joint-and-survivor annuity unless you and your spouse tell us, in writing, that you do not want this kind of annuity. Joint-and-survivor coverage provides that if you die first, your spouse will continue to receive a portion of your benefits. With a joint-and-survivor annuity, your monthly benefits are generally reduced during your lifetime to pay for the cost of the survivor annuity. For plans that are terminated on or after August 23, 1984, we also provide preretirement survivor annuity coverage if you are married and not yet retired. This coverage provides benefits to your spouse if you die before you retire. PBGC provides the coverage without charge after plan termination.

Can I receive my benefits from PBGC in a lump sum or as a monthly annuity?

Normally, benefits are paid in the form of an annuity on a monthly basis. However, if the monthly benefit is $50 or less, payments generally will be made on a yearly basis. If the full value of the benefit is $5,000 or less, you will receive a single lump sum payment. If, in this case, the benefits are at least $25 a month, you may elect to receive them as an annuity.

Can I put my lump sum into an Individual Retirement Account (IRA)?

Yes. If the taxable portion of your lump sum payment is transferred directly by the plan or PBGC into an IRA, you will not have to pay taxes on your benefits until you begin receiving IRA payments. This deposit is called a tax-free rollover. (A single payment from PBGC for missed or underpaid benefits is not a lump sum that can be rolled over.) For more information about tax-free rollovers and the laws controlling IRAs, call 1-800-TAX-FORM or write the Internal Revenue Service office nearest you.

Will PBGC adjust my pension yearly for inflation?

No, there is no cost of living adjustment. Your benefits are fixed as of the date your plan ended (date of termination), subject to the maximum limits and restrictions already mentioned in these questions and answers.

Will my deductions stay the same if PBGC takes over my plan?

PBGC only deducts federal income taxes. You will have to make your own arrangements to pay state taxes and other amounts deducted.

If I have other questions about PBGC, how can I find the answers?

If you have questions about a pension plan that PBGC has taken over or about our insurance programs and retirement guarantees, contact PBGC's Technical Assistance Branch at 1200 K Street, NW, Suite 930, Washington, DC 20005-4026 or call us at (202) 326-4000 (not a toll-free number). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to (202) 326-4000. If you have specific questions about your plan or benefits, you should first contact your plan administrator or your employer.

PBGC Maximum Monthly Guarantees

Examples of the maximum guarantee for a single life annuity with no survivor benefits are shown for retirement at ages 65, 62, 60, or 55. The maximum is further reduced if the benefits are paid in a form other than for a single life annuity, such as a form that provides for survivor benefits. The pension benefits that PBGC can pay will depend on your age, the provisions of your plan, the form of your benefit, the legal limits on what PBGC can guarantee, and amounts PBGC recovers from employers for plan underfunding. http://www.pbgc.gov/services/descriptions/guarantee_table.htm

Plan Terminations

Is your retirement plan safe if your company goes under? http://www.business.gov/topics/employees/benefits/plan_terminations.html

What types of plans are insured by PBGC?

PBGC insures most private sector defined benefit pension plans. This is the type of plan that promises to pay a specified monthly benefit at retirement, usually based on salary or a stated dollar amount and years of service. PBGC does not insure certain types of defined benefit plans, such as government retirement plans or plans of professional service employers (such as doctors and attorneys) with 25 or fewer active participants. PBGC also does not insure defined contribution plans, (i.e., plans in which benefits are based solely on the assets in the participant's individual account, such as profit-sharing, 401(k), and target benefit plans).

Does PBGC cover plans for self-employed individuals?

Plans covering only self-employed individuals are not automatically exempt from PBGC coverage. However, PBGC does not cover a plan that covers only self-employed individuals if all participants and beneficiaries are substantial owners (i.e., each participant or beneficiary owns more than 10% of the business). A plan that covers a self-employed person who is not a substantial owner (e.g., a partner who owns 10% or less of the partnership) is covered by PBGC unless the plan is exempt for another reason (such as the exemption for plans maintained by professional service employers that at all times since September 1974 have had 25 or fewer active participants). (For purposes of PBGC coverage of a defined benefit pension plan, a substantial owner is defined to be an individual who owns the entire interest in an unincorporated trade or business or, generally, more than 10% of a partnership or corporation.)

What is a plan termination?

A pension plan is terminated only by following certain specific rules:

A plan that has enough money to pay all benefits owed to participants and beneficiaries may terminate in a standard termination. For each participant or beneficiary, the plan administrator either purchases an annuity from an insurance company or, if the plan permits, pays the benefit owed in a lump sum.

A plan that does not have enough money to pay all benefits owed participants and beneficiaries may be terminated only if the employer and the members of the employer's controlled group of affiliated companies each meets one of the distress termination tests. To do so, however, the employer must prove that the controlled group is financially unable to support the plan. PBGC takes over the plan as trustee and uses its own assets and any remaining assets in the plan to make sure that current and future retirees of the plan receive their pension benefits within the legal limits. PBGC also tries to collect plan underfunding from employers and shares a portion of its recoveries with participants and beneficiaries.

Under certain conditions, PBGC may terminate a pension plan, even if a company has not filed to terminate the plan on its own initiative. PBGC will take such action if a plan does not have sufficient assets to pay benefits currently due and may do so in other cases. This is called an involuntary termination.

May I file my signed standard termination forms by fax?

No. A valid standard termination filing requires original signatures by the plan administrator on the Forms 500 and 501 and by the enrolled actuary on the Schedule EA-S. See GENERAL INSTRUCTIONS FOR FORM 500 AND 501 under the Standard Termination Filing Instructions for more information. (The Form 500 is the Standard Termination Notice, the Form 501 is the Post-Distribution Certification, the Schedule EA-S is the Standard Termination Certification of Sufficiency.)

What happens after a filing has been submitted if the plan administrator decides not to terminate the plan?

While there is no requirement that the plan administrator notify PBGC of a decision not to proceed with a termination after having filed a Form 500 (Standard Termination Notice) with the agency, PBGC will contact the plan administrator for information if the agency fails to receive all required filings for the termination. The plan administrator may therefore wish to inform PBGC of a decision not to proceed to avoid needless communications. Correspondence should be addressed to PBGC, Technical Assistance Branch, Suite 930, 1200 K Street NW, Washington, DC 20005-4026. In the Notice of Intent to Terminate that is provided to affected parties, the plan administrator must inform them that they will be notified if the termination is canceled. The plan administrator therefore should notify affected parties promptly after deciding not to terminate the plan. Thereafter, if a decision is made to again proceed with the termination, the process must begin with a new date of plan termination and Notice of Intent to Terminate.

Do I have to give spousal election forms to participants in rollover situations?

Yes. A rollover of an amount exceeding a plan's de minimis cash-out level is an optional form of distribution that, when elected by a married participant, is subject to spousal consent. The plan may have a cash-out level of up to $5,000 (increased from $3,500 by the Taxpayer Relief Act of 1997, effective for plan years beginning after 8/5/97) without spousal consent. Distributions from the plan must comply with the written terms of the plan as well as the requirements of ERISA.

Do plan administrators have to provide the notice of identity of insurers to participants expected to elect lump sums?

Yes. One purpose of the notice is to help participants make informed elections between lump sums and annuity benefits. Also, even a participant who has already elected a lump sum may change the election. This notice is not required in the case of a participant or beneficiary who will receive a nonconsensual de minimis cash-out.

Should I wait to file the Post-Distribution Certification (PDC) until all assets have been distributed?

No. The PDC is due 30 days after you complete distribution in satisfaction of all plan benefits. The PDC includes a plan administrator's certification that assets in excess of those needed to satisfy benefit liabilities have been or will be distributed in accordance with applicable provisions of ERISA and implementing regulations. However, under a new penalty policy adopted in March 1997 to provide penalty relief, PBGC will not assess a penalty if the PDC is filed within 90 days after the deadline for completing the distribution.

What are the premium payment rules regarding terminating plans? Why are payment notices sometimes sent to terminated plans?

The obligation to pay premiums does not cease immediately on a plan's termination date. The obligation to file premium forms and payments continues until the end of the plan year in which (1) plan assets are distributed in satisfaction of all plan benefits or (2) a trustee is appointed under ERISA Section 4042. This means that a full year's premium must be paid through the plan year in which one of these occurrences takes place. As a result, terminated plans may receive Past Due Filing Notices if a required premium filing is missing or Statements of Account if a required premium is late or insufficient.

Why do I continue to receive premium filing booklets for my terminated plan, and how do I stop this mailing?

Terminated plans may still owe premiums, as described in the answer to Question 17, and, therefore, may still receive premium filing booklets for this purpose. If, however, you believe no further premiums are due for your plan, contact PBGC's premium payer customer service representatives at 1-800-736-2444 (or at 202-326-4242 if you are in the local Washington, DC area). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the appropriate number in the preceding sentence. If there are no further premiums due for the plan, the booklet mailing will stop with the following year's mailing.

How does PBGC decide which standard terminations to audit?

Plans are randomly selected from among all terminations completed during the target period, to meet our statutory requirement of a statistically significant sample. PBGC also may audit a plan when we have reason to believe there may be a problem (for example, when we receive a complaint by plan participants or a plan practitioner).

Does PBGC nullify the termination if it finds a distribution error during the standard termination audit?

PBGC requires that participants and beneficiaries be made whole. For example, if participants did not receive all of the benefits to which they were entitled, the plan administrator must distribute additional benefits, or if participants were not given all of the options available to them under the plan, the plan administrator must provide those options and honor any changes requested. If the plan administrator does not cooperate in correcting errors, PBGC has the authority to nullify the termination.

How do I close out my plan if I can't locate every participant and beneficiary?

PBGC's Missing Participants Program, created by the Retirement Protection Act of 1994, locates people owed benefits from PBGC-insured defined benefit pension plans closed out through a standard termination. An employer choosing to terminate a fully funded pension plan must distribute all plan benefits to participants and beneficiaries before completing the plan's termination. If someone cannot be found after a diligent search, the plan administrator must either purchase an annuity from a private insurer in that person's name and provide information on the missing person and insurer to PBGC or transfer the value of the person's benefit to PBGC's Missing Participants Program.

My plan isn't terminating, but I have a number of "missing participants." May I turn their benefits over to PBGC?

No. ERISA limits PBGC's Missing Participants Program to terminated plans. Ongoing defined benefit plans and plans that aren't covered by PBGC are not eligible for this program.

Is a diligent search required if an annuity is purchased for a missing participant?

A diligent search is required by law for any missing participant, whether you pay a benefit directly to PBGC for the participant or purchase an annuity.

What requirements must be met for a diligent search before money can be paid to PBGC?

A plan administrator frequently learns a participant or beneficiary is missing after sending the Notice of Intent to Terminate to the person's last known address. After learning that the person is missing, the plan administrator is required to conduct a diligent search. A diligent search includes seeking out any beneficiaries of the missing participant whose names and addresses are known to the plan administrator. It also includes use of a commercial locater service, such as a credit reporting firm. The participant may not be charged for the search. The plan administrator must complete the diligent search before transferring money to PBGC for the person's benefit.

When must a diligent search be done?

A diligent search must begin not more than 6 months before notices of intent to terminate are issued. It must be carried on in such a manner that if the individual is found, distribution to the individual can reasonably be expected to be made in a timely manner.

May I use PBGC's Missing Participants Program for a participant whose whereabouts are known but who refuses to return the election forms?

No. The Missing Participants Program is only for unlocatable participants. The plan administrator should purchase an annuity to provide benefits if the participant fails to make an election.

Does 20% tax withholding apply to the transfer of a participant's benefit to PBGC under the Missing Participants Program?

No. PBGC has received an information letter from the Internal Revenue Service regarding the tax treatment of amounts transferred to PBGC for a missing participant.

If a PBGC audit finds that additional amounts are due to participants after I have completed benefit distributions to all participants in a standard termination, what are the tax consequences of the subsequent supplemental distributions?

While PBGC makes the determination whether additional amounts are owed to participants, the income tax consequences for the plan sponsor, plan, and plan participants would be determined by Internal Revenue Code rules and regulations. You may wish to ask the IRS or your tax adviser(s) for specific guidance.

When replacing a defined benefit plan with a defined contribution plan, may the assets in the defined benefit plan be merged or transferred directly into the defined contribution plan without participant and spousal consent?

Conversion of a defined benefit plan into a defined contribution plan (whether a target benefit, profit-sharing, 401(k), or other type of defined contribution plan) is a voluntary termination of the defined benefit plan and is subject to all the rules and requirements governing terminations of defined benefit plans. This includes all notices to participants and beneficiaries and filings with PBGC. Benefit elections and spousal consents are governed by the applicable provisions of the Internal Revenue Code and the implementing regulations.

Where should checks and filings for standard and distress terminations be sent to PBGC?

It is very important that the correct mailing address be used, in particular for the submission of checks and forms, as there are different addresses for different situations. If you are unsure of whether you have the correct address, please contact PBGC first for clarification (click here for customer service information).

Plan terminations and coverage requests should be sent to:
Pension Benefit Guarantee Corporation
Technical Assistance Branch, Suite 930
1200 K Street NW
Washington, DC 20005-4026

Missing participant program payments and vouchers should be sent to:
Pension Benefit Guarantee Corporation
P.O. Box 64523
Baltimore, MD 21264-4523

Where should inquiries be directed?

For plan termination and coverage inquiries and requests (e.g., requests for plan termination-related forms and booklets, questions about the missing participants program) or other plan-related questions (e.g., participant notice requirements): call 1-800-736-2444 (or 202-326-4242 if you are in the local Washington, DC area). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the appropriate number in the preceding sentence.

Write:
Pension Benefit Guarantee Corporation
Technical Assistance Branch, Suite 930
1200 K Street NW
Washington, DC 20005-4026
Visit: www.pbgc.gov

Premiums

Basic information about what premiums are, who is responsible for them, and where they should be sent. http://www.business.gov/topics/employees/benefits/premiums.html

What are the current premium rates for PBGC-insured plans?

Currently, all PBGC-insured single employer defined benefit pension plans pay a flat rate charge of $19 per participant per plan year. Underfunded single employer plans pay an additional variable rate premium of $9 for every $1,000 (or fraction thereof) of unfunded vested benefits. Currently, all PBGC-insured single employer defined benefit pension plans pay a flat rate charge of $19 per participant per plan year. Underfunded single employer plans pay an additional variable rate premium of $9 for every $1,000 (or fraction thereof) of unfunded vested benefits. The premium rate for PBGC-insured multiemployer plans is $2.60 per participant per plan year.

When must premiums be filed?

All plans must file the Annual Premium Payment Form (Form 1) and make premium payments by the 15th day of the eighth full calendar month following the month in which the plan year began ("Final Filing Due Date"). In addition, large plans (that is, those required to report 500 or more participants on the preceding year's Form 1) must file the Estimated Premium Payment Form (Form 1-ES) and pay the estimated premium by the last day of the second full calendar month following the close of the preceding plan year ("First Filing Due Date").

Following is a general table of due dates for Form 1-ES and Form 1. A due date that falls on a weekend or federal holiday is extended to the next regular business day. See the instructions for Form 1-ES due dates applicable to a plan that does not begin on the first of a month.

Plan Year Begins	First Filing Due Date	Final Filing Due Date
January 1	February 28	September 15
February 1	March 31	October 15
March 1	April 30	November 15
April 1	May 31	December 15
May 1	June 30	January 15
June 1	July 31	February 15
July 1	August 31	March 15
August 1	September 30	April 15
September 1	October 31	May 15
October 1	November 30	June 15
November 1	December 31	July 15
December 1	January 31	August 15

For example, if a plan has a plan year beginning January 1st and the plan was required to report 1,000 participants on its 1998 Form 1, the Form 1-ES for the 1999 plan year must be filed by 3/1/99 (because 2/28/99 falls on a Sunday) while the Form 1 filing due date is 9/15/99. Large plans pay only the flat-rate premium by the First Filing Due Date, and may pay an estimate if the actual amount is not yet known. The variable-rate premium is due by the Final Filing Due Date. All large plans that pay an estimate by the First Filing Due Date must make a reconciliation filing using the Form 1 by the Final Filing Due Date, even if they owe no additional premiums. Small plans (that is, those required to report fewer than 500 participants on the preceding year's Form 1), new, and newly covered plans do not have to file a Form 1-ES. Instead, they file their Form 1 and pay the entire premium due by the Final Filing Due Date. See Part C in the Premium Payment Package for a full list of the Form 1-ES and Form 1 filing due dates and for other filing due date information.

Who must file premiums?

The plan administrator of each PBGC-insured single employer plan and multiemployer plan is required annually to file the Form 1 and, if applicable, Form 1-ES and pay the premium due. PBGC- insures most private-sector defined benefit pension plans in accordance with Section 4021 of ERISA. If you are uncertain whether your plan is covered, you should promptly request a coverage determination by calling our customer service representatives for coverage issues at 202/326-4000 or writing to PBGC, Technical Assistance Branch, Suite 930, 1200 K Street NW, Washington, DC 20005-4026. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. A request for a coverage determination does not extend the due date for any premium that is finally determined to be due. If PBGC determines that a plan is not covered, we will review the plan's premium payments to determine whether any refunds may be made.

Where should premium forms and payments be sent?

It is very important that the premium forms and payments be sent to the right place. If you are unsure of where to send your form and payment, please contact PBGC for clarification (visit the PBGC website: http://www.pbgc.gov/faqprem.htm for the telephone numbers and addresses of PBGC's customer service representatives).

Send premium forms to:
Pension Benefit Guarantee Corporation
P.O. Box 64880
Baltimore, MD 21264-4880

If you pay by check, send the check with the premium form. Write the plan's EIN/PN, and the date the premium payment year began, on the check.

If you pay by wire transfer, send the wire transfer to:
First National Bank of Maryland Baltimore, Maryland
ABA: #052000113
Account: #425-5265-5
Beneficiary: PBGC
Reference: (give plan's EIN/PN and date the premium payment year began)

Where should inquiries be directed?

For premium-related inquiries and requests (e.g., requests for premium filing forms, premium booklets, premium refunds, reconsideration of premium penalty assessments, questions about Statements of Account and Past Due Filing Notices, or other premium filing matters):

Call 202-326-4242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number listed above (202-326-4242).

Write:
Pension Benefit Guarantee Corporation
P.O. Box 64916
Baltimore, MD 21264-4916

See PBGC's FAQs on Plan Terminations: http://www.pbgc.gov/FAQTERM.HTM for the appropriate telephone number and address for plan termination and coverage inquiries and requests, including questions about the Missing Participants Program.

When should I call the Premium Problem Resolution Officer?

If you have premium questions, problems or requests, you should first call our premium payer customer service representatives (202-326-4242), who have access to the information needed to respond to your inquiry or request. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. If you still need assistance afterward or if you have a complaint about the service you have received, please contact the Premium Problem Resolution Officer at 202-326-4136 or via E-mail at mailto:premiums.pro@pbgc.gov. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. If you prefer to write, send your letter to:

Pension Benefit Guarantee Corporation
Problem Resolution Officer (Premiums)
1200 K Street NW, Suite 670
Washington, DC 20005-4026

Does an IRS Extension for Form 5500 extend my PBGC premium filing due date?

No. An extension granted a plan by the Internal Revenue Service for filing the Form 5500 series does not extend the filing due date for the PBGC Form 1 premium filing. The Form 1 may be prepared using data expected to be reported on the Form 5500 (including Schedule B). If the data subsequently reported on the Form 5500 differ from those used on your premium filing, an amended premium filing must be submitted with the revised data.

Why are Statements of Account and Past Due Filing Notices issued?

Statements of Account (SOA) are issued for premium, penalty, and interest amounts owed to PBGC as a result of late payment or underpayment of premiums. To ensure that the amount due does not increase, the premium and interest must be paid within 30 days of the SOA's issue date. If the SOA appears to be in error, contact our premium payer customer service representatives (202-326-4242). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. In some cases, it may be necessary to submit an amended filing to clear up the problem that caused the erroneous SOA to be issued.

Past Due Filing Notices are issued when PBGC's records indicate that a plan's premium filing form is missing for a particular plan year. If the Past Due Filing Notice appears to be in error (e.g., the premium filing was made or the EIN/PN is incorrect), contact our premium payer customer service representatives (202-326-4242). Please see the preceding paragraph for the TTY/TDD telephone number. It may be necessary to submit an amended filing to correct the error. For issues involving a plan's termination, you may be referred to PBGC's customer service representatives for plan termination issues (202-326-4000). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. Premium and interest cannot be waived. Late payment penalties may be waived depending on the facts and circumstances (see the answer to Question 12 for details on waiver requests).

How are penalty and interest computed on Statements of Account?

For filings for plan years beginning before 1996, a late payment penalty of 5% of the unpaid premium is assessed each month (or portion of a month) the amount remains outstanding, subject to a minimum of $25 and a maximum of 100% of the unpaid premium. Starting with filings for the 1996 plan year, the late payment penalty charge is lower for premium underpayments that are self-corrected. The penalty rate is 1% of the late premium payment for each month overdue if the late payment is made on or before the date when PBGC first issues a written notification indicating that there is or may be a premium delinquency (e.g., a Statement of Account (SOA), Past Due Filing Notice, or letter initiating an audit). The normal penalty rate of 5% per month applies to under-payments not self-corrected. The same minimum and maximum rules apply in either case as for pre-1996 plan years.

Interest charges are assessed for any premium amount not paid when due, whether because of a late filing, a low estimated participant count, an erroneous participant count, or some other mistake in computing the premium owed. If interest is charged, it must be paid within 30 days of the SOA's issue date or it will continue to accrue. (Interest will also continue to accrue if any portion of the premium remains unpaid.) The interest rate charged is established on a quarterly basis and the interest rates are published on or about the 15th of January, April, July, and October in the Federal Register. These interest rates: http://www.pbgc.gov/plan_admin/interest.htm are also posted on PBGC's World Wide Web site. Interest is compounded daily.

Why is there an interest charge for underpayment or late payment of estimated premiums?

Our regulations require a large plan to pay the full final amount of its flat-rate premium by the end of the second month of the plan year - not an estimate. We accept an estimate because we realize that plans may not know the final amount by the early filing date. For the same reason, we waive the underpayment penalty if a plan meets certain safe harbor requirements - payment by the end of the second month of the plan year of either (1) 90% of the flat rate portion due for the current plan year or (2) 100% of the flat-rate portion that would be due using the previous plan year's participant count and payment by the reconciliation filing date of 100% of the flat rate portion. PBGC has no authority to waive interest on premium amounts not timely paid, so we must charge interest on any shortfall from the full amount due even if the estimated payment meets the safe harbor requirements for relief from the penalty.

How do the request for penalty waiver and request for reconsideration processes work?

The process typically begins after the receipt of a Statement of Account (SOA). If you believe that the Statement of Account resulted from an error, call our premium payer customer service representatives at 202-326-4242 to resolve the error. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. If this does not resolve the matter to your satisfaction, you may request a waiver of the penalty charge by sending your written request to:

Pension Benefit Guarantee Corporation
P.O. Box 64916
Baltimore, MD 21264-4916

PBGC has no authority to waive premium and interest charges.

You should document the reasons for requesting a waiver of penalty. PBGC will consider the facts and circumstances and send the plan administrator a written response, generally within 90 days after the request. If the penalty waiver request is denied, you may request reconsideration of PBGC's initial determination to deny the request for waiver of the penalty. PBGC will consider the request for reconsideration independently and will respond to you in writing. This response will be the agency's final determination on the matter.

If I have overpaid my premium, can I take a credit versus a refund?

When you have overpaid your premium (for example, the participant count reported on your final premium filing is lower than that reported on your estimated filing), you have the option of taking a credit on a subsequent year's premium filing form or requesting a refund. Refunds are made by wire transfer to the premium payer's account. You can request a refund by providing the wire transfer information for the refund on the Form 1 or by submitting a separate written request including the wire transfer information. (If you are requesting a refund on an amended filing for a pre-1998 plan year, you may check the refund box on the Form 1 and write in the wire transfer information or include it in an attachment to the amended filing.) Whether you choose a credit or a refund, the overpayment first must be applied toward any premium, penalty, and interest that are owed for the current or any prior plan year. This may result in less of an overpayment available for a refund or credit. If you are unsure as to whether any premium, penalty and interest amounts are owed (for example, because of interest charges due to an increase in participant count), contact our premium payer customer service representatives (202-326-4242) to determine whether the overpayment is fully available for a refund or a credit. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence.

How are refunds issued? What action should be taken if the plan did not receive a requested refund?

If PBGC determines that a requested refund is due, the plan administrator will receive a letter from PBGC confirming that the refund will be forthcoming. Included with this letter will be an account history describing how the overpayment was used to satisfy any outstanding premium, interest, or penalty amounts. The refund will subsequently be issued by the U.S. Treasury via electronic wire to the bank you designate (based on the bank routing number and bank account number included with your request for a refund). If you have not received the refund within 60 days after you receive the PBGC refund letter, contact PBGC's premium payer customer service representatives (202-326-4242). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence.

Why did I receive less than the amount of the refund that I requested or no refund at all even though I overpaid my premium?

Overpayments are refunded only if there are funds remaining after all outstanding premium, penalty, and interest charges are first satisfied. Refund-related questions should be directed to our premium payer customer service representatives at 202-326-4242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence.

Are there refunds available for overlapping premium payments resulting from a plan merger, consolidation, or spinoff?

In some of these situations, there can be overlapping premiums, but in others there can be gaps in premiums. Refunds are not available for overlapping premium payments resulting from a plan merger, consolidation or spinoff (nor does PBGC charge for any gaps that may result). Refunds may be available, however, for the following short plan year situations: plans filing for the first time, plans that have changed their plan years, and plans that have been terminated. See Parts B & C of the Premium Payment Package for more details.

What are the premium payment rules regarding terminating plans and why are payment notices sometimes sent to terminated plans?

Why do I continue to receive premium filing booklets for my terminated plan and how do I stop this mailing?

Terminated plans may still owe premiums, as described in the answer to Question 17, and, therefore, may still receive premium filing booklets for this purpose. If, however, you believe no further premiums are due for your plan, contact PBGC's premium payer customer service representatives (202-326-4242). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. If there are no further premiums due for the plan, the booklet mailing will stop with the following year's mailing.

How can I ensure that my premium filings and payments are submitted on time?

To ensure the accurate and timely posting of your payment, you must make a separate payment for each filing. If you pay by check, write the plan's EIN/PN, and the date the premium payment year began, on the check. If you pay by wire transfer, include the plan's EIN/PN, and the date the premium payment year began, in the wire transfer instructions. It is also important that the premium filing be mailed to the correct lockbox address. All premium filings for current or prior plan years must be mailed to the lockbox address currently in effect. The current premium filing address is:

Pension Benefit Guarantee Corporation
P.O. Box 64880
Baltimore, MD 21264-4880

PBGC considers that you filed your premium filing on the date the envelope is postmarked by the United States Postal Service. We will disregard any private postage meter date. If the envelope does not have a legible Postal Service postmark, we will consider that you filed the form three days before we received it.

Social Security Info

Social Security Admininstration's "Work Site: A summary guide to employment support for individuals." The Red Book: http://www.ssa.gov/work/ResourcesToolkit/redbook.html

BenefitsLink

Helps employers stay informed of the latest employee benefit plans - know the competition. http://benefitslink.com/index.html

Pension Benefit Guaranty Corporation (PBGC)

PBGC provides businesses with a Small Business Guide: http://www.pbgc.gov/

PBGC's Small Business Guide

Pension Benefit Guarantee Corporation's small business guide: http://www.pbgc.gov/publications/SMBUS.htm

Department of Labor's Employee Benefits Security Administration

DOL's employee benefits security administration with useful information for retirement plans, benefits, and savings: http://www.dol.gov/ebsa/

Retirement Plans, Benefits, and Savings

Department of Labor's page on retirement plans, benefits, and savings. http://www.dol.gov/dol/topic/retirement/index.htm

Calculate Commuter Choice Business Benefits

Provide valuable commuter benefits to your employees. http://www.commuterchoice.gov/

Internal Revenue Service's Retirement Plans for Small Business

IRS' page on small business' retirement plans: http://www.irs.gov/retirement/content/0,,id=97203,00.html

Keogh Plans and 401(k) Plans

IRS' page detailing Keogh and 401(k) plans: http://www.irs.gov/individuals/page/0,,id%3D14251,00.html

Simplified Employee Pensions

Department of Labor's page explaining what small businesses should know about simplified employee pensions. http://www.dol.gov/ebsa/Publications/simplified_employee_pensions.html

Source: http://www.business.gov/topics/employees/benefits/index.html