On April 10, 2020, the Pension Benefit Guaranty Corporation (the “PBGC”) announced that deadlines for upcoming premium payments and certain other required filings due from April 1, 2020 through July 14, 2020 will be extended to July 15, 2020 as further described below.

The PBGC’s announcement came a day after the Internal Revenue Service (the “IRS”) issued Notice 2020-23, which extended certain deadlines, including for Form 5500 returns, to July 15, 2020 as a result of COVID-19. Under the PBGC’s disaster relief policy, when the IRS announces disaster relief that includes a filing extension for Form 5500 returns, the PBGC will generally grant relief that extends certain deadlines for the same geographic area and relief period. Importantly, the IRS Notice applies nationwide and without regard to whether the applicable person is directly impacted by COVID-19, so the PBGC’s relief is effectively available to all plan sponsors, administrators, and service providers.

Automatic Extensions

The PBGC’s relief automatically applies to the due date for any PBGC filing, payment, or other action (including PBGC premium filings and premium payments) other than the following filings and actions on the PBGC’s “Exceptions List”:

  • Notices of missed contributions over $1,000,000 (reported on Form 200);
  • Advance reportable event notices (reported on Form 10-Advance);
  • Post-event reportable event notices (reported on Form 10) for: (i) a failure to make required contributions under $1,000,000; (ii) an inability to pay benefits when due; (iii) a liquidation; (iv) a loan default; or (v) an insolvency or similar settlement; and
  • Actions related to distress terminations for which the PBGC has issued a distribution notice.

Note, however, that the Coronavirus Aid, Relief, and Economic Security Act extended the deadline for all required minimum contributions to tax-qualified defined benefit plans that would have otherwise been due in the 2020 calendar year to January 1, 2021. As a result, notices to the PBGC for missed required contributions in 2020 should not be required.

In order to take advantage of the relief for premium filings, the filer must notify the PBGC as part of its Comprehensive Premium Filing, but filers are also encouraged to notify the PBGC by email to premiums@pbgc.gov referencing:

  • IRS Notice 2020-23;
  • Identifying information for the plan (i.e., plan name, EIN, and plan number); and
  • The name and address of the affected filer.

For all other filings, the filer must notify the PBGC as soon as reasonably possible (and no later than the end of the relief period) by email to the address included in the instructions for the filing in question, and with the same information listed above.

Case-by-Case Extensions

For filings on the PBGC’s “Exceptions List,” the PBGC may grant relief on a case-by-case basis. Interested filers should follow the instructions for requesting a waiver or extension in the regulations or instructions for completing the filing in question or, if no such guidance is available, by contacting the PBGC as soon as reasonably possible by phone or email.

Key Considerations

The PBGC’s disaster relief policy provides some welcome relief for plan sponsors, administrators, and service providers during a time when many resources are stretched thin. The PBGC premium filing and payment extensions in particular may help some plan sponsors that are facing short-term liquidity issues in light of the current business environment. Plan sponsors planning to take advantage of the relief under this policy should provide timely notice to the PBGC and should be sure that the stakeholders and resources necessary to make the delayed filings are available prior to the July 15th deadline.

****

Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take, and resources to help manage ongoing operations.

Photo of Justin Alex Justin Alex

Justin S. Alex is a senior counsel and a member of the Employee Benefits & Executive Compensation Group.

Justin advises private and public companies on all aspects of their employee benefits and executive compensation arrangements and plans, including the treatment of such arrangements…

Justin S. Alex is a senior counsel and a member of the Employee Benefits & Executive Compensation Group.

Justin advises private and public companies on all aspects of their employee benefits and executive compensation arrangements and plans, including the treatment of such arrangements and plans in corporate financings and transactions.

In addition to Justin’s general benefits and compensation practice, he spends a significant portion of his time advising employers and financial sponsors with respect to underfunded single-employer and multiemployer pension plans. As part of this practice, Justin often works hand-in-hand with Proskauer’s labor and restructuring lawyers to find innovative and practical methods for clients to manage pension liabilities.

Prior to joining Proskauer, Justin was a lawyer in the Office of Chief Counsel at the Pension Benefit Guaranty Corporation (PBGC), where he gained significant experience with pension termination and underfunding issues. He also represented the PBGC in corporate bankruptcies and federal court litigation.