[Federal Register Volume 62, Number 50 (Friday, March 14, 1997)]
[Rules and Regulations]
[Page 12521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6499]



  Federal Register / Vol. 62, No. 50 / Friday, March 14, 1997 / Rules 
and Regulations  

[[Page 12521]]



PENSION BENEFIT GUARANTY CORPORATION

29 CFR Part 4041


Assessment of Penalties for Failure to Provide Required 
Information

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Statement of policy.

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SUMMARY: In order to provide penalty relief, the Pension Benefit 
Guaranty Corporation is announcing a new penalty policy. Under the new 
policy, the PBGC will not assess a penalty if a post-distribution 
certification is filed within 90 days after the deadline for completing 
distributions. Plan administrators are required to file these 
certifications in standard terminations and in sufficient distress 
terminations.

DATES: The revised policy takes effect on March 14, 1997 with respect 
to any matter for which a notice of final penalty assessment has not 
been issued as of that date.

FOR FURTHER INFORMATION CONTACT: Harold J. Ashner, Assistant General 
Counsel, Office of the General Counsel, or Catherine B. Klion, 
Attorney, Pension Benefit Guaranty Corporation, 1200 K Street, NW., 
Washington, DC 20005-4026; 202-326-4024 (202-326-4179 for TTY and TDD).

SUPPLEMENTARY INFORMATION: Under the Employee Retirement Income 
Security Act of 1974, a plan administrator must file a post-
distribution certification with the PBGC within 30 days after the final 
distribution of assets (other than excess assets) in a standard 
termination or in a distress termination in which the plan is 
sufficient for at least guaranteed benefits. Practitioners have 
expressed concerns to the PBGC about their difficulties in meeting this 
certification deadline. In many cases, the plan administrator is not 
the person who distributes assets and thus may not know when the final 
distribution is made.
    Failure to file a post-distribution certification on time may 
result in assessment of a penalty under section 4071 of ERISA. In 
addition, a late certification may result in the loss of (1) part or 
all of the plan's premium refund for its final short plan year (see 29 
CFR 4006.5(f)(3)), and (2) the 30-day (or, in the case of a recently 
missing participant, 120-day) interest-free grace period for late 
payment of a designated benefit for a missing participant (see 29 CFR 
4050.6).
    Elsewhere in today's Federal Register, the PBGC is proposing a 
number of revisions to its termination regulation that, among other 
things, address the above concerns. Under the proposed rule, the PBGC 
will assess a penalty for a late post-distribution certification only 
to the extent the certification is filed more than 90 days after the 
distribution deadline (including extensions).
    For example, if the distribution deadline is March 1, and the final 
distribution of assets is made January 15, the post-distribution 
certification is due February 14 (before the distribution deadline). 
Under the proposed rule, the PBGC will not assess a penalty for a late 
post-distribution certification if the certification is filed by May 30 
(90 days after March 1). If the certification is filed May 31, the PBGC 
will treat the filing as being only one day late for penalty assessment 
purposes.
    The proposed rule provides the same penalty relief for the late 
filing of certain information under the missing participants program 
(see 29 CFR 4050.6(a)). It also eliminates the reduction resulting from 
a late post-distribution certification in the premium refund for a 
short plan year and waives interest for late payment of a missing 
participant's designated benefit throughout the period in which the 
post-distribution certification may be filed without penalty.
    Effective immediately, the PBGC is implementing a policy under 
which it will apply the above rules regarding penalties for late filing 
of a post-distribution certification and other information. Pending the 
completion of the rulemaking on the PBGC's termination regulation, the 
provisions in the existing regulation regarding premium refunds for a 
short plan year and interest for late payment of a missing 
participant's designated benefit remain in effect.
    The PBGC will continue to apply the penalty and reasonable cause 
guidelines and procedural requirements referred to in its July 18, 
1995, policy statement.

    Issued in Washington, DC, this 11th day of March, 1997.
John Seal,
Acting Executive Director, Pension Benefit Guaranty Corporation.
[FR Doc. 97-6499 Filed 3-13-97; 8:45 am]
BILLING CODE 7708-01-P