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U.S. Master™ Pension Guide, 2009 Edition
Revised for 2009 to include relevant provisions of the Heroes Earnings Assistance Relief Tax (HEART) Act and the Emergency Economic Stabilization Act.
The PBGC is waiving filing requirements under ERISA §4010 in certain cases for controlled groups with aggregate plan underfunding of $15 million or less for information years beginning in 2008.
The Pension Protection Act of 2006 (PPA; P.L. 109-280) amended the standards for annual reporting for controlled groups under ERISA §4010 by requiring reporting if the funding target attainment percentage of any plan maintained by the contributing sponsor or a member of its controlled group is less than 80 percent. In February 2008, the PBGC issued proposed regulations to implement the changes made by PPA. Among other things, parties that would be required to file solely because one or more plans have a funding target attainment percentage of less than 80 percent would qualify for a waiver of reporting requirements if the aggregate underfunding for plans sponsored by members of the filer’s controlled group was less than $15 million.
Rules for waiver
The PBGC expects to issue final regulations concerning ERISA §4010 in early 2009. Pending issuance of those regulations, the PBGC is implementing the $15 million waiver for information years beginning in 2008 so that potential filers can make informed decisions about elections to waive carryover balances, which for many plans are due by year end. Therefore, effective for information years beginning in 2008, reporting under ERISA §4010 is waived for a party that would be a filer but for the waiver if, for the plan year ending within the information year, the aggregate funding shortfall for all plans (including any exempt plans) maintained by the party’s controlled group (disregarding those plans with no funding shortfall) does not exceed $15 million. For these purposes, a plan’s ERISA §4010 funding shortfall is determined in the way described in the proposed regulations. Generally, a plan’s ERISA §4010 funding shortfall for a plan year equals the shortfall under ERISA §303(c)(4) determined as of the valuation date for the plan year, except that the value of plan assets is determined without regard to the credit balance reduction under ERISA §303(f)(4)(B).
The waiver does not apply if: (1) any member of the controlled group fails to make a required installment or other required payment to a plan and, as a result, the conditions for imposition of a lien described in ERISA §303(k) and Code Sec. 430(k) have been met during the information year, and the required installment or other required payment is not made within ten days of its due date; or (2) any plan maintained by a member of the controlled group has been granted one or more minimum funding waivers under ERISA §302(c) and Code Sec. 412(c) totaling in excess of $1 million, and as of the plan year ending within the information year, any portion of the waiver is outstanding.
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