Small Business Regulatory

Enforcement Fairness Act 

(SBREFA)

Compliance Report

March 17, 2020
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Pension Benefit Guaranty Corporation

Small Business Regulatory Enforcement Fairness Act (SBREFA) 

Compliance Report

March 17, 2020

PBGC consistently receives “A” ratings from the U.S. Small Business Administration (SBA), 

Office of the National Ombudsman, on the Corporation’s compliance with SBREFA. The Office 

of the National Ombudsman rates federal agencies annually and publishes those ratings in the 

Ombudsman’s reports to Congress.0F

1

PBGC demonstrates compliance with SBREFA in the following ways:

1. Penalty Reduction Policies and Programs

Section 223 of SBREFA provides that each agency regulating the activities of small entities 

establish a policy or program to provide for the reduction, and under appropriate circumstances 

for the waiver, of civil penalties for violations of a statutory or regulatory requirement by a small 

entity.

Late premium payment penalties — reductions. PBGC reduces penalties for late premium 

payments. This reduces burden, especially for small businesses with small administrative staff. 

PBGC’s regulation at 29 CFR 4007.8 cuts the penalty rate for late payment of a premium and 

provides a penalty waiver that applies to underpayments by plans with good compliance histories 

if corrected promptly after notice from PBGC. PBGC will waive 80 percent of the penalty 

assessed for such a plan.

Late premium payment penalties—reasonable cause waivers. PBGC’s premium penalty policy, 

Appendix to 29 CFR part 4007, considers the size of an organization in determining whether 

“reasonable cause” exists for a penalty waiver. The policy states:

“If an organization or one or more of its employees is responsible for taking action, the

size of the organization may affect what ordinary business care and prudence would 

require. For example, ordinary business care and prudence would typically require a 

larger organization to establish more comprehensive backup procedures than a smaller 

organization for dealing with situations such as computer failure, the loss of important 

records, and the inability of an individual to carry out assigned responsibilities. Thus, 

there may be reasonable cause for a small organization’s failure to pay a premium in full 

and on time even though, if the organization were larger, the exercise of ordinary 

business care and prudence would have avoided the failure.”

1 See National Ombudsman’s Annual Reports to Congress, 2013-2017 https://www.sba.gov/document/report--

national-ombudsmans-annual-reports-congress.
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Failure to provide notices or other material information penalties—plan size considered. 

PBGC’s penalty policy statement for failure to file notices or other material information (60 FR 

36837), identifies the size of the plan among the facts and circumstances of each case that PBGC 

considers, assuring that the penalty fits the violation. The policy provides that in most cases, 

PBGC will increase penalties as the period of delinquency increases, reduce penalties for small 

plans, and limit total penalties based on plan size.

2. Regulatory Enforcement Fairness

Section 222 of SBREFA created the SBA’s Office of the National Ombudsman to work with 

agencies to ensure that small business concerns are addressed in regulatory compliance and 

enforcement activities, and that small businesses are made aware of their rights to comment to 

the SBA’s Ombudsman about agency compliance and enforcement activities without reprisal.

Small business non-retaliation policy. PBGC publicizes on its website the right of small entities 

to invoke their SBREFA rights under its Small Business Non-Retaliation Policy, “Reminder to 

Small Businesses: PBGC’s Non-Retaliation Policy and SBA’s Ombudsman Assistance.” The 

policy explains that PBGC is committed to maintaining an environment in which small 

businesses and others are free to question or complain about PBGC actions or policies without 

fear of retaliation. The policy also explains that the SBA’s Ombudsman is available to assist 

small entities with federal agency enforcement actions and compliance matters, and that small 

businesses may request expedited treatment of an enforcement action against them when they 

believe that delay may threaten the economic viability of the business. It includes information 

about PBGC’s compliance assistance through its Problem Resolution Officer (PRO) and 

provides contact information for PBGC’s PRO and the Office of the National Ombudsman. 

PBGC staff are reminded regularly how to direct small businesses to the non-retaliation policy 

and the SBA Ombudsman. The policy is disseminated to all PBGC employees via PBGC’s 

website, in staff training sessions, and by email directly to PBGC’s compliance and enforcement 

staff. The email emphasizes the importance of the non-retaliation policy, offers assistance with 

staff training, and includes a copy of PBGC’s response to the SBA Ombudsman’s Federal 

Agency Questionnaire as an attachment.

Notice of SBREFA rights. PBGC informs small entities of their SBREFA rights at the time it 

issues a final agency determination regarding a violation of PBGC’s premium payment 

requirements. The notice is in the form of an enclosure to the letter which transmits the final 

agency determination.

Regulatory Fairness Representative. Small businesses have direct access via a toll-free phone 

number and dedicated email address to PBGC’s “RegFair” Representative who also serves as the 

agency’s PRO for pension plan practitioners. As described in the Small Business NonRetaliation Policy, the PRO is available to provide compliance assistance, receive and respond to 

retaliation allegations by small businesses, and to assist with other types of concerns.
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3. Compliance Assistance

Section 212 of SBREFA requires agencies to publish a compliance guide with respect to each 

rule for which “an agency is required to prepare a final regulatory flexibility analysis.”1F

2

 A

regulatory flexibility analysis is required for any final rule for which a notice of proposed 

rulemaking is required unless “the head of the agency certifies that the rule will not, if 

promulgated, have a significant economic impact on a substantial number of small entities.” 

PBGC has not prepared a final regulatory flexibility analysis for any final rule because, for each 

rule for which a notice of proposed rulemaking is required, PBGC has certified that the rule will 

not have a significant economic impact on a substantial number of small entities. Therefore, the 

requirement to publish a compliance guide for small business under section 212 of SBREFA has 

not applied to PBGC’s rules.

However, PBGC considers very seriously the impact of its regulations and policies on small 

entities. PBGC designs its regulations and policies to anticipate and avoid compliance and 

enforcement issues for small entities as well as to provide relief from enforcement measures.

Consistent with section 213 of SBREFA regarding informal compliance assistance, wherever 

applicable, PBGC explains the impact of regulatory or policy changes on small entities.

Premium reductions and reporting waivers for small plans. PBGC considers small entities in its 

premium and reporting regulations by reducing premium amounts where possible and waiving 

reporting for small plans and employers.

• Reducing the amount of the variable rate premium (VRP). Plans of certain small 

employers (generally 25 or fewer employees) have the benefit of a “cap” on the VRP and 

are exempt from the requirements to compute and report VRP data.2F

3

 The predictability 

of the premium and the exemption from the reporting requirement simplify and reduce 

the burden on these small employers, particularly in view of the continued increase in 

premium rates in recent years. (Premium rates are set under ERISA.)

• Waiving “reportable events” notices. PBGC waives reporting for all small plans of 100 

or fewer participants of five reportable events (“extraordinary dividend or stock 

redemption, change in controlled group, active participant reduction, transfer of benefit 

liabilities, and missed quarterly contributions).3F

4

• Waiving annual financial and actuarial information reporting. “4010 reporting” for 

underfunded plans is waived for all controlled groups with fewer than 500 participants 

regardless of a plan’s underfunding.4F

5

 PBGC determined that it could provide reporting 

relief for smaller plans without compromising the pension insurance system.

Regulatory agenda planning and review. PBGC encourages public participation in the regulatory 

process and develops a regulatory and deregulatory agenda in accordance with applicable 

executive orders and the Regulatory Flexibility Act.5F

6

 As part of its regulatory planning and

review, PBGC has published Requests for Information (RFIs) in the Federal Register that solicit 

2 Section 604 of SBREFA

3 29 CFR 4006.5(b) 4 29 CFR 4043, subpart B.

5 29 CFR 4010.11

6 E.O. 12866, E.O. 13563, E.O. 13771
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public comment on its rules. PBGC’s 2017 RFI explains that PBGC’s regulatory agenda 

attempts to minimize administrative burdens on plans and participants, improve transparency, 

simplify filing, provide relief for small businesses, and assist plans to comply with applicable 

requirements. PBGC’s current efforts to reduce regulatory burden are in substantial part a 

response to public comments. To further encourage input, PBGC created a webpage, “Federal 

Register Notices Open for Comment,” that highlights when there are opportunities to comment 

on proposed rules, proposed forms and instructions, and other notices seeking comment. PBGC

encourages comments on an on-going basis in continuing to look for ways to further improve its 

regulations.

Several recent regulatory and deregulatory actions that will have a positive impact on small 

businesses include a Miscellaneous Corrections, Clarifications, and Improvements final rule that

came out of PBGC’s ongoing efforts to review the effectiveness and clarity of its rules. Key 

changes would eliminate a “4010 reporting” requirement and reduce possible duplicative 

reporting of a reportable event. PBGC also published two final rules that reduce valuation and 

reporting burdens for multiemployer plans and provide less burdensome requirements for small 

multiemployer plans (“Terminated and Insolvent Multiemployer Plans and Duties of Plan 

Sponsors”).6F

7

The “Mergers and Transfers Between Multiemployer Plans” final rule implements statutory 

procedures giving PBGC new authority to facilitate mergers for seriously underfunded 

multiemployer plans. Such mergers can improve plans’ ability to survive and continue paying 

participants’ benefits. Mergers may be particularly useful for small plans due to economies of 

scale. PBGC published a final rule on Missing Participants to expand its missing participants 

program to cover defined contribution plans and pension plans of small professional service 

employers. The program may be particularly helpful to small plans with limited resources by 

providing alternatives for dealing with the benefits of missing participants on plan termination. 

The rules also simplify and streamline current requirements.

Other compliance assistance.

• PBGC developed a one-page checklist, “Reportable Events Reference Sheet for Small Plans” 

to help small plans identify reportable events. 

• PBGC published “The Federal Pension Insurance Guide for Small Business,” which is 

intended to help sponsors and administrators of small plans comply with legal requirements.

• PBGC provides customer service assistance to pension plan administrators and plan 

professionals by e-mail or telephone (via a dedicated toll-free number). The practitioner 

“Contact Us” information is on the top right of every website page. PBGC extends the hours 

that customer service representatives are available (by both telephone and email) on and near 

the peak premium filing due date to handle the increased volume of calls from filers in order 

to help filers accurately and timely meet their obligations.

7 “Terminated and Insolvent Multiemployer Plans and Duties of Plan Sponsors,” 85 FR 18715, and “Multiemployer 

Plans; Electronic Filing Requirements,” 80 FR 55743.
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• PBGC offers a “Legal Inquiries” webpage, which provides contact information for PBGC’s 

Office of the General Counsel to contact PBGC attorneys for informal advice on legal issues 

pertaining to compliance, enforcement and other matters of concern.

• Participants and plan sponsors have direct access to PBGC’s Participant and Plan Sponsor 

Advocate. The Advocate’s office assists pension plan sponsors and participants in resolving 

disputes with PBGC, identifies potential legislative changes, and submits an annual report to 

Congress.

• PBGC offers auto email services to businesses to receive email alerts of updates on pension 

plan practitioner-related topics (“What’s New for Practitioners”) and to receive email filing 

reminders for the month(s) selected (“Practitioner Filing Reminders”).

• PBGC continues to improve its processes with our small business customers in mind. For 

example, PBGC sends acknowledgments for each premium filing received, which includes 

the results of processing the filings, such as the notification of any balance due or overpaid. 

In addition, PBGC communicates with businesses about best practices for submitting timely 

and accurate filings. For example, premium e-filing reminders are displayed in various 

places on the website, such as at the top of the premium e-filing login page and in the 

“Ongoing Reminders” section of the “Online Premium Filing With My PAA” webpage, and 

PBGC’s premium filing instructions contains a “What’s New” section highlighting changes 

from the previous year.

• PBGC provides compliance assistance and solicits feedback from small businesses and their 

advisers at professional conferences, through customer surveys, and by conducting focus 

groups (when appropriate). For example, PBGC staff regularly makes presentations to 

educate practitioners who serve small businesses at the annual Enrolled Actuaries Meeting, 

and meetings of the American Society of Enrolled Actuaries, among other practitioner 

groups that serve small pension plans.

• PBGC’s “Insurance Coverage” webpage provides helpful information to small businesses 

and others about pension plans that are not covered by PBGC, including “small professional 

service employer plans” and “substantial owner plans,” and how to request a coverage 

determination. The webpage links to a form intended to streamline and simplify the 

coverage determination process. The form’s instructions also explain that under a pilot 

program, small professional service employers and substantial owners may use the form to 

request an opinion letter about whether a plan in the process of being created is likely to be 

covered by PBGC.

• PBGC established on its website a single, searchable, indexed database of its guidance 

documents pursuant to E.O. 13891, “Promoting the Rule of Law Through Improved Agency 

Guidance Documents.” Small businesses, other employers, plan practitioners, and 

individuals can use the database to easily search for PBGC guidance documents, as defined 

in E.O. 13891.
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• PBGC offers procurement opportunities that target small businesses. The Procurement 

Opportunities webpage includes a section entitled “Opportunities for Small Businesses.” In 

addition, PBGC’s Director of Small and Disadvantaged Business Utilization is available to 

assist the small business community on procurement opportunities. Because of PBGC’s 

emphasis on small businesses procurement opportunities, the agency exceeded its 2018 small 

business goals.