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# Effect of ARP on 4010 Reporting

October 15, 2021

This Technical Update 21-1 provides Pension Benefit Guaranty Corporation (PBGC) guidance on the effect of the American Rescue Plan Act of 2021 (ARP), Pub. L. No. 117-2 on annual financial and actuarial reporting under section 4010 of ERISA and part 4010 of PBGC’s regulations.

This Technical Update waives 4010 reporting requirements in situations where the reporting obligation is triggered solely because of a retroactive election permitted by ARP and IRS Notice 2021-48. It also provides guidance with respect to actuarial information reported in a 4010 filing that changes because of ARP.

**Background**

Section 4010 of ERISA requires certain underfunded single-employer plans to report identifying, financial and actuarial information to PBGC. In general, this reporting is required if one or more plans sponsored by a member of the controlled group had a funding target attainment percentage, determined without regard to the interest rate stabilization rules (“4010 FTAP”), below 80%1

ARP modified the funding rules for single-employer plans as follows:
                          - Section 9705 of ARP extended the amortization period for shortfall amortization bases for plan years beginning after December 31, 2021 (or, at the election of the plan sponsor, plan years beginning after December 31, 2018, December 31, 2019, or December 31, 2020).
                          - Section 9706 of ARP modified the way stabilized discount rates are determined. In general, the discount rate changes are effective for plan years beginning after December 31, 2019, but plan sponsors may elect a later effective date.

As a result of certain ARP-related elections that can be made by the plan sponsor, it is possible that a plan’s 4010 FTAP for 2020 may retroactively drop below 80% which could trigger a retroactive 4010 filing requirement2. In addition, with respect to already submitted 4010 filings, it is possible that ARP-related elections could result in a change to already reported actuarial information.

**Waiver**

Section 4010.11(d) gives PBGC the authority to waive requirements to submit information with respect to one or more filers or plans. Under that authority, the requirement to submit a 4010 filing for an information year ending before December 31, 2021 is waived if such filing would not have been required absent the enactment of ARP and an employer election to increase the prefunding balance (in accordance with Section V. A. of IRS Notice 2021-48).

**No need to amend to 4010 filings to reflect ARP-related changes**

If a 4010 filing contains actuarial information that subsequently changes, ordinarily the filing would need to be amended. PBGC appreciates that it would be unduly burdensome to require such amendments to the extent the changes are solely the result of ARP. Therefore, if any actuarial information reported as part of a 4010 filing changes because of ARP, the filing does not need to be amended to revise such information. This is the case regardless of whether that actuarial information was reported in Section III of Schedule P or in the required actuarial valuation report (AVR) attachment.

**4010 filings submitted before actuarial valuation report is available3**

If, in accordance with §4010.8(b) of PBGC’s regulation, a filer plans to submit the AVR after the regular 4010 filing due date and on or before the alternative AVR due date provided in §4010.10(b) of PBGC’s regulation, when it comes time to submit the AVR:
                          - If an AVR reflecting ARP elections is available, submit that AVR.
                          - If the sponsor has not yet made decisions about various elections that could affect the information included in the AVR, or if such elections have been made but a post-ARP AVR is not yet available, submit an AVR based on pre-ARP law.

**Reservation of right to request revised actuarial information**

PBGC reserves the right to request that a filer submit revised actuarial information reflecting any ARP-related changes, in the event PBGC decides it needs that information for its monitoring and enforcement activities.  If PBGC requests such information, it will provide sufficient time to comply with the request.

**Other Effect**

This Technical Update supplements the guidance provided in the instructions to the e-4010 module of PBGC’s e-filing portal. It has no effect on any other requirement under 29 CFR part 4010.

This guidance represents PBGC's current thinking on this topic. It does not create or confer any rights for or on any person or operate to bind the public. If an alternative approach satisfies the requirements of the applicable statutes and regulations, you can use that approach. If you want to discuss an alternative approach (which you are not required to do), you may contact the PBGC.

**Contact Information**

If you have any questions about this reporting relief, contact Ellen Itkin of the Negotiations and Restructuring Actuarial Division at 202-229-3075 or send an email to ERISA.4010@pbgc.gov.

 

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[1]  PBGC waives this requirement in certain situations.  See §4010.11 of PBGC’s regulation.[2] For calendar year 4010 filers, the 2020 filing was due April 15, 2021.[3] Under PBGC's regulations, the actuarial valuation report (AVR) is submitted as an attachment to the filing.  However, if that report is not available when the 4010 filing is due, the filer may, subject to certain requirements, submit the 4010 filing without the AVR and submit the AVR at a later date, but no later than 15 days after the plan's Form 5500 is due.