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

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 postdistribution 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 postdistribution 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]

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