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IRS, PBGC Provide Relief to Wildfire Victims

By John Iekel • October 17, 2017 • 0 Comments

The IRS and the Pension Benefit Guaranty Corporation (PBGC) are providing relief from certain deadlines and requirements relevant to retirement plans for certain victims of the wildfires in California. Both agencies made their announcements on Oct. 13; however, the IRS has since added additional counties to those that its relief covers.

IRS Relief

The IRS in CA-2017-06 said that Form 5500 series returns that were required to be filed on or after Oct. 8, 2017, and before Jan. 31, 2018 can be filed by Jan. 31, 2018. This postponement is in accordance with Section 8 of Revenue Procedure 2007-56. Individuals who reside or have a business in Butte, Lake, Mendocino, Napa, Nevada, Orange, Solano, Sonoma and Yuba Counties may qualify for the relief.

PBGC Relief

The relief the PBGC is providing is specified in Disaster Relief Announcement Number 17-17 and applies to the areas covered by the IRS announcement CA-2017-06 — the California counties of Butte, Lake, Mendocino, Napa, Nevada, Orange, Solano, Sonoma and Yuba.

Persons Covered

The new relief applies to any “Designated Person,” defined as one who:

  • is responsible for meeting a PBGC deadline and is located in the disaster area for which the IRS in CA-2017-06 provides relief;

  • cannot reasonably obtain information or other assistance needed to meet the deadline from a service provider or bank; or

  • whose operations that began on Oct. 8, 2017 in areas of California directly affected by the wildfires.

Premiums

If the plan administrator of a plan is a Designated Person, the PBGC will, for purposes of assessing any late payment or late information penalty, treat as timely any premium filing required to be made for the plan beginning on or after Oct. 8, 2017, and on or before Jan. 31, 2018, if the filing is made by Jan. 31, 2018. Thus, for any such filing, PBGC will waive the applicable penalty, but not the applicable interest charge.

Reportable Event Notices

If a Designated Person is responsible for filing a reportable event post-event notice for which the deadline falls on or after Oct.8, 2017, and on or before Jan. 31, 2018, that person’s deadline for filing is extended to Jan. 31, 2018.

The PBGC’s regulation on post-event notices of reportable events extends the reporting deadline for an active participant reduction event due to attrition until the premium due date for the plan year following the one in which the event took place. If such an extension applies to a reportable event notice, and the premium due date for the plan year following the event year is extended because of a disaster, the extended due date for the reportable event notice is further extended until the extended premium due date.

In the case of notices required in advance of the effective date of a reportable event, PBGC will grant relief where appropriate on a case-by-case basis.

Annual Employer Reporting

The PBGC will grant relief where appropriate on a case-by-case basis for annual financial and actuarial information reports in certain cases.

The PBGC’s regulation on Annual Financial and Actuarial Information Reporting permits the filing of certain actuarial information by an alternative due date, which is 15 days after a plan’s Form 5500 due date, if certain requirements are met. If such an alternative due date is based on a Form 5500 for which there is a Form 5500 disaster extension, the 15-day period in PBGC’s regulation will automatically be measured from the Form 5500 disaster extension date.

Requests for Reconsideration or Appeals

The deadline for requesting review of a PBGC determination under PBGC’s regulation on Rules for Administrative Review of Agency Decisions is generally 45 days (for an appeal) or 30 days (for a request for reconsideration) after the date of the determination. If a Designated Person is aggrieved by a PBGC determination, and the deadline for filing an appeal or a request for reconsideration of the determination falls on or after Oct. 8, 2017, and on or before Jan. 31, 2018, that person’s deadline for filing the appeal or request for reconsideration is extended to Jan. 31, 2018.

Claiming Disaster Relief

To claim disaster relief, follow the instructions (if any) for claiming disaster relief for the filing. If there are no instructions for claiming disaster relief for the filing, then for any permitted paper filing (including a paper filing that is sent via fax or as an imaged attachment to an e-mail), include the words “Disaster Relief Announcement 17-17” at the top of the filing. If a person receives an inquiry or bill from PBGC that appears not to take disaster relief into account, the inquiry or bill should be returned to PBGC with the same wording written at the top.

Single-Employer Plan Terminations

Standard terminations. If the plan administrator of a plan that is terminating in a standard termination is a Designated Person, any of the following plan termination deadlines for the plan that fall on or after Oct. 8, 2017, and on or before Jan. 31, 2018, are extended to Jan. 31, 2018:

  • The deadline for filing the standard termination notice (Form 500) (29 CFR § 4041.25(a) l)). (This automatically extends the deadline for providing notices of plan benefits to participants and beneficiaries (29 CFR § 4041.24(a)) because that deadline is the date when the standard termination notice is filed.)


  • The deadline for filing the post-distribution certification (Form 501) without penalty (29 CFR § 4041.29(b)). (This automatically extends the deadline for filing missing participant information and certifications without penalty and for paying missing participants’ designated benefits to PBGC without interest.) (29 CFR § 4050.6(b)(2)).  

Distress terminations. If the plan administrator of a plan that is terminating in a distress termination is a Designated Person and the deadline for filing the distress termination notice (Form 601) (29 CFR § 4041.45(a)) falls on or after Oct. 8, 2017, and on or before Jan. 31, 2018, that deadline is extended to Jan. 31, 2018.

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