ktrombino

I just found out from my actuary that one of my DB clients, with 45 participants owes a PBGC premium of over $34,000 for the 2023 plan year. This is basically due to the fact that the plan had a ~$458k (or 21%) loss during 2022, which resulted in the plan being severely underfunded by PBGC’s calculation of the VRP. Because of this massive loss, they have to pay 5.2% of the plans underfunding as of 12/31/2022, which was calculated at $571k. My question is - can the PBGC premiums be paid out of the plan assets? The investments have since rebounded and are almost back to where they were at the beginning of 2022. Thank you.

Are you including a form 2848 with each letter to the IRS relating to the individual denial letters? Or are you sending the blanket letters as if they were being sent by the plan sponsor? I have been getting signed 2848s from my clients before contacting the IRS but have only done so for about 5 of my 59 clients so far.

I just got off the phone with an IRS agent about my predicament. After faxing him proof of my mailing (Certified mail receipt dated 7/17/2022), sending him a signed 2848 and original 2848, he agrees that my client was sent a Notice CP216H in error and he will be sending out an apology letter soon. I asked about the other 58 forms from my package and he couldn't help me with those. He can only handle one 5500 filing per phone call. There needs to be a better way.

Mailed in 59 Form 5558s to the IRS for the 2021 plan year on July 22, 2022, certified mail return receipt. Now my clients are getting Notices CP216H indicating that they have denied the request for an extension of time because the request was not filed on or before the due date of the return. I have a copy of my Certified Mail receipt showing the package being mailed out on July 22, 2022. I cannot get through to the IRS on the phone "due to extreme call volumes" and I should try again tomorrow. Anyone else getting these denial letters? Should I resend the entire package again with all 59 forms ?

I do believe that the maximum Compensation limit for the year of $305,000 will need to be pro-rated for the short plan year period. If it is a non-Safe Harbor plan, this could effect the results of your testing.

Thank you!

Would an LLC, with 4 employees be covered by the PBGC if they are not a professional group but the employees consist of the owner, his spouse and their two grown sons over the age of 21? Thanks for any help with this.

The letters we received indicated that they are denying our request for an extension of time. It goes on to say that "We can't approve your request because you didn't file your request on or before the due date of the return." We mailed out all of our extensions on 07/29/2020 certified mail. Not sure if people are receiving these letters?

We also received letters for 4 of our clients and one for our own plan. Tried calling the IRS but the recorded message said that they are experiencing very high volume and that i should try again tomorrow.

Thank you both for your input.

I have a plan where two 19 year old employees were automatically enrolled in the plan on February 1, 2020. The eligibility age is 21. They were both just terminated due to COVID 19 related matters. Their account balances are less than the total amount of employee deferrals contributed to date. What sort of correction would need to be made?