Gray Book Reliance and the PBGC

[AndyH]

I have an opportunity to reduce a PBGC variable premium for a client by $30,000+ by recharacterizing quarterly contributions for the next year as for the prior year. Because I have a receivable not paid until the due date for the prior (premium year), this would cause the quarterly contributions to be considered missed, and because the amounts are high, result in an overdue filing of PBGC Form 200 by five months. Form 200 says the PBGC can assess penalties of up to $1,100 per day.

PBGC Q&A 13 from the EA meeting addresses this exact situation and says they would not assess penalties in this situation as long as Form 200 were filed within 10 days of the Schedule B filing date (due 4/15).

The intro to the Q&A says that the answers to these questions cannot be relied upon by any person for any reason. Hmmm. What value does that answer have?

Opinions? Obviously I'm going to point out the positives and negatives to the client and let them decide.

But what do you think?

[david rigby]

Opinion: point out the positives and negatives, just as you recommend.

Minor point. Technically, the reference is to the Blue Book, 2004 edition. Andy has the correct Q&A.

[AndyH]

Thanks for the feedback, pax. And you're right about the color of course, but mine are both xeroxes so I could call them gray or black and white.

I didn't attend the conference, but someone from my office who did said that finding ways to reduce PBGC premiums was a popular topic.