Late Notice of Plan Benefits

[J. Bringhurst]

We just discovered that a client untimely distributed one Notice of Plan Benefits for its terminated defined benefit plan. I have found information on the PBGC's penalty policy and notice of noncompliance, but cannot seem to locate information on how to report the delay...is there some kind of program that we can enter to pay the penalty or is this just something that we have to wait for them to discover on audit?

[John Feldt ERPA CPC QPA]

One notice was late for one participant, or all NOPBs were late to all participants?

In my opinion, if you just missed one person's NOPB, then read the PBGC Form 500 instructions, section G under "Correction of Errors", page 13 of the link below. I think this indicates that you are okay if 1) you acted in good faith and 2) that you corrected it no later than the latest date an election notice may be provided and 3) the delay did not substantially harm the person.

See page 13: http://www.pbgc.gov/docs/500_instructions.pdf

[J. Bringhurst]

Thank you. This seems to be a correction for a good faith error rather than a correction for a failure to meet one of the statutory deadlines (i.e., the instructions discuss the penalties involved with a failure to meet various deadlines). In either case, I just don't see the method for apprising the PBGC of the issue and obtaining their blessing...other than their discovery of the error on audit. The client really wants to do the right thing and would be willing to pay the penalty (at this point, the notice is not prohibitively late). Hmmm...