PBGC Funding Notice

[Effen]

I have a new client who was required to provide the 2006 PBGC Participant Notice, but whose previous service provider (insert large national firm here) neglected to tell them about the requirement. I spoke to the previous provider and they agreed that one should have been done. So, I have prepared the notice for the client and told them to issue it ASAP.

My question relates to the 2007 PBGC filing. As you know there is a question asking about the previous year's participant notice requirement. There are only 3 possible answers to the question. 1) Was not required to be issued, 2) Was issued on time and in accordance with all other applicable requirements, or 3) An explanation is provided here.

I plan on selecting Option 3 and providing an explanation, but I am wondering how the PBGC will react. I know there is a potential $1,100 per day fine, but I can't believe they would actually asses it. Has anyone ever selected Option 3? If so, how did the PBGC react?