PBGC Filing in Year of Termination

[JBones]

A client terminated their PBGC covered cash balance plan effective 7-1-09. The client informed us that all distributions occured prior to 12-31-09 and provided copies of the checks. Forms 1099R were prepared for the distributions for 2009. While completing Form 501, the client informed us that the last check was actually cashed on 2-4-2010. The owner had held onto his distribution check, made a deposit to the plan in 2010 to fully fund his benefit and cashed his check at that time. We certified on Form 501 that the last distribution date was 2-4-10.

1- I am preparing the 2009 PBGC filing. For my participant count at 12-31-2009, do I need to determine the number of participants whose checks hadn't cleared and use that as my count or can I say that there were no participants who whom the plan had a liability on that date because the checks written were an accrued distribution?

2- Would this be the PBGC final filing for the plan? The form asks for the date of the event that ceases the filing obligation. I would either have to enter 2-4-10, which is after the filing year, or the date the last check was written, which wouldn't coincide with the date certified on the Form 501.

3- Can I file a final 5500 for 2009 or will I have to file a 2010?

[JBones]

I emailed PBGC and they informed me that the plan "would be considered to have made the distributions therefore eliminating benefit liabilities. . .The fact that the checks were not timely cashed is a mute point."

At least now I have their opinion in writing.

[Guest jmrodrig]

A client terminated their PBGC covered cash balance plan effective 7-1-09. The client informed us that all distributions occured prior to 12-31-09 and provided copies of the checks. Forms 1099R were prepared for the distributions for 2009. While completing Form 501, the client informed us that the last check was actually cashed on 2-4-2010. The owner had held onto his distribution check, made a deposit to the plan in 2010 to fully fund his benefit and cashed his check at that time. We certified on Form 501 that the last distribution date was 2-4-10.

1- I am preparing the 2009 PBGC filing. For my participant count at 12-31-2009, do I need to determine the number of participants whose checks hadn't cleared and use that as my count or can I say that there were no participants who whom the plan had a liability on that date because the checks written were an accrued distribution?

2- Would this be the PBGC final filing for the plan? The form asks for the date of the event that ceases the filing obligation. I would either have to enter 2-4-10, which is after the filing year, or the date the last check was written, which wouldn't coincide with the date certified on the Form 501.

3- Can I file a final 5500 for 2009 or will I have to file a 2010?

I must say, I had a similar situation and here is a tip.

In my case, after assets were fully distributed and the trust read zero, the client put up a fuss about paying a premium for a plan that no longer needed "insurance". The plan distrubuted all assets on 12/30/2008.

We made a call in to the PBGC and discussed the possibility of getting the final premium filing waived and after a short back and forth they were happy to put in writing that we could forego the final filing.

Its worth a shot, especially is you have a small plan which I am guessing you do since you are preparing a filing now (probably for April 30th?).

In all practicality it makes sense.

[Andy the Actuary]

Question: There are numerous posts such as "We made a call in to the PBGC." Would you please discuss what "a call" entailed. How many calls? How did you finally get to the "right" person? Did you have to disclose who your client was to get a response in writing? About how long did this entire process take in terms of weeks/months, back and forth communications?

[david rigby]

The fact that the checks were not timely cashed is a mute point.

[Guest jmrodrig]

Question: There are numerous posts such as "We made a call in to the PBGC." Would you please discuss what "a call" entailed. How many calls? How did you finally get to the "right" person? Did you have to disclose who your client was to get a response in writing? About how long did this entire process take in terms of weeks/months, back and forth communications?

I apologize for not including more detail.

Since the plan I worked on also went through the PBGC termination process, we fully disclosed the name of the company and the fact that they were okayed by the PBGC to terminate. We called the PBGC number for practitioners (1-800-736-2444). Once you reach a representative you must request to speak with someone in the Premium Filing Department.

I do not recall the name of the person I spoke with but we pitched to them the request for exemption. After we gave the name of the company and the facts about when assets were fully distributed (prior to the due date for the premium filing) the representative in the Pemium Filing Department stated he would need to get confirmation from a supervisor. BE SURE TO GET THEIR DIRECT EXTENSION. THEY ALL HAVE ONE.

Five business days later we had not heard a response and we called back using the extention given. At that time the representaive got the "OK" from his supervisor that the company could forego the last filing. YOU MUST ASK THE REPRESENTATIVE TO SEND YOU AN E-MAIL WITH THE CONFIRMATION because they may not volunteer this.

We have not had an issue to date with this case.

One last note: I would have been happy to dig up the name of the person I dealt with but we have since sent the file to storage.

[Andy the Actuary]

Thank you. This is valuable and helpful information.

[JBones]

I just emailed the address on the PBGC practitioners website: premiums@pbgc.gov, and received a response the next morning.