Required Quarterly Contributions

[alexa]

We have a 1/15/2012 quarterly contribution due

Someone in my office mentioned a 30 day grace period for each quarterly where you don't have to worry about giving participants notice of msisign the date?

[quinnfield]

Love that avatar! Here's some guidance I stole from a Towers Watson publication:

Failing to make a required contribution is a reportable event under Pension Benefit Guaranty Corporation (PBGC) rules. If the accumulated missed contributions are more than $1 million, the sponsor must notify the PBGC using Form 200 within 10 days of the missed contribution deadline. The failure also triggers a lien.

If the accumulated missed contributions are $1 million or less, the sponsor must file the much simpler Form 10 within 30 days of the missed payment deadline. However, sponsors that pay the amount within the 30 days do not have to file the form.

[Effen]

You are also correct that if the contribution is made within 30 days, you don't need to notify the particpants.

[david rigby]

You are also correct that if the contribution is made within 30 days, you don't need to notify the particpants.

But it's still late!

- See Line 20b on Sch SB

- interest penalty

[tymesup]

I think we've got 60 days before the Notice to Participants is triggered:

Act Sec. 101. (d)

NOTICE OF FAILURE TO MEET MINIMUM FUNDING STANDARDS. --

(1)

IN GENERAL. --

If an employer maintaining a plan other than a multiemployer plan fails to make a required installment or other payment required to meet the minimum funding standard under section 302 to a plan before the 60th day following the due date for such installment or other payment, the employer shall notify each participant and beneficiary (including an alternate payee as defined in section 206(d)(3)(K)) of such plan of such failure. Such notice shall be made at such time and in such manner as the Secretary may prescribe.

[alexa]

So if I understand correctly, there is a 30 day grace period of sorts( except for interest on late quarterly) and we have 60 days to notify participants if we are more than 30 days late?

thanks!

[tymesup]

Off the shelf, not sure of the exact endpoints on these size and timing intervals:

The interest penalty applies if the quarterly is late.

The PBGC gets a Form 10 if the quarterly is 30 days late and the plan is large (100). This applies to each late quarterly.

The PBGC gets an abbreviated notice if the quarterly is 30 days late and the plan is medium (25-100). A new notice is not required for a subsequent late quarterly in the same plan year.

The PBGC gets nothing if the plan is small (1-25).

The participants get a notice if a quarterly is 60 days late. It's not clear when the notice is due or what it looks like, since the Comissioner has never issued regulations. Some provide it in the AFN or SAR.