Single Employer Plan Terminations: Revised Reporting and Disclosure Requirements
Geller, Sheldon M., The CPA Journal
Employers sponsoring defined benefit pension plans must be aware of recent changes in government filing and notice requirements. The PBGC released new forms for standard and distress terminations and revised the timetables for plan terminations in proposed regulations. Failure to file completed forms within prescribed time limits will void any proposed plan termination and may result in additional PBGC premiums and penalties of up to $1,000 per day under ERISA.
The time limits and required filings, effective for notices of intent to terminate issued on or after February 1, 1990, are as follows: 1. A written notice of intent to terminate (including the proposed termination date) must be provided to affected parties at least 60 and no more than 90 days before the proposed termination date; 2. The proposed termination date cannot be less than 60 days after the issuance of the written notice of intent to terminate; 3. An actuarial certification must be filed with PBGC within 90 days after the proposed termination date; 4. PBGC Form 5500 and Schedule EA-S must be used in connection with notices of intent to terminate issued on or after February 1, 1990, and participants and beneficiaries must receive notice of benefits specifying the amount to be received upon plan termination by the date of filing Form 500 and Schedule EA-S; 5. For standard terminations (e.g., adequately funded plans), the proposed date for distribution of assets cannot be earlier than 60 days or later than 240 days from the date of filing Form 500 with the PBGC. If no notice of noncompliance is issued by PBGC (within 60 days of filing), final distribution of assets must take place within 180 days after the 60-day period during which PBGC reviews the filing. …