Victims of natural disasters will no longer need to wait for extension instructions from the Pension Benefit Guaranty Corp. (PBGC) to meet certain deadlines, thanks to a new policy issued in July 2018.
The PBGC announced in the July 2 Federal Register that victims of natural disasters may use the Internal Revenue Service (IRS) instructions for late filings and deadlines found in its disaster relief news releases. Victims will need to look at the IRS statement to determine whether they qualify, and they will need to notify the PBGC that they are eligible for the extension. For premium filings, the agency will not impose any late fees or interest on the payment if made within the relief timeframe.
In the past, the PBGC, which serves as the insurance backstop for defined benefit plans, has waited for the IRS to issue its disaster relief policy before following with an announcement. Filers had to wait for the PBGC to respond to the IRS announcement to make sure the PBGC was going to provide disaster relief. In many instances, the follow-up information was boilerplate and did not give any new details.
The July 2 Federal Register notice serves as a one-time announcement outlining the qualifications and procedures to follow each time the IRS issues a disaster relief news release. The notice clarifies how the PBGC relief is tied to the IRS disaster relief news; it also explains other details including the types of filings covered, how to notify the PBGC and exceptions to the rule.
In addition, filers will be able to request relief for issues not covered by the general announcement.
The agency’s new policy applies to disasters covered by an IRS disaster relief news release on or after July 2, 2018.
Warren Averett is an independent member of the BDO Alliance USA. This article was borrowed with permission from BDO USA, LLP.