The Pension Benefit Guaranty Corporation is giving defined benefit pension plan sponsors in Texas a break when it comes to certain filing deadlines because of Hurricane Harvey. The agency says it will waive certain penalties for plan administrators or contributing plan sponsors who are unable to obtain the information or other assistance they need to meet the deadline from a service provider, bank or other person whose operations are directly affected by the severe storms and flooding from the hurricane, which began on Aug. 23.
The PBGC announced its intent to provide relief to victims last week, but released more details this week.
The IRS provided relief for those who need extensions in filing their Form 5500 series returns in its notice TX-2017-09. The IRS and PBGC notices cover individuals who reside in or have businesses in Aransas, Austin, Batrop, Bee, Brazoria, Calhoun, Chambers, Colorado, DeWitt, Fayette, Fort Bend, Galveston, Goliad, Gonzales, Hardin, Harris, Jackson, Jasper, Jefferson, Karnes, Kleberg, Lavaca, Lee, Liberty, Matagorda, Montgomery, Newton, Nueces, Orange, Polk, Refugio, Sabine, San Jacinto, San Patricio, Tyler, Victoria, Walker, Waller and Wharton counties in Texas.
The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, taxpayers with deadlines falling on or after Aug. 23 and before Jan. 31 are granted additional time to file through Jan. 31. This includes taxpayers who had a valid extension to file their 2016 return that was due to run out on Oct. 16.
The extension also applies to quarterly estimated income tax payments originally due on Sept. 15 and Jan. 16, and the quarterly payroll and excise tax returns originally due on Oct. 31. In addition, penalties on payroll and excise tax deposits due on or after Aug. 23 and before Sept. 7 will be abated as long as the deposits were made by Sept. 7.
The PBGC says it will waive the applicable penalty for late premium filings that were required to be made beginning on or after Aug. 23, and on or before Jan. 31, if the plan administrator or designated person resides in one of the above-named Texas counties. It won’t waive the applicable interest charges, however.
If a plan administrator is terminating a plan and resides in one of the affected Texas counties, that person has until Jan. 31, to file the required notices, including the standard termination notice, to complete the distribution of plan assets and to file the post-distribution certification without penalty.
PBGC says its disaster relief announcement doesn’t cover every situation in which disaster relief may be warranted.
It does not capture every person who might experience difficulty in meeting a PBGC deadline for reasons relating to the severe storms and flooding from Hurricane Harvey. It also does not grant specific disaster relief for all filings; for instance, it doesn’t provide relief for certain filings that involve particularly important or time-sensitive information where there may be a high risk of substantial harm to participants or the PBGC insurance program if the documents aren’t filed on time. Examples of this include notices of large missed contributions under section 302(f) of ERISA, advance notices of reportable events under ERISA section 4043 and annual financial and actuarial information from certain controlled groups under ERISA section 4010.
Plan sponsors who believe they need relief from the PBGC, but are not covered under the current notice, should contact Diane Morstein at the PBGC as soon as possible by calling 800-736-2444, ext. 4136, or 202-326-4136 or emailing firstname.lastname@example.org.
Participants in 401(k) plans, 403(b) tax-sheltered annuities or 457 deferred-compensation plans may be able to take advantage of streamlined loan and hardship distribution rules for themselves or to help out family members who live or work in the areas impacted by Hurricane Harvey. Hardship withdrawals need to be made by Jan. 31, 2018 to qualify for this relief from the IRS.
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