On October 15, 2021, the Pension Benefit Guaranty Corporation (PBGC) issued Technical Update 21-1 explaining that the ERISA Section 4010 reporting obligation is waived in situations where the reporting requirement is triggered only due to a retroactive election permitted by the American Rescue Plan Act of 2021 (ARPA) and IRS Notice 2021-48, among other items.
As background, certain underfunded single-employer plans are required to report identifying, financial and actuarial information to PBGC per Section 4010 of ERISA. This requirement is triggered if one or more plans sponsored by a member of a controlled group had a funding target attainment percentage below 80%.
ARPA amended the rules for single-employer plans such that the amortization period for shortfall amortization bases was extended for plan years beginning after December 31, 2021 (or for plan years beginning after December 31 of 2018, 2019 or 2020 if the plan sponsor chooses). ARPA also modified the way stabilized discount rates are determined for plan years beginning after December 31, 2019 (or a later effective date if the plan sponsor chooses).
Due to these changes, it is now possible that a plan’s 4010 FTAP (interest rate stabilization rules) may retroactively drop below 80%, triggering a retroactive 4010 filing requirement. It is also possible that this could result in a change to already reported actuarial information.
As such, the requirement to submit a 4010 filing for an information year ending before December 31, 2021, is waived when such filing would not have been required absent the enactment of ARPA. Further, for 4010 filings that contain actuarial information that subsequently changed due to ARPA, no amendment is necessary. PBGC explains that it reserves the right to request a revised actuarial information reflecting any ARPA-related changes, should they need such information related to monitoring and enforcement activities.
Employers should be aware of these developments.
Technical Update 21-1 »
IRS Notice 2021-48 »