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If you file a premium payment after the due date, we will bill the plan for late charges. The late charges include both interest and penalty charges. The charges are based on the outstanding premium amount due on the due date. If your due date is extended because it falls on a weekend or federal holiday, and your premium payment is filed after the extended due date, interest and penalty will be computed from the actual (unextended) due date. PBGC also may assess penalties under ERISA section 4071 for failure to timely provide premium-related information.
The late payment penalty charge is established by us, subject to ERISA’s restriction that the penalty not exceed 100 percent of the unpaid premium amount. Subject to this cap, the penalty is a percentage of the unpaid amount for each month (or portion of a month) it remains unpaid with a minimum penalty of $25. The monthly rate is higher or lower depending on whether the premium underpayment is “self-corrected.” The penalty rate is 1 percent of the late premium payment per month if the late payment is made on or before the date when PBGC issues a written notification indicating that there is or may be a premium delinquency (for example, a statement of account (premium invoice), a past-due-filing notice, or a letter initiating an audit). A penalty rate of 5 percent per month applies to payments made after the PBGC notification date.
The late payment interest charge is set by ERISA, and we cannot waive it. Interest accrues at the rate imposed under section 6601(a) of the Code (the rate for late payment of taxes) and is compounded daily. These rates are published by IRS quarterly and are also posted on the Practitioners Page of PBGC’s Web site.
Minimizing Late Payment Charges
If you cannot make a comprehensive filing by the due date because you are having difficulty determining some of the required
information, you can minimize late payment charges by submitting payment (the amount due or an estimate) without submitting
the certified comprehensive filing. If you choose to do this, you must pay by check or wire transfer outside of My PAA.
The options are:
JPMorgan Chase Bank, N.A.
ABA: 071000013
Account: 656510666
Beneficiary: PBGC
Reference: “EIN/PN: XX-XXXXXXX/XXX
PYC: MM/DD/YY”
Report the Employer Identification Number and Plan Number (“EIN/PN”) and the date the Premium Payment Year commenced (PYC) in the payment ID line of the electronic funds transfer in the format “EIN/PN: XX-XXXXXXX/XXX PYC: MM/DD/YY.” Since we process these payments electronically, strict adherence to this format is required for accurate and timely application of your payment. Any deviation from the prescribed format (e.g., combining premiums for two or more plans into one payment) may result in our sending you a bill for premium, interest, and penalty if our automated system cannot apply your payment.
The payment should be clearly identified with the Employer Identification Number (EIN), Plan Number (PN) and the plan year commencement date (PYC) for the plan. You should then submit your certified filing as soon as possible.
PBGC does not recommend this procedure. We may assess a penalty under ERISA section 4071 for failure to furnish premium-related information by the required due date, and making a premium payment without an accompanying premium information filing may cause significant delay in providing a statement of account for the plan. However, when the information filing is ultimately made, the payment will be credited as of the date it was filed and thus stop the accrual of late payment charges on the amount paid.
Statements of Account and Past Due Filing Notices