Statements of Account and Past Due Filing Notices

Why are Statements of Account and Past Due Filing Notices issued?

Statements of Account (SOA) are issued for premium, penalty, and interest amounts owed to PBGC as a result of late payment or underpayment of premiums. To ensure that the amount due does not increase, the premium and interest must be paid within 30 days of the SOA's issue date. If the SOA appears to be in error, contact our premium payer customer service representatives (202-326-4242). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. In some cases, it may be necessary to submit an amended filing to clear up the problem that caused the erroneous SOA to be issued.

Past Due Filing Notices are issued when PBGC's records indicate that a plan's premium filing form is missing for a particular plan year. If the Past Due Filing Notice appears to be in error (e.g., the premium filing was made or the EIN/PN is incorrect), contact our premium payer customer service representatives (202-326-4242). Please see the preceding paragraph for the TTY/TDD telephone number. It may be necessary to submit an amended filing to correct the error. For issues involving a plan's termination, you may be referred to PBGC's customer service representatives for plan termination issues (202-326-4000). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. Premium and interest cannot be waived. Late payment penalties may be waived depending on the facts and circumstances (see the answer to Question 12 for details on waiver requests).

How are penalty and interest computed on Statements of Account?

For filings for plan years beginning before 1996, a late payment penalty of 5% of the unpaid premium is assessed each month (or portion of a month) the amount remains outstanding, subject to a minimum of $25 and a maximum of 100% of the unpaid premium. Starting with filings for the 1996 plan year, the late payment penalty charge is lower for premium underpayments that are self-corrected. The penalty rate is 1% of the late premium payment for each month overdue if the late payment is made on or before the date when PBGC first issues a written notification indicating that there is or may be a premium delinquency (e.g., a Statement of Account (SOA), Past Due Filing Notice, or letter initiating an audit). The normal penalty rate of 5% per month applies to under-payments not self-corrected. The same minimum and maximum rules apply in either case as for pre-1996 plan years.

Interest charges are assessed for any premium amount not paid when due, whether because of a late filing, a low estimated participant count, an erroneous participant count, or some other mistake in computing the premium owed. If interest is charged, it must be paid within 30 days of the SOA's issue date or it will continue to accrue. (Interest will also continue to accrue if any portion of the premium remains unpaid.) The interest rate charged is established on a quarterly basis and the interest rates are published on or about the 15th of January, April, July, and October in the Federal Register. These interest rates are also posted on PBGC's World Wide Web site. Interest is compounded daily.

Why is there an interest charge for underpayment or late payment of estimated premiums?

Our regulations require a large plan to pay the full final amount of its flat-rate premium by the end of the second month of the plan year - not an estimate. We accept an estimate because we realize that plans may not know the final amount by the early filing date. For the same reason, we waive the underpayment penalty if a plan meets certain safe harbor requirements - payment by the end of the second month of the plan year of either (1) 90% of the flat rate portion due for the current plan year or (2) 100% of the flat-rate portion that would be due using the previous plan year's participant count and payment by the reconciliation filing date of 100% of the flat rate portion. PBGC has no authority to waive interest on premium amounts not timely paid, so we must charge interest on any shortfall from the full amount due even if the estimated payment meets the safe harbor requirements for relief from the penalty.

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