The Highway and Transportation Funding Act of 2014 (HATFA) had consequences for annual financial and actuarial information reporting under Section 4010 of ERISA and part 4010 of the PBGC regulations. To better clarify how it applies since HATFA's retroactive application for 2013 may cause a timing issue for some 4010 filers, the PBGC on Oct. 17 issued Technical Update 14-2: Effect of HATFA on 4010 Reporting.
The technical update notes that HATFA extends the period during which the narrowest range of discount rates applies through the 2017 plan year. Plan sponsors may wait until the 2014 plan year to use HATFA rates for funding purposes; if they do, the MAP-21 rates will apply for the 2013 plan year. Under IRS Notice 2014-53, plans may decide whether to use MAP-21 or HATFA rates for 2013 funding determinations as late as Dec. 31, 2014 (or, if later, the due date for the 2013 Form 5500 Annual Return/Report).
If a 4010 filing contains actuarial information for 2013 based on segment rates that differ from those the plan ultimately uses, ordinarily the filing would need to be mended. But to avoid imposing a requirement that would be unduly burdensome, the PBGC says that 4010 filings need not be amended solely to revise actuarial information that changed because of a decision to use HATFA rates for the 2013 plan year of a plan reported in the filing. This relief applies regardless of when the 4010 filing is submitted (that is, before or after HATFA was enacted).
If a 4010 filer submitted its 2013 filing before an actuarial valuation report is available, the filer may submit an actuarial valuation report by the alternative due date based on either MAP-21 rates or HATFA rates. Similarly, if such a filer submits a 4010 filing in the future containing actuarial information (on Schedule P) for 2013 based on MAP-21 rates, the filer may submit an actuarial valuation report by the alternative due date based on either HATFA or MAP-21 rates.
A Caveat
The guidance cautions that the PBGC reserves the right to request that a filer submit revised actuarial information for 2013 reflecting the rates the plan ultimately uses for 2013, if the PBGC decides it needs the information for its monitoring and enforcement activities. But the PBGC says that if it requests such information, it will provide sufficient time to comply with the request.
Reporting Made Unnecessary
The guidance says that the PBGC recognizes that because of the retroactive application of HATFA, it is possible that a 4010 filing that has already been submitted is no longer required because of HATFA. It says that if a filer in that situation stated in the filing that an actuarial valuation report would be submitted by the alternative due date, the filer does not have to submit that report.
And if a 4010 filing is also not required for the next information year, the filer need not report to PBGC the reason why that filing is not required, as would ordinarily be required for previous filers. It is possible that the PBGC may contact the filer asking why such report or filing was not submitted; filers wishing to avoid such correspondence may send a brief email to [email protected].
The technical update notes that HATFA extends the period during which the narrowest range of discount rates applies through the 2017 plan year. Plan sponsors may wait until the 2014 plan year to use HATFA rates for funding purposes; if they do, the MAP-21 rates will apply for the 2013 plan year. Under IRS Notice 2014-53, plans may decide whether to use MAP-21 or HATFA rates for 2013 funding determinations as late as Dec. 31, 2014 (or, if later, the due date for the 2013 Form 5500 Annual Return/Report).
If a 4010 filing contains actuarial information for 2013 based on segment rates that differ from those the plan ultimately uses, ordinarily the filing would need to be mended. But to avoid imposing a requirement that would be unduly burdensome, the PBGC says that 4010 filings need not be amended solely to revise actuarial information that changed because of a decision to use HATFA rates for the 2013 plan year of a plan reported in the filing. This relief applies regardless of when the 4010 filing is submitted (that is, before or after HATFA was enacted).
If a 4010 filer submitted its 2013 filing before an actuarial valuation report is available, the filer may submit an actuarial valuation report by the alternative due date based on either MAP-21 rates or HATFA rates. Similarly, if such a filer submits a 4010 filing in the future containing actuarial information (on Schedule P) for 2013 based on MAP-21 rates, the filer may submit an actuarial valuation report by the alternative due date based on either HATFA or MAP-21 rates.
A Caveat
The guidance cautions that the PBGC reserves the right to request that a filer submit revised actuarial information for 2013 reflecting the rates the plan ultimately uses for 2013, if the PBGC decides it needs the information for its monitoring and enforcement activities. But the PBGC says that if it requests such information, it will provide sufficient time to comply with the request.
Reporting Made Unnecessary
The guidance says that the PBGC recognizes that because of the retroactive application of HATFA, it is possible that a 4010 filing that has already been submitted is no longer required because of HATFA. It says that if a filer in that situation stated in the filing that an actuarial valuation report would be submitted by the alternative due date, the filer does not have to submit that report.
And if a 4010 filing is also not required for the next information year, the filer need not report to PBGC the reason why that filing is not required, as would ordinarily be required for previous filers. It is possible that the PBGC may contact the filer asking why such report or filing was not submitted; filers wishing to avoid such correspondence may send a brief email to [email protected].
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