Plan sponsors of qualified single-employer pension plans and their actuaries need to be on the lookout for events that require additional reporting to the Pension Benefit Guaranty Corporation (PBGC). A notice called PBGC Form 10 Post-Event Notice of Reportable Events is required to be filed with the PBGC for a variety of “PBGC reportable events,” shown in Figure 1. In some cases, the plan sponsor can notify the PBGC in advance of an event, using Form 10-Advance.

PBGC Form 10 filing essentials

Form 10 is required to be filed electronically at efilingportal.pbgc.gov and is due within 30 days of one of the reportable events. A sample Form 10 is available for reference and includes a checklist for each reportable event, listing the required information for each. Examples of information required include:

• Identifying information about the plan and its sponsor
• A brief description of the facts of the event
• Financial information related to the plan and the company itself
• Plan documents
• Determination Letters from the IRS
• The controlled group structure of the plan sponsor
• Actuarial reports and other information

For certain situations, the plan sponsor may be exempt from filing the Form 10. These waivers vary for different reportable events and can be found in the instructions for each type of event. In general, a plan is not exempt if it is in the process of terminating, unless the deadline for the Form 10 occurs after all of the plan’s assets have been distributed.

We will take a closer look at the first two reportable events, active participant reduction and failure to make required contributions under $1 million.

PBGC Form 10 active participant reduction: What pensions are at higher risk?

One of the notable PBGC Form 10 reportable events involves a reduction in active participants. On the surface, this type of event may seem likely to apply only in a year where numerous employees terminate (whether voluntarily or involuntarily). A plan with frozen participation and an aging active population grows increasingly sensitive to reductions in head counts due to the plan’s decreasing active head count, which is the basis of determining whether this reportable event is triggered.

There are two different variations of this event type that may occur:

1. A single-cause event, which, by name, indicates that the reduction in active head counts may be isolated to a sole source (that may occur all at once or over a planned series of time).
2. An attrition event occurs over a course of a plan year, when the total reduction in active participants (unrelated to single-cause events) exceeds 20%.

The threshold and the notice due dates differ, depending on what type of event occurs; Figure 2 details the specifics based upon event type. Regardless of active reduction event type, the number of actives both at date of event and as of the beginning of the plan year is required to be reported along with the controlled group structure, actuarial information, and company financial information.

Reporting the active participant reduction event could potentially be waived if certain criteria are met. For instance, if the total (not active) participant count for the prior plan year (as used for the flat-rate PBGC premium calculation) was no more than 100 participants (a “small plan”) or if no PBGC variable-rate premium was required for the prior plan year, then the PBGC Form 10 notice for this type of event is not required. Publicly traded companies that annually file a timely U.S. Securities and Exchange Commission (SEC) Form 8-K are also exempt from this filing requirement (as such events will be reported on the Form 8-K). A reporting waiver similarly applies to certain low-default-risk plans, dependent on whether the contributing plan sponsor meets a series of specific requirements related to financial security.

PBGC Form 10 required or missed contributions

The Form 10 is used for missed contributions under $1 million. For amounts greater than that, a separate filing called a Form 200 is required instead with a stricter deadline of within 10 days after the missed deadline. There are three situations where a wavier applies for the Form 10 missing contribution requirement:

1. The required contribution was a quarterly requirement and the plan is considered a small plan (defined above). Note that this small plan exemption does not apply to any final contribution due eight and a half months after the end of the plan year.
2. The missed contribution is made within 30 days of the original due date.
3. If the plan sponsor made an election, after the contribution due date, to use an available carryover or prefunding balance to satisfy the contribution rather than making a cash contribution.

The necessary reporting information for a missed contribution on the Form 10 includes the due date and missed contribution amount(s), as well as the due date and amount of the next contribution due. A full schedule must be provided of all late contributions not reported on the last Internal Revenue Code (IRC) Form 5500 Schedule SB, possibly spanning over multiple plan years. Another listing of any contributions that have since been made to make up the missed contributions, including evidence of the amounts paid, is also required. Finally, the filing requests the reason why the contribution was not made on the due date.

In addition to the specifics around the contribution requirements, more general information about the plan and plan sponsor is required: controlled group structure (including other qualified plans), actuarial information, and company financial information.

Final thoughts on PBGC Form 10 for plan sponsors

While the active participant reduction and failure to make required contributions under $1 million are likely candidates for reportable events for a plan, a plan sponsor should be aware of the full listing of triggering events that require notice to the PBGC. This way, the plan sponsor can coordinate with the plan’s actuary and legal team to confirm if and when a PBGC Form 10 filing needs to be made.