Technical Update 09-4

TECHNICAL UPDATE 09-4
Pension Benefit Guaranty Corporation
1200 K Street, N.W., Washington, DC 20005-4026
________ __, 2009
Technical Update 09-4: Reportable Events; Funding-Related Determinations; Missed
Quarterly Contributions; Guidance for 2010 Plan Years.
This Technical Update 09-4 provides Pension Benefit Guaranty Corporation (PBGC) guidance
for plan years beginning in 2010 on compliance with the reportable events requirements of
section 4043 of the Employee Retirement Income Security Act of 1974 (ERISA) and PBGC’s
regulation on Reportable Events and Certain Other Notification Requirements (29 CFR
part 4043).
This Technical Update addresses two topics:
● Funding-related determinations for purposes of waivers, extensions, and the advance
reporting threshold test.
● Missed quarterly contributions.
Regarding funding-related determinations for purposes of waivers, extensions, and the advance
reporting threshold test, this Technical Update provides in general that for purposes of the
reportable events regulation, a plan’s unfunded vested benefits (UVBs) and the value of its assets
and vested benefits are determined for a plan year beginning in 2010 in the same manner as for
variable-rate premiums (VRPs) for the preceding plan year.
Regarding missed quarterly contributions, this Technical Update provides in general that for
purposes of the reportable events regulation, if a required quarterly contribution for the 2010
plan year is not timely made to a plan, and the failure to make the contribution is not motivated
by financial inability, the reporting requirement under § 4043.25 of the reportable events
regulation —
(1) is waived if the plan has fewer than 25 participants for the prior plan year, and
(2) if the plan has at least 25 but fewer than 100 participants for the prior plan year, will
be considered satisfied if a simplified notice is filed with PBGC by the time the first
missed-quarterly reportable event report for the 2010 plan year would otherwise be due.
PBGC expects to supersede the guidance in this Technical Update with a final rule amending the
reportable events regulation sometime during 2010, as discussed below.

-2I. Background
ERISA section 4043 and subparts A through C of the reportable events regulation require that
PBGC be notified of certain “reportable events.” In some cases, where (among other things) a
“threshold test” is met, advance reporting is required. The reportable events regulation provides
for waivers and extensions, some of which (“funding-based” waivers and extensions) are based
on quantities used in calculating VRPs — assets, vested benefits, and UVBs (“VRP values”) —
for the plan year in which the event occurs or becomes effective, calculated as of the “testing
date” for that year.
The Pension Protection Act of 2006 (PPA 2006) modified the way the VRP is determined, and
PBGC has implemented those modifications in its premium regulations. Pending amendment of
the reportable events regulation to conform to and implement the changes, PBGC issued two
Technical Updates to provide temporary guidance about how to apply the advance reporting
threshold test and the funding-based waivers and extensions under the reportable events
regulation: Technical Update 07-2 (dealing with event years beginning in 2008) and Technical
Update 09-1 (dealing with event years beginning in 2009).
One reportable event, described in § 4043.25 of the reportable events regulation, is the failure to
timely make a required funding contribution, including a required quarterly contribution. In
Technical Update 09-3, PBGC provided a waiver of this reporting requirement for certain small
plans, and an alternative method of compliance with the reporting requirement for certain other
small plans, with respect to quarterly contributions for plan years beginning in 2009.
On __________, 2009, PBGC published (at __ FR _____) a proposed rule to amend the
reportable events regulation to accommodate the changes to the VRP rules. The proposed rule
would also eliminate most automatic waivers and extensions and would require reporting of a
missed quarterly contribution without regard to plan size or the motivation for missing the
contribution. Under the proposed rule, the amendments would apply to post-event reports for
reportable events occurring on or after the effective date of the final rule and to advance reports
due on or after the effective date of the final rule. PBGC expects the final rule to be effective
sometime after the beginning of 2010. Accordingly, there is a need for interim guidance for
2010 as to compliance with the existing (unamended) regulation for reportable events to which
the final rule will not apply.
II. Discussion.
To provide interim guidance for 2010, PBGC in this Technical Update is extending the guidance
in Technical Updates 09-1 and 09-3 until the amendments to the reportable events regulation
become effective — except for the guidance in Technical Update 09-1 regarding the Form 1
extension. As the following discussion explains, the guidance previously provided for applying
the Form 1 extension is not needed for 2010.

-3The Form 1 extension is based on the premise that event-year VRP values, although determined
as of the event-year testing date, may not in fact be calculated until the event-year VRP due date.
Where the Form 1 extension is available, the filing due date is extended until 30 days after the
VRP filing deadline for the event year if the criteria for one of the funding-based waivers were
satisfied for the prior year. For 2009, the “look-back” year was 2008, for which, under Technical
Update 07-2, funding-based waiver criteria were to be determined under the premium rules in
effect before 2008 (i.e., ignoring PPA 2006 changes). Thus Technical Update 09-1 permitted the
Form 1 extension to be applied using VRP values determined either under either pre- or postPPA 2006 rules.
For events that occur in an event year beginning in 2010, the look-back year is 2009, for which,
under Technical Update 09-1, VRP values are to be determined in the same manner as for
premiums for the prior plan year (generally 2008, to which post-PPA 2006 premium rules apply).
There is no choice of using pre-PPA 2006 rules, and indeed no choice is needed for purposes of
the Form 1 extension, because by the beginning of the 2010 plan year, 2008 VRP values under
post-PPA 2006 law will be known. Accordingly, no special guidance for the Form 1 extension is
needed for 2010.
III. Guidance
Funding-related determinations for purposes of waivers, extensions, and advance
reporting. The VRP values (the amount of UVBs and the value of assets and vested benefits) as
of the testing date to be used for an event year beginning in 2010 for purposes of subparts A
through C of the reportable events regulation are those determined for premium purposes for the
plan year preceding the event year under the premium regulations as amended to conform with
PPA 2006. 1 For example, in the case of a calendar year plan with a January 1 valuation date, the
VRP values determined as of January 1, 2009, for purposes of the 2009 variable rate premium
are also used for applying the $50 million advance-reporting threshold test for events becoming
effective in 2010.
Missed quarterly contributions — plans with fewer than 25 participants. In the case of a
plan that had fewer than 25 participants for whom flat-rate premiums were payable for the 2009
plan year, the reporting requirement under § 4043.25 of the reportable events regulation is
waived with respect to a failure to make one or more required quarterly contributions for the
2010 plan year under section 303(j)(3) of ERISA if financial inability to make the contribution(s)
is not the reason for not making the contribution(s).
Missed quarterly contributions — plans with 25 or more but fewer than 100 participants.
In the case of a plan that had 25 or more but fewer than 100 participants for whom flat-rate
premiums were payable for the 2009 plan year, the reporting requirement under § 4043.25 of the
reportable events regulation will be considered satisfied with respect to a failure to make one or
more required quarterly contributions for the 2010 plan year under section 303(j)(3) of ERISA if
1

The waiver based on “no variable-rate premium” is unaffected by this Technical Update.

-4financial inability to make the contribution(s) is not the reason for not making the contribution(s)
and if, by the time the first missed-quarterly reportable event report for the 2010 plan year would
otherwise be due, the person(s) that would be required to report (or a duly authorized
representative) file(s) with PBGC a notice stating —
(1) the name of the plan and the Employer Identification Number and Plan Number most
recently reported for the plan in a PBGC premium filing;
(2) the date the 2010 plan year began;
(3) that a quarterly contribution to the plan for the 2010 plan year has not been (or will
not be) timely made;
(4) that financial inability to make the contribution is not the reason for not making the
contribution;
(5) the last day for satisfying the minimum funding requirement for the plan for the 2010
plan year (the “final payment date”);
(6) that the filer understands that if the minimum funding requirement for the plan is not
satisfied by the final payment date, a reportable event notice must be filed under the
reportable events regulation; and
(7) the name, telephone number, and e-mail address of a person (who may be the filer)
whom PBGC may contact for additional information.
Reports must be made either in the manner required for reportable events reports generally or by
e-mail to [email protected]. See Technical Update 09-3 for sample notice language.
As noted above, PBGC has issued a proposed rule to amend the reportable events regulation, and
unless the related final rule provides otherwise, that final rule will supersede this Technical
Update with respect to reportable events to which the final rule applies.
IV. Further guidance and other effect
This Technical Update updates the guidance provided in the instructions to PBGC Form 10 and
in the instructions to PBGC Form 10-Advance.
This Technical Update has no effect on subpart D of the reportable events regulation, Notice of
Failure to Make Required Contributions.
This Technical Update has no effect on the determination of premiums or on any other
requirements under other PBGC regulations other than the reportable events regulation.

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V. Disclaimer
This guidance represents PBGC’s current thinking on this topic. It does not create or confer any
rights for or on any person or operate to bind the public. If an alternative approach satisfies the
requirements of the applicable statutes and regulations, you can use that approach. If you want
to discuss an alternative approach (which you are not required to do), you may contact the
PBGC.
VI. PBGC Contact Points
For questions about this Technical Update 09-1, contact Deborah Murphy of the Legislative and
Regulatory Department at (202) 326-4223, ext. 3451, or [email protected] or Amy
Viener of the Policy, Research and Analysis Department at (202) 326-4080, ext. 3919, or
[email protected].