ERISA Section 4010 requires a contributing sponsor of certain single-employer pension plans, as well as the sponsor’s controlled group members, to provide controlled group, financial, and actuarial information to the PBGC each year.  The requirement generally applies when one or more plans within a controlled group has a funding target attainment percentage for 4010 purposes (“4010 FTAP”) below 80%.

Technical Update Number 23-1 released by the PBGC on August 7th provides a one-time waiver of the ERISA Section 4010 reporting requirement for any filer that meets the following requirements:

  • The filer was not required to submit a 4010 report for any of the five immediately preceding information years;
  • Either (i) none of the includable plans has a market-based 4010 FTAP below 85%, or (ii) the market-based aggregate 4010 funding shortfall does not exceed $15 million; and
  • The valuation date for each includable plan with a 4010 FTAP below 80% is on or after October 1, 2022 and on or before March 1, 2023.

Absent relief from the PBGC, many entities that are not typically subject to 4010 reporting would have been required to submit a filing this year.  As explained in the Update, the “atypical and almost unprecedented interaction of market conditions” in late 2022 and early 2023 is expected to drive many plans’ 4010 FTAP below 80% “for the first time in a long time (or perhaps ever).”  The same plans might have 4010 FTAPs at or above the 80% threshold if the calculation used a market-based approach that does not smooth out discount rates and asset values over time.

To take advantage of the waiver, the filer must notify the PBGC by email no later than 15 days before the 4010 report would otherwise be due.  The notice must be sent to ERISA.4010@pbgc.gov with the subject line “Technical Update 23-1 Waiver” and identify both the controlled group’s ultimate parent and the date that the applicable information year ends.  Given the detailed information required for a full 4010 report, the waiver provides welcome relief for sponsors and controlled group members that historically have not needed to file 4010 reports with the PBGC.

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Photo of Justin Alex Justin Alex

Justin S. Alex is a partner and a member of the Employee Benefits & Executive Compensation Group.

Justin advises private and public companies on all aspects of their employee benefits and executive compensation arrangements and plans.

He has particular experience in the sports…

Justin S. Alex is a partner and a member of the Employee Benefits & Executive Compensation Group.

Justin advises private and public companies on all aspects of their employee benefits and executive compensation arrangements and plans.

He has particular experience in the sports industry, including employment agreements for executives at the highest levels in professional sports and the benefits and compensation aspects of numerous transactions, such as the purchase or sale of the Buffalo Bills, Carolina Panthers, Denver Broncos, Miami Marlins, Real Salt Lake, OL Reign, Professional Hockey Federation, the Licensed Sports Group Unit of VF Corporation, Full Swing Golf, and ADPRO Sports and the merger of the USFL and XFL.

In addition to Justin’s general benefits and compensation practice, he spends a significant portion of his time advising employers and financial sponsors with respect to pension liabilities. He also advises the trustees of collectively bargained single-employer and multiemployer plans with respect to their administration, governance, and legal compliance.

Prior to joining Proskauer, Justin was an attorney in the Office of Chief Counsel at the Pension Benefit Guaranty Corporation (PBGC), where he gained significant experience with pension termination and underfunding issues. He also represented the PBGC in corporate bankruptcies and federal court litigation.

Justin is the co-editor of Proskauer’s Employee Benefits & Executive Compensation Blog and the Hiring Partner for Proskauer’s Washington office. He also serves on the Board of the Washington Lawyers’ Committee for Civil Rights and Urban Affairs.

Photo of Jay Jensen Jay Jensen

Jay Jensen is an associate in the Labor Department and a member of the Employee Benefits & Executive Compensation Group.

Prior to joining Proskauer, Jay served as a staff attorney in the Tulane University Office of the General Counsel, advising the university on…

Jay Jensen is an associate in the Labor Department and a member of the Employee Benefits & Executive Compensation Group.

Prior to joining Proskauer, Jay served as a staff attorney in the Tulane University Office of the General Counsel, advising the university on a broad range of legal issues, including labor and employment, non-profit law and taxation, regulatory compliance, data privacy, and general business transactions.

Jay earned his J.D. from Tulane Law School, where he trained as a student attorney in the Civil Rights and Federal Practice Clinic and received best speaker and brief awards competing in appellate moot court.

Before attending law school, Jay completed a graduate degree in Humanities and taught interdisciplinary college courses.