For a single-employer defined benefit plan, the deadlines for contributions run on two tracks: the minimum required contribution for a plan year must be deposited within 8½ months after that plan year ends, and plans that were underfunded in the prior year owe four quarterly installments during the current year on top of that. For a calendar-year plan, the annual deadline lands on September 15, and the quarterlies fall on April 15, July 15, October 15, and January 15. Miss either kind of deadline and the plan starts accruing interest, excise taxes, or both, with automatic benefit restrictions waiting if the shortfall pushes the plan’s funded status low enough.
The 8½-Month Annual Deadline
Every single-employer defined benefit plan has one non-negotiable date each year: the minimum required contribution must be paid within 8½ months after the close of the plan year.1eCFR. 26 CFR 1.430(j)-1 – Payment of Minimum Required Contributions A January-through-December plan year produces a September 15 deadline. A plan with a fiscal year ending June 30 has until the following March 15.
This date does not move for weekends, holidays, or the employer’s own tax-filing schedule. Once it passes without full payment, the plan carries an unpaid minimum required contribution and the penalty clock starts, regardless of why the money didn’t arrive.
Quarterly Installments for Previously Underfunded Plans
If the plan was not fully funded in the preceding plan year, the employer cannot wait until the 8½-month deadline to write a single check. Four quarterly installments come due during the current plan year.2Office of the Law Revision Counsel. 26 USC 430 – Minimum Funding Standards for Single-Employer Defined Benefit Pension Plans Plans that met or exceeded their funding target in the prior year skip the quarterlies entirely.
For a calendar-year plan, the four installments are due April 15, July 15, October 15, and January 15 of the following year. Each equals 25% of the required annual payment, which is the lesser of 90% of the current year’s minimum required contribution or 100% of the prior year’s minimum required contribution. The 100% prior-year option is only available when the preceding plan year was a full 12 months. Any balance left after the four installments still has to be deposited by the 8½-month final deadline.
A late quarterly does not immediately expose the employer to the excise-tax regime that follows a missed annual deadline. It does, however, trigger interest on the underpayment from the installment due date until the money actually arrives, at a rate equal to the plan’s effective interest rate plus five percentage points. That elevated rate makes stretching out a quarterly expensive even if the employer plans to catch up before September 15.
Funding Deadline Is Not the Deduction Deadline
The 8½-month funding deadline and the tax-deduction deadline are separate rules, and they often fall on different days. To deduct a plan contribution on the employer’s business return, the money must be in the plan by the due date of that return, including extensions. For a calendar-year C-corporation filing Form 1120, the unextended due date is April 15, and Form 7004 extends it by six months to October 15.3Internal Revenue Service. About Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns
September 15 governs whether the plan is legally funded. The extended tax return due date governs whether the deduction lands in the right year. A contribution made on September 20 satisfies the funding requirement on time but has to be in before the extended tax return deadline to be deductible for that plan year. It can also cut the other way: if the extended deduction deadline comes before September 15, a contribution made between the two dates still meets the funding obligation, it just cannot be deducted on that year’s return. Coordinate both calendars with the actuary and the tax preparer rather than treating them as one date.
What Happens if You Miss the Annual Deadline
The consequences of arriving late with the minimum required contribution escalate quickly.
Excise Taxes Under Section 4971
An employer that fails to pay the minimum required contribution by the 8½-month deadline owes a first-tier excise tax of 10% of the unpaid minimum required contributions remaining at the end of any plan year.4Office of the Law Revision Counsel. 26 USC 4971 – Taxes on Failure to Meet Minimum Funding Standards The 10% applies every year the deficiency sits unpaid, so it compounds. If the shortfall is still not corrected by the end of a defined taxable period, a second-tier tax of 100% of the unpaid amount applies. The employer reports and pays these excise taxes on IRS Form 5330.5Internal Revenue Service. Instructions for Form 5330
Federal Tax Lien at $1 Million
Once unpaid minimum required contributions plus interest exceed $1 million, a federal tax lien automatically attaches to the employer’s property under IRC Section 430(k). The lien reaches every member of the controlled group, not just the plan sponsor, and can encumber real estate, equipment, and accounts receivable.
PBGC Reporting
Underfunding also draws in the Pension Benefit Guaranty Corporation. If any plan in the controlled group has a funding target attainment percentage below 80%, the employer must file an annual financial report under ERISA Section 4010.6Pension Benefit Guaranty Corporation. One-Time 4010 Filing Waiver The PBGC waives the requirement when aggregate underfunding across all plans in the group is under $15 million, so it primarily hits mid-size and large sponsors. Severe or persistent underfunding can eventually lead the PBGC to terminate the plan and pay benefits only up to its statutory maximum.
Benefit Restrictions Triggered by Underfunding
Late or inadequate funding is not only an employer problem. Section 436 of the Internal Revenue Code imposes automatic restrictions on what the plan can pay out, keyed to the adjusted funding target attainment percentage (AFTAP), and those restrictions take effect without any action by the IRS or the sponsor.7Office of the Law Revision Counsel. 26 USC 436 – Funding-Based Limits on Benefits and Benefit Accruals
- Below 80% funded, the plan cannot be amended to increase benefits or add new ones, and lump-sum distributions are cut to the lesser of 50% of the participant’s otherwise-payable amount or the present value of the PBGC maximum guarantee.
- Below 60% funded, the plan cannot pay any lump sums or other accelerated distributions, benefit accruals freeze for everyone still working, and shutdown benefits and similar contingent-event benefits are blocked.
For a small professional-practice plan with an owner-participant, a bad market year combined with a late contribution can flip the AFTAP below one of these thresholds and lock up the lump-sum option right when the owner is planning to use it.
PBGC Premium and Participant-Notice Dates
Plan sponsors also owe annual PBGC premiums. For a calendar-year 2026 plan, the premium filing is due October 15, 2026, which is the 15th day of the 10th full calendar month of the plan year.8Pension Benefit Guaranty Corporation. Comprehensive Premium Filing Instructions for 2026 Plan Years Off-calendar plans use the same formula. Late premium filings accrue PBGC interest and penalty charges.
Plan administrators also owe participants an Annual Funding Notice. For most plans, the notice must go out no later than 120 days after the close of the plan year, so April 30 for a calendar-year plan.9U.S. Department of Labor. Field Assistance Bulletin No. 2025-02 – ERISAs Annual Funding Notice Requirements Following SECURE 2.0 Small plans (generally fewer than 100 participants) have until the earlier of the date the Form 5500 is filed or the latest date it is due including extensions. Failing to send the notice is an ERISA violation with penalties of up to $250 per day per affected participant.
Waivers and the Overcontribution Ceiling
An employer facing temporary substantial business hardship can petition the IRS Employee Plans division for a funding waiver under IRC Section 412(c).10Office of the Law Revision Counsel. 26 USC 412 – Minimum Funding Standards A granted waiver does not erase the contribution. The waived amount becomes an amortization base paid down over five plan years under Section 430(e), which raises the minimum required contribution in each of those years. Waivers are rarely granted and provide no relief from PBGC premium consequences.
The other boundary worth flagging is on the high side. Section 404 caps the tax-deductible defined benefit contribution for a given year, and any excess carries forward but triggers a 10% excise tax under Section 4972 for each year it remains nondeductible.11Office of the Law Revision Counsel. 26 USC 404 – Deduction for Contributions of an Employer to an Employees Trust or Annuity Plan and Compensation Under a Deferred-Payment Plan Contributing on time is the goal; contributing well past the deductible limit creates its own penalty track.