Pension plans have a lot of adjustments to make in order to comply with the PBGC premium payment rules, which the PBGC amended for plan years beginning in 2014 and beyond. And even if a plan does not owe the PBGC a premium, it still must make a premium filing.
Highlights of the changes the PBGC made are as follows.
- Due dates for many plans have changed.
- Variable-rate premiums for most small plans are now based on the previous year’s unfunded vested benefits instead of the current year’s. However, small plans may opt out of the lookback rule for 2014 and thereafter.
- The variable-rate premium per $1,000 of unfunded vested benefits is $14; the premium had been $9.
- The MAP-21 cap on the variable-rate premium cap is $412 x the number of participants; the cap had been $400.
- The per-participant flat-rate premium rate for single-employer plans is $49; it had been $42. The rate for multi-employer plans remains $12.
- Premium payments can be made electronically.
- Plan administrators can manually certify an e-filing instead of having to log onto the My Plan Administration Account (My PAA) site to do so electronically.
Under the new rules, the normal premium due date is the 15th day of the 10th month full calendar month in the plan year — generally Oct. 15 for calendar-year plans. This poses a challenge for small plans, for which the due date before 2014 was the last day of the 16th full calendar month after the end of the plan year before the one for which the premiums were being made — April 30 for small plans with a calendar-year plan year. Accordingly, the PBGC has issued transition rule for such plans.
John Iekel is Senior Writer and Editor for the ASPPA Net and NTSA Net portals.
- Log in to post comments