PBGC announces availability of 2014 premium filing instructions and My PAA for 2014 premium filings

The Pension Benefit Guaranty Corporation (PBGC) has announced the availability of the 2014 premium filing instructions, which contains changes reflecting recent PBGC final regulations that simplified the premium payment rules and My PAA for 2014 premium filings. The final regulations simplified and streamlined due dates, coordinated the due date for terminating plans with the termination process, made conforming changes to the variable-rate premium rules, clarified the computation of the premium funding target, reduced the maximum penalty for delinquent filers that self-correct, and expanded premium penalty relief.

The PBGC web pages showing premium due dates and interest rates used to determine the variable-rate premium have been updated to reflect the new regulations. In addition, My PAA has been modified to reflect the changes and is ready to accept 2014 filings. The PBGC reminds filers that the new rules have no impact on premium filings for plan years beginning in 2013 (e.g., small calendar plans whose 2013 premium filings are due April 30, 2014).

Changes in instructions consistent with PBGC final regulations

The due dates for many plans have been changed in the 2014 instructions, including the elimination of the early flat-rate premium filing for large plans, the acceleration of the due date for small plans, and, in some cases, the acceleration of the due date to streamline the premium filing process with the plan termination process. The variable-rate premiums for most small plans are now based on the prior year’s unfunded vested benefits (UVBs) (using the lookback rule) instead of the current year’s UVBs. However, the PBGC explains that small plans may opt out of the lookback rule for 2014 and subsequent years. Some new terminology (e.g., continuation plan and lookback rule) have been added and the meaning of some of the existing terminology has been revised.

Premium rate changes

The PBGC notes that changes in the flat-rate premium, the variable-rate premium, and the cap on variable-rate premiums are reflected in the instructions.
Other changes

A number of other key changes include a new payment option, participant count breakdown, business codes, and certification rules. Payments may now be made electronically at www.pay.gov, a secure, free, and user-friendly Federal website. The PBGC encourages filers to consider using this option to minimize the potential for errors. The participant count is now broken down into three categories: active participants, terminated vested participants, and retirees and beneficiaries receiving payments.

The instructions no longer include a listing of business codes. The codes will be posted on the “Premium Filings” section of the Practitioners Page in the PBGC website. The PBGC has modified the certification method for My PAA screen-prepared and imported filings to allow a plan administrator to certify an e-filing manually instead of having to log into My PAA and certify electronically. In addition, the PBGC notes that there are several minor changes, including changes that are likely to affect relatively few plans.

Source: PBGC website, April 15, 2014 and April 17, 2014.

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