PBGC moves flat-rate premium due date for large plans to same date that variable-rate premium is due

The Pension Benefit Guaranty Corporation (PBGC) has issued a final regulation that makes the flat-rate premium due date for large plans the same date as the variable-rate premium due date for such plans, starting with the 2014 plan year. Thus, the 2014 flat-rate premiums for large calendar year plans will be due October 15, 2014.

In the regulatory preamble, the PBGC said that it believes that the change in the large-plan flat-rate premium due date “will produce a significant reduction in administrative burden” for both the plans and the PBGC. The due date change will mean that plan consultants can do all of a plan’s premium filing work at one time, once a year. The PBGC will receive one premium filing for each plan each year and will be able to process a plan’s entire annual premium in a single operation. Reducing the number of due dates will be simpler for all concerned, the PBGC said.

PBGC to finalize other changes later

In July 2013, the PBGC issued proposed regulations designed to make its premium payment rules more effective and less burdensome. The proposed regulations would, among other things, simplify due dates, coordinate the due date for terminating plans with the termination process, make conforming and clarifying changes to the variable-rate premium rules, and provide for relief from various penalties.

The provision of the proposed rule setting the flat-rate premium due date for large plans later in the year—on the same date as the variable-rate premium due date for such plans—is by far the most time-sensitive aspect of the proposal, the PBGC said. For that reason, and in light of the fact that this provision of the proposed regulations generated only positive comments, the PBGC is finalizing this one change separately and ahead of the other changes in the proposal. The PBGC said that it expects to finalize the remainder of the proposed rules, post the 2014 premium payment instructions (including illustrative forms), and make MyPAA available for 2014 filings “well before” the first filing deadline of October 15, 2014. Until then, the PBGC is not accepting 2014 filings.

Source: 79 FR 347, January 3, 2014.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer’s Benefits Reports.

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