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PBGC Adopts Uniform Premium Due Date

March 19, 2014

Authors

Hal Morgan

PBGC Adopts Uniform Premium Due Date

March 19, 2014

by: Hal Morgan

In the latest step of a rulemaking process begun in 2013, on March 11 the Pension Benefit Guaranty Corporation published a final rule which provides that both flat rate and variable rate premiums for small defined benefit plans will be due 9½ months after the beginning of the plan year for which they are payable.  This change, which eliminates the system under which premium due dates varied based on the type of premium and the size of the plan, will accelerate the premium due date for small plans, which has been four months after the end of the premium payment year, by 6½ months.  While the final rule is applicable for 2014 and later plan years, a transition rule provides a four month delay in the new due date for small plans for the first plan year beginning after 2013 in order to ease potential cash flow problems

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PBGC Simplifies Premium Payments for Large Plans

January 7, 2014

Authors

Hal Morgan

PBGC Simplifies Premium Payments for Large Plans

January 7, 2014

by: Hal Morgan

On January 3, 2014, the Pension Benefit Guaranty Corporation published a rule changing the due date for flat rate premium payments by large defined benefit plans with 500 or more participants. Effective immediately for plan years beginning on or after January 1, 2014, the flat rate premium for large plans will be due 9½ months after the beginning of the plan year, which is the same date that the variable rate premium is due. As a result, the flat rate premium for large calendar year plans will be due on October 15, 2014.

This change should simplify the administration of premium payments for large plans and reduce potential penalties and interest for late payments. Previously, large plans have been required to pay the flat rate premium by the end of the second month of the plan year. Since the flat rate premium is generally based on

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PBGC Premium Rates Increase in 2014 for Single-Employer Plans – Time to Cash-out Some Deferred Vested Participants?

November 15, 2013

Authors

benefitsbclp

PBGC Premium Rates Increase in 2014 for Single-Employer Plans – Time to Cash-out Some Deferred Vested Participants?

November 15, 2013

by: benefitsbclp

Earlier this month, the Pension Benefit Guaranty Corporation (“PBGC”) announced the flat and variable premium rates that defined benefit pension plans must pay in 2014.

  • Single-employer plans. The flat rate premium for 2014 is $49 per participant. This is a $7 per participant increase from 2013. The variable premium rate will increase in 2014 to $14 per every $1,000 in unfunded vested benefits, with a cap of $412 per participant, which is an increase in the variable premium rate of $9 in 2013. Note that smaller plans may be subject to a lower per participant cap on the variable premium rate.
  • Multiemployer plans. The flat rate premium rate for these plans is $12 a participant in 2014, which remains unchanged from 2013. Multiemployer plans do not pay a variable rate premium.

With these premium increases on the horizon for single-employer plans, this may be a good time to

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