PBGC to let single employer plans delay variable-rate premium contributions

The Pension Benefit Guaranty Corporation (PBGC) said today it will let single employer plans delay variable-rate premium contributions as part of the Trump administration’s efforts to aid the COVID-19 economic recovery.

For premium filings due on or after March 1, 2020, and before January 1, 2021, the date by which “prior year” contributions must be received by the plan to be included in plan assets will be extended to January 1, 2021.

“That means the discounted value of these contributions received by the plan after the premium is filed but on or before January 1, 2021, will be included in the asset value used to determine the variable-rate premium,” the agency explained.

As a result, the PBGC said plans will be able to amend the premium filing to revise the originally reported asset value once all prior year contributions have been made and receive the corresponding refund of variable-rate premiums.

For this year, variable rate is $45 per $1,000 of unfunded vested benefits capped at $561 times the number of participants.

The number of participants affects whether variable-rate premiums are based on current or prior (i.e., “lookback”) year.

Multiemployer plans do not pay variable-rate premiums.

For more information, see PBGC’s FAQs for Covid-19 related questions.

READ MORE:

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• PBGC multiemployer insurance program deficit surges in 2019
• Multiemployer pension plans’ troubles worsening due to COVID-19