Following on a proposed regulation issued last year, the Pension Benefit Guaranty Corporation (PBGC) finalized one component of the proposed rule dealing with the due date for flat and variable rate premiums for large plans (plans with over 500 participants). Under prior regulations, large plans paid the flat rate premium early within their plan year and paid the variable rate premium later in the year. To simplify the due date and the work required to compute the flat and variable rate premiums, the PBGC finalized regulations providing for a single payment date. Under this new regulation, the PBGC premium due date would be 9 1/2 calendar months after the beginning of the plan year (October 15 for calendar year plans). The regulation became effective on January 3, 2014, and therefore creates a single premium due date for large plans beginning with those plan years commencing January 1, 2014. The PBGC also indicated that it would deal with other aspects of its 2013 proposed regulations in an additional final rule to be issued in the future. Click here for more information.
The PBGC followed through on that promise by issuing a further final regulation for small plans (100 or fewer participants). Small plans will have the same premium filing date as all other plans, 9 1/2 calendar months after the beginning of the plan year. The 2015 premiums for calendar year plans will be due October 15, 2015. The PBGC is also giving small plans time to adjust to the new schedule. For example, a calendar year small plans’ 2014 premiums will be due February 15, 2015, instead of October 15, 2014. Small plans generally will base their variable-rate premium on the prior year’s data; under prior rules, the data to calculate the premium may not have been available at the time the premium was due. Click here for more information.