A new guidance document released by the Pension Benefit
Guaranty Corporation (PBGC) outlines the process for measuring and paying the two kinds of annual premiums owed by pension plan sponsors.
As PBGC explains, flat-rate premiums apply to all plans, while
the variable-rate premiums apply only to single-employer plans. Every covered
plan under Employee Retirement Income Security Act (ERISA) section 4021 must
make a premium filing each year. The due dates are described in the “When to
The guidance outlines how plan sponsors must use the My Plan
Administration Account portal to electronically submit premium filings in accordance
with PBGC’s regulations. Electronic filings may be prepared using the data
entry screens or with compatible private-sector software. See the “How to File”
section for more information.
The PBGC document further provides instructions for each
data element that must be reported. If plan sponsors are filing for a previous
year, they must follow the instructions for that year, available from the “Premium
Payment Instructions and Addresses” webpage.
According to PBGC, the filing requirements for 2017 are
almost identical to the filing requirements for 2016. The key changes to note
for 2017 relate to changes in premium rates. For example, concerning the flat-rate
premiums, PBGC says the per-participant flat-rate premium rate for
single-employer plans is now $69, up from $64. For multiemployer plans the rate
is $28, up from $27. For variable-rate premiums, the rate per $1,000 of
unfunded vested benefits is $34, up from $30.
There is a new cap on variable-rate premium, PBGC explains. The
cap is now $517 times the number of participants, up from $500 times the number
of participants. In addition, a new section has been added providing additional
guidance about determining premiums in a year when a plan is involved with a spinoff,
merger or consolidation.
“We added this section because we’ve encountered several
situations where premiums for these plans were not determined properly,” PBGC
notes. “To avoid the possibility of late payment charges, we encourage you to
read this new section in its entirety if your plan is involved in any of these
The full instructions are available for download here.