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Administration January 6, 2025
PBGC Premiums Now Due Sooner Than in Past Years
Premiums for plan years beginning this year will generally be due one month earlier than provided in the PBGC’s payment of premiums regulation.
Reported by Remy Samuels
The Pension Benefit Guaranty Corporation issued a technical update on Monday, providing guidance on the timing of premium payments for pension funds with plan years beginning in 2025 and later.
A provision in the Bipartisan Budget Act of 2015 makes premiums for plan years beginning this year due one month earlier than the due date provided in the PBGC’s payment of premiums regulation, according to the announcement.
Section 502 of the BBA 2015 states that with respect to plan years beginning in 2025 and later, the premium filing due date for all plans is the 15th day of the ninth calendar month that begins on or after the first day of the plan year. A plan with a plan year beginning on January 1, 2025, for example, will have a premium due date of September 15, 2025. Before this provision took effect, the due date would have been October 15, 2025.
The BBA 2015 provision supersedes not only the normal premium due date rule for 2025 plan years, but also the special due date rules noted above. It does not supersede the PBGC’s disaster relief policy or the PBGC’s filing rules about due dates that fall on weekends or federal holidays.
All due dates for plan years beginning in 2025 can be found here on the PBGC website.
Plan administrators should disregard the premium filing dates provided in the PBGC’s payment of premiums regulation. According to the PBGC, corrected premium due dates will be incorporated into the 2025 comprehensive premium filing instructions, which will be posted in the near future.
For the past eight years, the president’s budget proposals have called for repealing Section 502 of the BBA 2015, to prevent plan sponsors from incurring unnecessary costs and burdens in preparation for making the accelerated premium payments.
According to the PBGC, the fiscal year 2025 budget characterized this repeal as “urgent” and noted that Congressional action was necessary to repeal the provision before fiscal year 2025. Although that did not happen, it is still possible that the provision will be repealed during the fiscal year. If repealed, the PBGC will revise premium filing instructions and notify practitioners “as quickly as possible.”