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Member, Beacon International Group, Ltd.
The Pension Benefit Guaranty Corp. is reminding pension plan sponsors that PBGC premium payments for employers with calendar year plans are due Oct. 15.
All plan sponsors will have to pay the so-called flat rate premium, which in 2015 is $57 per participant, while employers with underfunded plans also pay the so-called variable rate premium, which this year is $24 per $1,000 of unfunded vested benefits, with a $418 per participant cap.
For plan sponsors with non-calendar year plans, the premium payments are due 9 ½ months after the start of the plan year.
The PBGC advises plan sponsors to file sooner than Oct. 15, if possible. “We expect high filing activity leading up to October 15, 2015 (many plans have an October due date), so please file as soon as practicable,” the agency said in a notice Wednesday.
Aside from premium payments, employers, in a new requirement that was finalized earlier this year by federal regulators, will have to disclose offers they made to plan participants to convert their monthly pension annuity to cash lump sums and transactions in which they purchased group annuities from insurers who took on the liability of providing benefits to certain plan participants.
That requirement will apply to lump sum benefit offers and annuity purchases that occurred in 2014 and those in 2015 that occurred 60 days prior to when plan sponsors made their PBGC premium payments.
In fiscal 2014, employers paid the PBGC $3.9 billion in premiums, up from $3 billion in fiscal 2013.
A big reason for the hike in premium income was legislation Congress passed earlier that boosted both the flat-rate and the variable-rate premium.
The Pension Benefit Guaranty Corp. said Monday it is taking over and terminating an underfunded pension plan sponsored by Standard Register Co., a Dayton, Ohio-based printing and marketing communication firm.