The Pension Benefit Guaranty Corporation (PBGC) has submitted to the Office of Management and Budget for its approval the Comprehensive Premium Filing Instructions for 2020. They include a summary of the key changes from the 2019 Comprehensive Premium Filing Instructions.
The instructions provide information for plans paying premiums for plan years beginning in 2020, including instructions for each data element that must be reported.
About Filing
Every covered plan under ERISA Section 4021 must make a premium filing each year. There are two kinds of annual premiums: the flat-rate premium, which applies to all plans, and the variable-rate premium, which applies only to single-employer plans.
Electronic filing is mandatory for all plans. My Plan Administration Account (My PAA) is a secure web-based application that enables pension plan professionals to electronically submit premium filings to the PBGC in accordance with its regulations. Electronic filings may be prepared using My PAA’s data entry screens or with compatible private-sector software.
If filing for a previous year or amending a filing for a previous year, the instructions for that year must be followed. However, because contact information and information about electronic funds transfers change periodically, the most recent information should be used instead of the information included in an instructions booklet for a prior plan year.
What’s New
The filing requirements for 2020 are almost identical to those for 2019. The key changes to note for 2020 are the following:
Changes in Premium Rates
| Type of Plan | Flat-Rate Premium, 2020 | Flat Rate Premium, 2019 | Variable-Rate Premium, 2020 | Variable-Rate Premium, 2019 |
Single-employer |
$83 per participant | $80 per participant | $45 per $1,000 of unfunded vested benefits capped at $561 times the number of participants |
$43 per $1,000 of unfunded vested benefits capped at $541 times the number of participants |
| Multiemployer | $30 per participant | $29 per participant | N/A |
N/A
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Risk transfer activity. The PBGC simplified the reporting requirements regarding lump sum windows and annuity purchases and reinstated the question about lump sum windows for retirees.
Premium proration. The PBGC clarified the rules about when (and how) premiums are prorated. In doing so, it:
- moved the information about prorating from the “Who Must File” and “Description of Data Elements” sections into a new stand-alone section called “Premium Proration”;
- added a new defined term (i.e., Short Coverage Year) to distinguish a situation in which a plan is covered by the PBGC for only a portion of its plan year from a situation in which the plan year is less than 12 full months (i.e., a Short Plan Year); and
- added some examples to illustrate how the proration calculation works.
Certifying Filing. The PBGC eliminated the requirement to include the date the plan administrator certified the filing in the XML file when using private-sector software.
Coverage Determinations. The PBGC added some information about coverage determination requests. The PBGC says that changes in the “Who Must File” section include the instructions for item 13 for plans that believe PBGC coverage has ceased.
Date Plan Year Ends. The PBGC clarifies that, regarding a plan that ceases PBGC coverage during the plan year, the date to be reported as the “date plan year ends” is still the end of the plan year, not the date coverage ceased.
Participant Count Date. The PBGC clarified the rules about the situations that result in the participant count date being the first day of the premium payment year instead of the last day of the prior premium payment year.
Additional Example. The PBGC added an example in the “Spinoffs, Mergers, and Consolidations” section to clarify the impact on premiums of a non de minimis beginning of year transfer of assets and liabilities from one plan to another plan.
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