PBGC Instructions for Filing 2020 Premiums Available

The Pension Benefit Guaranty Corporation (PBGC)’s Comprehensive Premium Filing Instructions for 2020 plan years are now available. The PBGC announced on Jan. 10 that the Office of Management and Budget has approved the instructions and they are now available on the PBGC website.

My Plan Administration Account (My PAA), a secure web-based application that enables pension plan professionals to electronically submit premium filings to the PBGC, is not ready to accept filings yet. The PBGC says, however, that My PAA “will be ready to accept 2020 filings very soon.” Electronic filing is mandatory for all plans; electronic filings may be prepared using My PAA’s data entry screens or with compatible private-sector software.

What’s New

The PBGC says that the filing requirements for 2020 are almost identical to those for 2019. The key changes for 2020 are as follows.

Flat-Rate Premium Rates

 

Type of Plan	Flat-Rate Premium 2020	Flat-Rate Premium 2019	Change 2019-20
Single-Employer Plan	$83	$80	+$3
Multiple-Employer Plan	$30	$29	+$1

Variable-Rate Premium Rates

 

Type of Plan	Variable-Rate Premium 2020	Variable-Rate Premium 2019	Change, 2019-20	Cap 2020	Cap 2019	Change in cap, 2019-2020
Single-Employer Plan	$45	$43	+$2	$561 x number of participants	$541 x number of participants	+$20
Multiple-Employer Plan	N/A	N/A	N/A	N/A	N/A	N/A

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. This entailed:

• Moving the information about prorating from the “Who Must File” and “Description of Data Elements” sections into a new stand-alone section called “Premium Proration”;
• Adding a new defined term (i.e., “Short Coverage Year”) to distinguish a situation where a plan is covered by PBGC for only a portion of its plan year from a situation where the plan year is less than twelve full months (i.e., a “Short Plan Year”); and
• Adding 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.

Date Plan Year Ends

The PBGC clarified 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.

A Caveat
 
The Comprehensive Premium Filing Instructions for 2020 plan years do not reflect changes that the SECURE Act made to the way premiums are determined for certain plans sponsored by cooperative and small employer charities. The PBGC says that premium-related guidance for those plans will be issued separately.