The Pension Benefit Guaranty Corporation (PBGC) announced Sept. 21 that it intends to provide new flexibility for variable-rate premium filers.
“This relief will support the Administration’s efforts to continue driving economic recovery and helping those in need,” said PBGC Director Gordon Hartogensis in a press release. He added that, “As COVID-19 continues to affect workers, families, and job creators across the country,” PBGC will continue to seek opportunities to provide relief.
What the Relief Does
The PBGC action updates guidance it issued on July 20 in question-and-answer format concerning how the Coronavirus Aid, Relief, and Economic Security (CARES) Act affects missed contribution reporting requirements and premium filings for single-employer plans.
Under the CARES Act, certain pension contributions that would otherwise be due during 2020 are due on Jan. 1, 2021. The CARES Act, however, did not provide any special rules related to PBGC premiums. Under the PBGC’s action, a premium refund will be available to account for employer contributions received by the plan during the extended period provided by the CARES Act.
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Under the PBGC’s action, for premium filings due on or after March 1, 2020, and before Jan. 1, 2021, the date by which “prior year” contributions must be received by the plan to be included in plan assets will be extended to Jan. 1, 2021. That means that the discounted value of such contributions received by the plan after the premium is filed, but on or before Jan. 1, 2021, will be included in the asset value used to determine the variable-rate premium.
Because of this relief, plans will be able to amend the premium filing to revise the originally reported asset value once all prior year contributions have been made, and receive the corresponding refund of variable-rate premiums.