As a result of Executive Order 13563 (Improving Regulation and Regulatory Review), the PBGC is moving the flat-rate premium due date for large plans to the same date as the variable-rate premium due date for such plans, starting with the 2014 plan year. Large calendar-year plans’ 2014 flat-rate premiums will be due October 15, 2014.
This action is part of a larger project to make PBGC premium rules more effective and less burdensome by simplifying due dates, coordinating the due date for terminating plans with the termination process, making conforming and clarifying changes to the variable-rate premium rules, and providing for relief from penalties, according to the PBGC. The rest of the project will be implemented by a separate final rule.
In recent years, premium due dates have depended on size of plan and type of premium. Large plans have paid the flat-rate premium early in the premium payment year and the variable-rate premium later in the year. Midsize plans have paid both the flat- and variable-rate premiums by that same later due date. Small plans have paid the flat- and variable-rate premiums in the following year.
In July 2013, the PBGC proposed to simplify the due-date rules by providing that all annual premiums for plans of all sizes will be due on the same day in the premium payment year, which is the historical variable-rate premium due date (see “PBGC Proposes Premium Changes”). As part of that simplification process, the new rule eliminates the separate due date for the flat-rate premiums of large plans beginning with the 2014 plan year.
The first large-plan flat-rate filing deadline for 2014 is February 28, according to a PBGC announcement about the new rule. Thus the provision of the proposed rule setting the flat-rate premium due date for large plans later in the year, is the most time-sensitive aspect of the proposal. For that reason, says the announcement, the PBGC is finalizing this one change separately and ahead of the other changes in the proposal.
The PBGC expects to deal with all other aspects of the July 2013 proposal in a separate final rule to be issued in time to provide all plans with adequate advance guidance for timely compliance with the new procedures in 2014.
The full text of the PBGC announcement can be downloaded here.