New PBGC premium due date rule impacts small plans
For those defined benefit (“DB”) pension plans covered by the Pension Benefit Guaranty Corporation (“PBGC”), the PBGC has adopted a new uniform rule for premium due dates. This new rule is applicable for the 2014 and later plan years. Under the current rules, DB Plans covering less than 100 participants (i.e., small plans) have been able to pay their PBGC premiums as late as 4 months after the end of the year for which they are payable. Under the new rules, all DB plan sponsors will see premium payments due 9 ½ months after the beginning on the plan year for such they are payable. As such, this will accelerate the due date for small plans by 6 ½ months. Avoid penalties with awareness of these changes and proper planning.