PBGC Proposes Premium Changes

July 22, 2013 (PLANSPONSOR.com) – The Pension Benefit Corporation (PBGC) issued a proposal it says is designed to make its premium rules more effective and less burdensome.

Based on its regulatory review under Executive Order 13563 (Improving Regulation and Regulatory Review), PBGC proposes to amend its regulations on Premium Rates and Payment of Premiums to simplify due dates, coordinate the due date for terminating plans with the termination process, make conforming and clarifying changes to the variable-rate premium rules, provide for relief from penalties, and make other changes. Large plans would no longer have to pay flat-rate premiums early; small plans would get more time to value benefits.

The agency said these amendments would be effective starting 2014. It is also proposing to amend its regulations in accordance with the Moving Ahead for Progress in the 21st Century Act (MAP-21). MAP-21 called for $9 billion in pension plan premium hikes (see “Congress Passes Bill with Pension Funding Relief”).

The PBGC’s proposed rule will be published in the Federal Register on July 23. It can be viewed from here.