Paying premiums to the Pension Benefit Guaranty Corp. could get simpler under a proposal announced Tuesday.
Corporate sponsors of single and multiemployer defined benefit plans with 500 or more participants would have one October due date for paying both flat-rate and variable-rate premiums, instead of the current two deadlines, in April and October, which require separate calculations. Smaller plans with less than 100 participants would see their due date shift to October from April. Plans in between would see no change.
Comments on the proposal are due by Sept. 23.
The proposal, published in the July 23 Federal Register, also would cut in half the maximum penalty for late premium payments that are self-corrected.
The proposed changes, which agency officials hope to implement in 2014, are part of an Obama administration directive to reduce regulatory burdens.
"If we can't cut the premiums, we can at least cut the hassle," PBGC Director Joshua Gotbaum said in a PBGC news release.
The changes were welcomed by plan sponsor groups.
“It's very practical. On the whole, it's simpler for everyone," said Judy Miller, director of retirement policy for the American Society of Pension Professionals and Actuaries, Arlington, Va., in an interview.
Deborah Forbes, executive director of the Committee on Investment of Employee Benefit Assets, Bethesda, Md., which represents more than 100 of the largest U.S. corporate pension funds with $1.5 trillion in assets, said in a statement that her members “applaud PBGC for recognizing the burden that multiple premium filings impose on plan sponsors.”
Single-employer pension plans pay a flat rate of $42 per participant, and a variable-rate premium of $9 per $1,000 of underfunding. Multiemployer plans pay $12 per participant per year. In fiscal year 2012, PBGC premium income increased to $2.7 billion from $2.2 billion in fiscal year 2011.