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PBGC changes position on deferred contributions under CARES Act

Benefits Administration and Outsourcing|Executive Compensation|Health and Benefits|Retirement
COVID 19 Coronavirus

By Mike Pollack , Maria Sarli and Adam Wentz | October 16, 2020

Only those pension contributions made by January 1, 2021, and included as prior-year contributions may be included in the amended filing.

In late September, the Pension Benefit Guaranty Corporation (PBGC) announced that it will allow revised premium filings that reflect pension contributions delayed under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Technical Update 20-2, Extended Due Date for Inclusion of Prior Year Contributions provides further information on the timing of contribution receipts includable in the asset value used to determine variable-rate premiums due for 2020.

The CARES Act extended the due date for certain pension contributions that would otherwise be due in 2020 to January 1, 2021. PBGC premium filings for calendar-year plans are due by October 15, 2020. The PBGC guidance allows an amended filing to include additional prior plan-year contributions made after the premium filing due date for filings with due dates from March 1, 2020, through January 1, 2021.

Plan administrators will still need to file and pay premiums by their normal due dates; however, they will now be able to make an amended filing and request a refund or a credit toward future premiums once additional contributions have been made. Only those contributions made by January 1, 2021, and included as prior-year contributions may be included in the amended filing, and the contributions should be discounted in the same manner as for funding calculations.

Plan administrators who want to take advantage of this relief must amend their premium filing by February 1, 2021.

Authors

Senior Consulting Actuary

U.S. Retirement Resource Actuary


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