Following are answers to questions frequently asked by employers and pension professionals regarding PBGC premiums. If you do not find the answer to your particular question, please see the premium instructions or contact our customer service representatives for assistance at the addresses and telephone numbers listed below.
- What are the current premium rates for PBGC-insured plans?
- When must premiums be filed?
- Who must file premiums?
- Where should premium forms and payments be sent to PBGC?
- Where should inquiries be directed?
- When should I call the Premium Problem Resolution Officer?
- How may I ensure that my premium filings and payments are submitted on time?
- Does an IRS Extension for Form 5500 extend my PBGC premium filing due date?
- Why are Statements of Account and Past Due Filing Notices issued?
- How are penalty and interest computed on Statements of Account?
- Why is there an interest charge for underpayment or late payment of estimated premiums?
- How do the request for penalty waiver and request for reconsideration processes work?
- If I have overpaid my premium, can I take a credit versus a refund?
- How are refunds issued? What action should be taken if the plan did not receive a requested refund?
- Why did I receive less than the amount of the refund that I requested or no refund at all even though I overpaid my premium?
- Are there refunds available for "overlapping" premium payments resulting from a plan merger, consolidation or spinoff?
- What are the premium payment rules regarding terminating plans and why are payment notices sometimes sent to terminated plans?
- Why do I continue to receive premium filing booklets for my terminated plan, and how do I stop this mailing?
PBGC PREMIUMS
1. What are the current premium rates for PBGC-insured plans?
Currently, all PBGC-insured single-employer defined benefit pension plans pay a flat-rate charge of $19 per participant per plan year. Underfunded single-employer plans pay an additional variable-rate premium of $9 for every $1,000 (or fraction thereof) of unfunded vested benefits.
The premium rate for PBGC-insured multiemployer plans is $2.60 per participant per plan year.
Additional information on PBGC premium rates can be found in PBGC's Premium fact sheet or the more detailed Premium Payment Package.
2. When must premiums be filed?
All plans must file the Annual Premium Payment Form (Form 1) and make premium payments by the 15th day of the eighth full calendar month following the month in which the plan year began ("Final Filing Due Date"). In addition, large plans (that is, those required to report 500 or more participants on the preceding year's Form 1) must file the Estimated Premium Payment Form (Form 1-ES) and pay the estimated premium by the last day of the second full calendar month following the close of the preceding plan year ("First Filing Due Date").
Following is a general table of due dates for Form 1-ES and Form 1. A due date that falls on a weekend or federal holiday is extended to the next regular business day. See the instructions for Form 1-ES due dates applicable to a plan that does not begin on the first of a month.Plan Year Begins First Filing Due Date Final Filing Due Date January 1 February 28 September 15 February 1 March 31 October 15 March 1 April 30 November 15 April 1 May 31 December 15 May 1 June 30 January 15 June 1 July 31 February 15 July 1 August 31 March 15 August 1 September 30 April 15 September 1 October 31 May 15 October 1 November 30 June 15 November 1 December 31 July 15 December 1 January 31 August 15
For example, if a plan has a plan year beginning January 1st and the plan was required to report 1,000 participants on its 1998 Form 1, the Form 1-ES for the 1999 plan year must be filed by 3/1/99 (because 2/28/99 falls on a Sunday) while the Form 1 filing due date is 9/15/99.Large plans pay only the flat-rate premium by the First Filing Due Date, and may pay an estimate if the actual amount is not yet known. The variable-rate premium is due by the Final Filing Due Date. All large plans that pay an estimate by the First Filing Due Date must make a reconciliation filing using the Form 1 by the Final Filing Due Date, even if they owe no additional premiums.
Small plans (that is, those required to report fewer than 500 participants on the preceding year's Form 1) and new and newly covered plans do not have to file a Form 1-ES. Instead, they file their Form 1 and pay the entire premium due by the Final Filing Due Date.
See Part C in the Premium Payment Package for a full list of the Form 1-ES and Form 1 filing due dates and for other filing due date information.
The plan administrator of each PBGC-insured single-employer plan and multiemployer plan is required annually to file the Form 1 and, if applicable, Form 1-ES, and pay the premium due. PBGC insures most private-sector defined benefit pension plans in accordance with Section 4021 of ERISA. If you are uncertain whether your plan is covered, you should promptly request a coverage determination by calling our customer service representatives for coverage issues at 202/326-4000 or writing to PBGC, Technical Assistance Branch, Suite 930, 1200 K Street NW, Washington, DC 20005-4026. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. A request for a coverage determination does not extend the due date for any premium that is finally determined to be due. If PBGC determines that a plan is not covered, we will review the plan's premium payments to determine whether any refunds may be made.
ADDRESSES AND PHONE NUMBERS
4. Where should premium forms and payments be sent?
It is very important that the premium forms and payments be sent to the right place. If you are unsure of where to send your form and payment, please contact PBGC for clarification ( click here for the telephone numbers and addresses of PBGC's customer service representatives).
Send premium forms to:
Pension Benefit Guaranty Corporation
P.O. Box 64880
Baltimore, MD 21264-4880
If you pay by check, send the check with the premium form. Write the plan's EIN/PN, and the date the premium payment year began, on the check.
If you pay by wire transfer, send the wire transfer to:
First National Bank of Maryland
Baltimore, Maryland
ABA: #052000113
Account: #425-5265-5
Beneficiary: PBGC
Reference: (give plan's EIN/PN and date the premium payment year began)
Mailing addresses for payments and filings for the Missing Participants Program, plan terminations, and plan coverage requests may be found in PBGC's FAQs on Plan Terminations.
5. Where should inquiries be directed?
For premium-related inquiries and requests (e.g., requests for premium filing forms, premium booklets, premium refunds, or reconsideration of premium penalty assessments, questions about Statements of Account and Past Due Filing Notices, and other premium filing matters):
Call 202-326-4242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number listed above (202-326-4242).
Write:Pension Benefit Guaranty Corporation
P.O. Box 64916
Baltimore, MD 21264-4916
See PBGC's FAQs on Plan Terminations for the appropriate telephone number and address for plan termination and coverage inquiries and requests, including questions about the Missing Participants Program.
6. When should I call the Premium Problem Resolution Officer?
If you have premium questions, problems or requests, you should first call our premium payer customer service representatives (202-326-4242), who have access to the information needed to respond to your inquiry or request. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. If you still need assistance afterward or if you have a complaint about the service you have received, please contact the Premium Problem Resolution Officer at 202-326-4136 or via E-mail. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. If you prefer to write, send your letter to:
Pension Benefit Guaranty Corporation
Problem Resolution Officer (Premiums)
1200 K Street NW, Suite 670
Washington, DC 20005-4026
When calling or writing, please provide the following information about the plan in question: plan name, EIN/PN (Employer Identification Number/Plan Number), PYC (plan year commencement date) and the name of the customer service representative with whom you previously worked. This information will help to resolve the issue as quickly as possible.
TIMELY SUBMISSION OF PREMIUM FILINGS AND PAYMENTS
7. How may I ensure that my premium filings and payments are submitted on time?
To ensure the accurate and timely posting of your payment, you must make a separate payment for each filing. If you pay by check, write the plan's EIN/PN, and the date the premium payment year began, on the check. If you pay by wire transfer, include the plan's EIN/PN, and the date the premium payment year began, in the wire transfer instructions (as noted in Premium FAQ 4 above). It is also important that the premium filing be mailed to the correct lockbox address. All premium filings for current or prior plan years must be mailed to the lockbox address currently in effect. The current premium filing address is:
Pension Benefit Guaranty Corporation
P.O. Box 64880
Baltimore, MD 21264-4880.
PBGC considers that you filed your premium filing on the date the envelope is postmarked by the United States Postal Service. We will disregard any private postage meter date. If the envelope does not have a legible Postal Service postmark, we will consider that you filed the form three days before we received it.
8. Does an IRS Extension for Form 5500 extend my PBGC premium filing due date?
No. An extension granted a plan by the Internal Revenue Service for filing the Form 5500 series does not extend the filing due date for the PBGC Form 1 premium filing. The Form 1 may be prepared using data expected to be reported on the Form 5500 (including Schedule B). If the data subsequently reported on the Form 5500 differ from those used on your premium filing, an amended premium filing must be submitted with the revised data.
STATEMENTS OF ACCOUNT AND PAST DUE FILING NOTICES
9. Why are Statements of Account and Past Due Filing Notices issued?
Statements of Account (SOA) are issued for premium, penalty, and interest amounts owed to PBGC as a result of late payment or underpayment of premiums. To ensure that the amount due does not increase, the premium and interest must be paid within 30 days of the SOA's issue date. If the SOA appears to be in error, contact our premium payer customer service representatives (202-326-4242). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. In some cases, it may be necessary to submit an amended filing to clear up the problem that caused the erroneous SOA to be issued.
Past Due Filing Notices are issued when PBGC's records indicate that a plan's premium filing form is missing for a particular plan year. If the Past Due Filing Notice appears to be in error (e.g., the premium filing was made or the EIN/PN is incorrect), contact our premium payer customer service representatives (202-326-4242). Please see the preceding paragraph for the TTY/TDD telephone number. It may be necessary to submit an amended filing to correct the error. For issues involving a plan's termination, you may be referred to PBGC's customer service representatives for plan termination issues (202-326-4000). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. Premium and interest cannot be waived. Late payment penalties may be waived depending on the facts and circumstances ( see the answer to Question 12 for details on waiver requests).
10. How are penalty and interest computed on Statements of Account?
For filings for plan years beginning before 1996, a late payment penalty of 5% of the unpaid premium is assessed each month (or portion of a month) the amount remains outstanding, subject to a minimum of $25 and a maximum of 100% of the unpaid premium. Starting with filings for the 1996 plan year, the late payment penalty charge is lower for premium underpayments that are "self-corrected." The penalty rate is 1% of the late premium payment for each month overdue if the late payment is made on or before the date when PBGC first issues a written notification indicating that there is or may be a premium delinquency (e.g., a Statement of Account (SOA), Past Due Filing Notice, or letter initiating an audit). The normal penalty rate of 5% per month applies to under-payments not "self-corrected." The same minimum and maximum rules apply in either case as for pre-1996 plan years.
Interest charges are assessed for any premium amount not paid when due, whether because of a late filing, a low estimated participant count, an erroneous participant count, or some other mistake in computing the premium owed. If interest is charged, it must be paid within 30 days of the SOA's issue date or it will continue to accrue. (Interest will also continue to accrue if any portion of the premium remains unpaid.) The interest rate charged is established on a quarterly basis and the interest rates are published on or about the 15th of January, April, July, and October in the Federal Register. These interest rates are also posted on PBGC's World Wide Web site. Interest is compounded daily.
11. Why is there an interest charge for underpayment or late payment of estimated premiums?
Our regulations require a large plan to pay the full final amount of its flat-rate premium by the end of the second month of the plan year -- not an estimate. We accept an estimate because we realize that plans may not know the final amount by the early filing date. For the same reason, we waive the underpayment penalty if a plan meets certain "safe harbor" requirements--payment by the end of the second month of the plan year of either (1) 90% of the flat-rate portion due for the current plan year or (2) 100% of the flat-rate portion that would be due using the previous plan year's participant count; and payment by the reconciliation filing date of 100% of the flat rate portion. PBGC has no authority to waive interest on premium amounts not timely paid, so we must charge interest on any shortfall from the full amount due even if the estimated payment meets the "safe harbor" requirements for relief from the penalty.
REQUEST FOR PENALTY WAIVER
12. How do the request for penalty waiver and request for reconsideration processes work?
The process typically begins after the receipt of a Statement of Account (SOA). If you believe that the Statement of Account resulted from an error, call our premium payer customer service representatives at 202-326-4242 to resolve the error. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. If this does not resolve the matter to your satisfaction, you may request a waiver of the penalty charge by sending your written request to:
Pension Benefit Guaranty Corporation
P.O. Box 64916
Baltimore, MD 21264-4916.
PBGC has no authority to waive premium and interest charges.
You should document the reasons for requesting a waiver of penalty. PBGC will consider the facts and circumstances and send the plan administrator a written response, generally within 90 days after the request. If the penalty waiver request is denied, you may request reconsideration of PBGC's initial determination to deny the request for waiver of the penalty. PBGC will consider the request for reconsideration independently and will respond to you in writing. This response will be the agency's final determination on the matter.
REFUNDS/CREDITS
13. If I have overpaid my premium, can I take a credit versus a refund?
When you have overpaid your premium (for example, the participant count reported on your Final premium filing is lower than that reported on your Estimated filing), you have the option of taking a credit on a subsequent year's premium filing form or requesting a refund. Refunds are made by wire transfer to the premium payer's account. You can request a refund by providing the wire transfer information for the refund on the Form 1 or by submitting a separate written request including the wire transfer information. (If you are requesting a refund on an amended filing for a pre-1998 plan year, you may check the refund box on the Form 1 and write in the wire transfer information or include it in an attachment to the amended filing.) Whether you choose a credit or a refund, the overpayment first must be applied toward any premium, penalty and interest that are owed for the current or any prior plan year. This may result in less of an overpayment available for a refund or credit. If you are unsure as to whether any premium, penalty and interest amounts are owed (for example, because of interest charges due to an increase in participant count), contact our premium payer customer service representatives (202-326-4242) to determine whether the overpayment is fully available for a refund or a credit. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence.
If PBGC determines that a requested refund is due, the plan administrator will receive a letter from PBGC confirming that the refund will be forthcoming. Included with this letter will be an account history describing how the overpayment was used to satisfy any outstanding premium, interest, or penalty amounts. The refund will subsequently be issued by the U.S. Treasury, via electronic wire to the bank you designate (based on the bank routing number and bank account number included with your request for a refund).
If you have not received the refund within 60 days after you receive the PBGC refund letter, contact PBGC's premium payer customer service representatives (202-326-4242). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence.
Overpayments are refunded only if there are funds remaining after all outstanding premium, penalty and interest charges are first satisfied. Refund-related questions should be directed to our premium payer customer service representatives at 202-326-4242. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence.
In some of these situations, there can be "overlapping" premiums, but in others there can be "gaps" in premiums. Refunds are not available for overlapping premium payments resulting from a plan merger, consolidation or spinoff (nor does PBGC charge for any "gaps" that may result). Refunds may be available, however, for the following short plan year situations: plans filing for the first time, plans that have changed their plan years, and plans that have been terminated. See Parts B & C of the Premium Payment Package for more details.
PREMIUMS FOR TERMINATED PLANS
The obligation to pay premiums does not cease immediately on a plan's termination date. The obligation to file premium forms and payments continues until the end of the plan year in which (1) plan assets are distributed in satisfaction of all plan benefits or (2) a trustee is appointed under ERISA Section 4042. This means that a full year's premium must be paid through the plan year in which one of these occurrences takes place. As a result, terminated plans may receive Past Due Filing Notices if a required premium filing is missing or Statements of Account if a required premium is late or insufficient.
Terminated plans may still owe premiums, as described in the answer to Question 17, and, therefore, may still receive premium filing booklets for this purpose. If, however, you believe no further premiums are due for your plan, contact PBGC's premium payer customer service representatives (202-326-4242). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the number in the preceding sentence. If there are no further premiums due for the plan, the booklet mailing will stop with the following year's mailing.