Retirement Plans Newsletter

BULLETIN
September 23, 2020

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[Official Guidance]

Text of PBGC Technical Update 20-2: Extended Due Date for Inclusion of Prior Year Contributions

"This Technical Update provides [PBGC] guidance and relief related to the timing of contribution receipts includable in the asset value used to determine variable rate premiums due in 2020. The CARES Act extended the due date for certain pension contributions. The relief in this Technical Update will generally enable plan sponsors to take advantage of the CARES Act extension and still ultimately pay the same variable-rate premium they would have owed had the plan received all prior year contributions by the regular contribution due date....

"For premium filings due on or after March 1, 2020 and before January 1, 2021, the date by which prior year contributions must be received by the plan to be included in plan assets under Section  4006.4(c) of PBGC's premium rates regulation is extended to January 1, 2021.

"Because of this relief, the discounted value of a 'prior year contribution' received after the premium is filed and on or before January 1, 2021, may be included in the asset value used to determine the variable-rate premium. Thus, if such a contribution is made, the premium filing may be amended to revise the originally reported asset value and resulting variable-rate premium.

"This relief has no effect on premium due dates (e.g., for calendar year plans, the 2020 premium is due October 15, 2020) and does not permit a premium filing to reflect a contribution that has not yet been made....

"Plan administrators that want to take advantage of this relief must amend their premium filing by February 1, 2021, to revise the variable-rate premium data accordingly after eligible prior year contributions are received by the plan." Icon to read more

Pension Benefit Guaranty Corporation [PBGC]

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Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

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