In an earlier post, we highlighted how the PBGC was rejecting a number of 2009 pension insurance premium filings because plan sponsors had completed the forms incorrectly. New rules effective in 2009 allow plan sponsors to make an election to use an Alternative Premium Funding Target (APFT) instead of the Standard Method. Many plan sponsors intended to make the APFT election, but they didn’t correctly fill out the PBGC form which documents this choice.
After much pressure from plan sponsors, industry organizations, and congressmen, the PBGC finally relented on Tuesday and released a statement saying that they would be providing limited relief to plan sponsors who:
- Filed their PBGC premium forms on time;
- Used the APFT to determine their Variable Rate Premium (VRP); and
- Checked the box on Line 7(d)(1) indicating that the APFT was used.
If a plan sponsor satisfies these conditions but forgot to check Box 5, then they get relief from the PBGC and won’t have to pay the Standard Method VRP or pay late interest penalties. No other documentation will be required, but relief must be requested within 30 days.
[…] Background: For 2007 and later, plan sponsors could elect to use an “alternative” method to calculate their variable rate premium (VRP). However, the method to make this election involved a two-step process that included checking the infamous Box 5 (more details in previous post). The PBGC previously offered one-time relief in 2010 for Box 5 errors. […]