Each year, defined benefit (DB) pension plan sponsors must pay pension insurance premiums to the Pension Benefit Guaranty Corporation (PBGC). In light of large PBGC premium rate increases in 2013 and future years, plan sponsors should carefully evaluate their options before proceeding with their next premium payment. Background There are two components to annual PBGC […]Read More… from Evaluating PBGC Premium Options in Advance of Big Increases
In what has become an annual rite of winter, the PBGC recently released PBGC Technical Update 13-1 extending relief from the proposed amendments to the reportable events regulations for certain small pension plans. However, unlike previous years’ relief, the new technical update provides guidance for all plan years after 2012 (or until new proposed or […]Read More… from Déjà Vu All Over Again: PBGC Extends Reportable Event Relief for 2013 and Beyond
The “Moving Ahead for Progress in the 21st Century” (MAP-21) legislation signed into law last week included significant pension law changes. These included good news and bad news for sponsors of defined benefit pension plans. The good news is that MAP-21 provided some relief from the historical low interest rate environment. The funding segment interest […]Read More… from MAP-21: Good News & Bad News for Pension Plans
In this post we highlight three new PBGC premium relief items: 1. Seven Day Rule – for waiver of late premium penalties in 2011 and later. 2. “Alternative” premium method election relief – for 2010 and later years. 3. Waiver of certain “alternative” method penalties – for 2008 and 2009. Below is a detailed summary […]Read More… from What’s New with PBGC Premium Relief
During the plan termination process, one issue often overlooked is the consequences of investment risk prior to paying out benefits. This can lead to disastrous results. Benefits may be fully-funded when the termination decision is made, but significant contributions will be required if assets are not invested conservatively and a market downturn occurs prior to […]Read More… from Pension Plan Termination Investment Strategies
Many small pension plans are exempt from PBGC pension insurance coverage. These include “substantial owner” plans, where all participants in the plan own (directly or indirectly) more than 10% of the corporation’s stock. This post highlights what happens when the classification of a “substantial owner” plan changes, and what happens next. We often see “substantial […]Read More… from When Small Pension Plans Move In and Out of PBGC Coverage
The proposed 2012 federal budget contains an interesting provision which could dramatically change how PBGC premiums are determined. Here are the main aspects of the proposal: – Gives the PBGC authority to set and adjust premium rates as it sees fit. Currently the PBGC does not have this power, so the change would give the […]Read More… from Proposed Changes to PBGC Premiums
As we mentioned in our blog post yesterday, the segment interest rates used for PBGC purposes are historically low right now. The previous post provided details of how this could affect the liabilities reported in the 2010 Annual Funding Notice to participants. This post highlights the impact on plan sponsors’ PBGC variable rate premiums (VRPs) […]Read More… from Pension Plans May Face Higher 2011 PBGC Variable Premiums Due to Low Interest Rates
As many plan sponsors and benefits practitioners were hoping for, the PBGC recently released Technical Update 10-4 which provides guidance on how to comply with the proposed amendments to the reportable events regulations for the 2011 plan year. The conclusions are very similar to Technical Updates 09-1, 09-3, and 09-4 which provided guidance for the […]Read More… from 2011 PBGC Reportable Event Waivers
The IRS just published the retirement plan limits for 2011. Most of the limits for retirement plans are unchanged – again. They’re the same as 2009 and 2010: Maximum annual pension plan benefit $195,000 Maximum annual addition for defined contribution plans 49,000 Maximum 401(k) elective deferral 16,500 Maximum catchup contribution (age 50 and over) 5,500 […]Read More… from 2011 IRS Pension Limits and Social Security Wage Base
