ERIC Victory: PBGC Follows ERIC Request to Reconsider Guidance on Premium Relief

Yesterday, the PBGC announced that it is changing previous guidance on delayed contributions to allow greater flexibility for funding contributions delayed under the CARES Act. The restated guidance allows companies to apply payments made through January 1, 2021, to the funding balance for the prior year in calculating the variable rate premium. This relief is a great victory for ERIC members as it will allow plans to take advantage of the full benefits of delaying minimum funding contributions. Under this new guidance, plans can amend their annual filings and receive a refund of variable-rate premiums.

ERIC sent a letter in August to PBGC Director Gordon Hartogensis to allow contributions made by the delayed contribution date to be included in the 2020 VRP calculations so employers can receive relief that the CARES Act was meant to provide. We are pleased that the PBGC has followed our recommendation to change the previous guidance.

Article by Aliya Robinson, Senior Vice President of Retirement and Compensation Policy