Premiums - Frequently Asked Questions

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Premiums

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.

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. Who counts as a participant for the flat-rate premium?

The definition of participant has been simplified for premium purposes for plan years beginning after 2000. The new definition excludes from the participant count — and thus eliminates premiums for — individuals who do not have accrued benefits and for whom the plan has no other benefit liabilities.

For example, a new plan that does not provide credit for service before the plan began will typically not have to pay a premium for its first plan year. However, the plan administrator must file the premium form(s) for the first year to provide plan information to PBGC and certify that no premium is owed.

In another example, the plan may provide that an employee is eligible for a pension benefit (i.e., vested) after a specified period of time (e.g., 5 years). When determining the participant count for PBGC premium purposes, all employees, whether or not vested, must be included in the participant count if the plan has a benefit liability for these employees, even if the employees are not yet eligible to receive the benefits (e.g., employed only 3 years). The plan has a benefit liability with respect to any employee who has an accrued benefit, even if the employee is not vested.

For more details, see the Premium Payment Package and PBGC's final rule (TXT | PDF) changing the definition of "participant," published in the Federal Register December 1, 2000, at 65 FR 75160.

3. Is my premium reduced if my plan has a short plan year?

For plan years beginning after 2000, you may pay a prorated premium for certain short plan years. (As in the past, you may instead pay a full year's premium and either (1) request PBGC to compute and pay a partial refund of the excess amount paid or (2) take a credit for the excess amount on a future premium filing.)

The short years that this rule applies to are: (1) a short first year of a new or newly covered plan; (2) a short year created by a change in plan year; (3) a short year created by distribution of assets pursuant to a plan termination; and (4) a short year created by the appointment of a trustee for a single-employer plan under ERISA section 4042.

For more details, see the Premium Payment Package and PBGC's final rule (TXT | PDF) changing the definition of "participant," published in the Federal Register December 1, 2000, at 65 FR 75160.

4. When must premiums be filed?

There are two premium filing due dates each year: the First Filing Due Date and the Final Filing Due Date. (There are also special filing rules for new and newly covered plans and for plans that change plan years.)

The First Filing Due Date is the deadline for the flat-rate premium for large plans only (that is, those required to pay premiums for 500 or more participants for the preceding plan year). The First Filing Due Date is the last day of the second full calendar month in the premium payment year (e.g., the end of February for calendar year plans). If the actual flat-rate premium isn't known by the First Filing Due Date, a large plan may pay an estimate on Form 1-ES. It must then make a reconciliation filing using Form 1 by the Final Filing Due Date, even if the plan owes no additional premiums. Tables of First and Final Filing Due Dates for 2004 and 2003 are shown below. The 2004 tables, as well as other premium due date information, may also be found in Part B.2 of the Premium Payment Package. Tables for 2003 can be found in Part B.2 of the 2003 Premium Payment Package; for previous years, the tables are in Part C of the Premium Payment Package.

The Final Filing Due Date is the deadline for all premiums for small plans (that is, those required to pay premiums for fewer than 500 participants for the preceding plan year). It is also the deadline for large plans to reconcile their flat-rate premiums and for large single-employer plans to pay their variable-rate premiums. All filings due on the Final Filing Due Date are made on Form 1 or new Form 1-EZ (see Premium FAQ 6 below).

The Final Filing Due Date for plan years after 1998 is generally the 15th day of the 10th full calendar month following the end of the plan year preceding the premium payment year (e.g., October 15th for calendar year plans). (For 1998 and earlier plan years, the Final Filing Due Date was the 15th day of the eighth full calendar month following the month in which the premium payment year began (e.g., September 15th for calendar year plans).)

If a premium due date falls on a weekend or federal holiday, we consider your filing to be on time if you file by the first business day after the due date. However, if you miss that first business day, any interest or penalty is calculated from the actual due date (e.g., from Saturday 02/28/2004 rather than Monday 03/01/2004).

Plan Year Begins	2004 First Filing Due Date (Form 1-ES)	2004 Final Filing Due Date (Forms 1 and 1-EZ)
01/01/2004	03/01/2004	10/15/2004
01/02 - 02/01/2004	03/30/2004	11/15/2004
02/02 - 03/01/2004	04/30/2004	12/15/2004
03/02 - 04/01/2004	06/01/2004	01/18/2005
04/02 - 05/01/2004	06/30/2004	02/15/2005
05/02 - 06/01/2004	08/02/2004	03/15/2005
06/02 - 07/01/2004	08/31/2004	04/15/2005
07/02 - 08/01/2004	09/30/2004	05/16/2005
08/02 - 09/01/2004	11/01/2004	06/15/2005
09/02 - 10/01/2004	11/30/2004	07/15/2005
10/02 - 11/01/2004	12/31/2004	08/15/2005
11/02 - 12/01/2004	01/31/2005	09/15/2005
12/02 - 12/31/2004	02/28/2005	10/17/2005

Plan Year Begins	2003 First Filing Due Date (Form 1-ES)	2003 Final Filing Due Date (Forms 1 and 1-EZ)
01/01/2003	02/28/2003	10/15/2003
01/02 - 02/01/2003	03/31/2003	11/17/2003
02/02 - 03/01/2003	04/30/2003	12/15/2003
03/02 - 04/01/2003	06/02/2003	01/15/2004
04/02 - 05/01/2003	06/30/2003	02/17/2004
05/02 - 06/01/2003	07/31/2003	03/15/2004
06/02 - 07/01/2003	09/02/2003	04/15/2004
07/02 - 08/01/2003	09/30/2003	05/17/2004
08/02 - 09/01/2003	10/31/2003	06/15/2004
09/02 - 10/01/2003	12/01/2003	07/15/2004
10/02 - 11/01/2003	12/31/2003	08/16/2004
11/02 - 12/01/2003	02/02/2004	09/15/2004
12/02 - 12/31/2003	03/01/2004	10/15/2004

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5. Who must file premiums?

The plan administrator of each PBGC-insured single-employer plan and multiemployer plan is required annually to file the Form 1 or Form 1-EZ 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 1-800-736-2444 (or at 202-326-4242 if you are in the local Washington, DC area), emailing to standard@pbgc.gov 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 appropriate 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.

6. What premium forms should be used?

Starting with the 2001 plan year, we issued a new simplified premium form - the Form 1-EZ - that replaces Form 1 and Schedule A for single-employer plans that are exempt from the variable rate premium. NOTE: Paying a zero variable rate premium is NOT the same as being exempt from the variable rate premium. To be exempt, a plan must satisfy the conditions for one of the exemptions described in the instructions for Form 1-EZ. See Part C, item 12, in the 2003 Premium Payment Package.

For 2004, therefore, you must make your final premium filing by the Final Due Date (as defined in Premium FAQ 4 above) using the following form(s):

For a multiemployer plan, Form 1 alone;
For a single-employer plan that is exempt from the variable rate premium, Form 1-EZ alone; or
For a single-employer plan that is not exempt from the variable rate premium (even if the plan's variable rate premium is zero), Form 1 with Schedule A.

In addition, any plan that must pay the flat rate premium by the First Filing Due Date (see Premium FAQ 4 above) may use Form 1-ES to make the flat rate payment due by that date. PBGC issues Form 1-ES in the Estimated Premium Payment Package.

7. Must a premium filing be made for a new plan that owes no premium?

As discussed in Premium FAQ 2 above, some new plans may owe no premium for their first year because they have no benefit liabilities for participants when the plan becomes effective. However, such a plan must make a premium filing for the first year in order to provide plan information to PBGC and to certify that, under PBGC rules, there are no participants and no premium is owed. If the plan is a single-employer plan, it may file Form 1-EZ and check the box for "no vested participants" (item 12(a)).

ADDRESSES AND PHONE NUMBERS

8. Where should premium forms and payments be sent to PBGC?
It is very important that the premium forms and payments be sent to the right place (see below) and that you not include correspondence. (See Premium FAQ 9 for correspondence mailing address.)
If you send your premium forms by mail, address them to:

Pension Benefit Guaranty Corporation
Department 4316
Carol Stream, IL 60122-4316

If you use a delivery service, use the following address (because delivery services do not deliver to Post Office Box addresses):

Bank One Regional Lockbox
2500 Westfield Drive
Department 4316, Mailcode: IL 1-6030
Elgin, IL 60123

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 electronic funds transfer, send the payment to:

Bank One, NA
Chicago, IL
ABA: #071000013
Account: #656510666
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.

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9. Where should premium-related 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: 1-800-736-2444 (or 202-326-4242 if you are in the local Washington, DC area). For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the appropriate number in the preceding sentence.

E-mail: premiums@pbgc.gov

Write:

Pension Benefit Guaranty Corporation
Department 4315
Carol Stream, IL 60122-4315

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.

10. Whom should I contact about a complaint or unresolved problem? If you have a premium question, problem or request, you should first email premiums@pbgc.gov or call our premium payer customer service representatives at 1-800-736-2444 (or at 202-326-4242 if you are in the local Washington, DC area), 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 appropriate 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 Practitioner Problem Resolution Officer at 202-326-4136 or via e-mail to practitioner.pro@pbgc.gov. 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 (Practitioners), Suite 610
1200 K Street NW
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

11. 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 8 above). Mail the premium filing 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
Department 4316
Carol Stream, IL 60122-4316

PBGC considers that you filed Form 1 and made your premium payment on the date the envelope is postmarked by the United States Postal Service. If the envelope does not contain a legible Postal Service postmark (regardless of whether it contains a postmark made by a private postage meter), we will consider that you filed the form and made your payment on the date that is three days before we received it.

12. Does an IRS Extension for Form 5500 extend my PBGC premium filing due date? No. Extensions of time to file the Form 5500 series beyond the Form 1 filing deadline do not extend the filing due date for PBGC's forms.

STATEMENTS OF ACCOUNT AND PAST DUE FILING NOTICES

13. 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 at 1-800-736-2444 (or at 202-326-4242 if you are in the local Washington, DC area), or email premiums@pbgc.gov. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the appropriate 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 at 1-800-736-2444 (or at 202-326-4242 if you are in the local Washington, DC area), or email premiums@pbgc.gov. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the appropriate number in the preceding sentence. 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, who are also at the same telephone numbers (1-800-736-2444, or 202-326-4242 if you are in the local Washington, DC area), or email standard@pbgc.gov. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the appropriate number in the preceding sentence. Premium and interest cannot be waived. Late payment penalties may be waived depending on the facts and circumstances (See Premium FAQ 16 for details on waiver requests).

14. 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 Web site. Interest is compounded daily.

15. Why is there an interest charge for underpayment or late payment of estimated premiums? Our regulations require a large plan (one with 500 or more participants for the prior plan year) to pay the full final amount — not an estimate — of its flat-rate premium by the end of the second month of the plan year. We accept an estimate because we realize that plans may not know the final amount by the this date. For the same reason, we waive the underpayment penalty if a plan meets certain "safe harbor" requirements. We waive the penalty if a plan did not make an estimated premium payment because it erroneously reported fewer than 500 participants for the prior plan year. We also waive the penalty if a plan's estimate is paid timely and the payment is at least (1) 90% of the flat-rate premium due for the current plan year, or (2) 100% of the flat-rate premium that would be due using the participant count reported on the Form 1 for the prior year (or the actual count for the prior year, if less). 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

16. 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 1-800-736-2444 (or at 202-326-4242 if you are in the local Washington, DC area), or email premiums@pbgc.gov 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 appropriate 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 a written request, within 30 days after the date of the SOA, to:

Pension Benefit Guaranty Corporation
Department 4316
Carol Stream, IL 60122-4316

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

17. 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 may be made by check or by wire transfer to the premium payer's account. You can request a refund by checking the refund box on the Form 1 or Form 1-EZ, or by submitting a separate written request. 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 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 at 1-800-736-2444 (or at 202-326-4242 if you are in the local Washington, DC area) or email premiums@pbgc.gov 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 appropriate number in the preceding sentence.

18. How are refunds issued? What action should be taken if the plan did not receive a requested refund? If PBGC determines that a requested refund is due, we will send the plan administrator a letter from PBGC confirming that the refund will be forthcoming. This letter will include 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. If you have not received the refund typically within 60 days after you receive the PBGC refund letter, contact PBGC's premium payer customer service representatives at 1-800-736-2444 (or at 202-326-4242 if you are in the local Washington, DC area), or email premiums@pbgc.gov. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the appropriate number in the preceding sentence.

Please be aware that refunds will take longer to process during peak filing periods, which start in February and October.

19. 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? 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 1-800-736-2444 (or at 202-326-4242 if you are in the local Washington, DC area) or email premiums@pbgc.gov. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the appropriate number in the preceding sentence.

20. Are there refunds available for "overlapping" premium payments resulting from a plan merger, consolidation, or spinoff? 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, if you pay a full year's premium in one of 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. For plan years beginning after 2000, premiums may be prorated for these short plan years.

PREMIUMS FOR TERMINATED PLANS

21. What are the premium payment rules regarding terminating plans and why are payment notices sometimes sent to 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 premium must be paid through the plan year in which one of these occurrences takes place. As a result, a terminated plan may receive a Past Due Filing Notice if a required premium filing is missing or a Statement of Account if a required premium is late or insufficient.

22. Why do I continue to receive premium filing booklets for my terminated plan, and how do I stop this mailing?

Terminated plans may still owe premiums, as described in the answer to Premium FAQ 21, 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 at 1-800-736-2444 (or at 202-326-4242 if you are in the local Washington, DC area) or email premiums@pbgc.gov. For TTY/TDD users, call the federal relay service toll-free at 1-800-877-8339 and ask to be connected to the appropriate number in the preceding sentence. If there are no further premiums due for the plan, PBGC will stop mailing the booklet with the following year's mailing.

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Last Edited: 09/09/03