This update is for only those Businesses that have a traditional Defined Benefit Plan or a Cash Balance Plan that is covered by the Pension Benefit Guaranty Corporation (PBGC). Those DB/CB Plans that are not exempt are required to annually pay PBGC premiums. 401k and 403b Plans are not subject to the PBGC rules.
The PBGC recently announced a change in the due date for the 2025 plan year premium payments. The premium payment deadline is one month earlier than prior years. The due date this year is September 15th for calendar years DB/CB Plans, not October 15th. (For Plans with a yearend other than December 31st, the due date is the 15th day of the ninth month of the premium payment year.)
In practical terms, this means that the final DB/CB funding in 2025 needs to be before the typical funding deadline of September 15th. Why? Because the PBGC premium filing needs to report the final cash funding. It would be a logistical nightmare to be making the final funding on September 15th and to be completing the PBGC premium filing and payment on September 15th. Therefore, for PBGC-covered DB/CB Plans, gameplan to have your final funding for the 2024 Plan Year done by August 2025.
Interestingly, this is a onetime change, and the rules are expected to revert back for 2026.
ACSI is available to help you learn more about this topic or other issues as we assist you with the operational compliance for your Retirement Plan.