By Jerry Geisel, Crain News Service
CHICAGO (March 17, 2015) — Employers that “de-risk” their pension plans now have to disclose risk transfer information to the Pension Benefit Guaranty Corp. (PBGC) as part of paying their annual pension insurance premiums to the federal agency.
The risk-transfer disclosure requirement, which the PBGC said March 10 has been approved by the Office of Management and Budget (OMB), will affect 2015 premium filings, which for most employers are due Oct. 15.
In cases when employers offer to convert plan participants' monthly annuity to a cash lump sum, employers will have to answer four questions: How many plan participants not in pay status, such as retirees, were offered the option? How many of those participants took it? How many plan participants in pay status were offered the option? And how many of those employees took it?
In cases when employers buy a group annuity from an insurer and the insurer then provides the pension benefits to participants, the employer will have to report how many participants were in pay status and how many were not when the annuity was purchased.
However, employers can disregard annuity purchases and lump-sum benefit offers made less than 60 days before the PBGC premium filing was made.
The answers to the PBGC questions relate to lump-sum offers and annuity purchases that occurred in 2014, and those in 2015 that occurred 60 days prior to when plan sponsors made their PBGC premium payments.