Premium Changes Based On Recharacterization of Contributions, 79714 [2011-32804]

Download as PDF 79714 Federal Register / Vol. 76, No. 246 / Thursday, December 22, 2011 / Notices Ongoing Review of Partner Countries’ Policy Performance The Board also reviewed the policy performance of countries that are implementing compacts. These countries do not need to be reselected each year in order to continue implementation. Once MCC makes a commitment to a country through a compact agreement, MCC does not consider the country for reselection on an annual basis during the term of its compact. The Board emphasized the need for all partner countries to continue to improve their environment. If it is determined that a country has demonstrated a significant policy reversal, MCC can hold it accountable by applying MCC’s Suspension and Termination Policy. Selection To Initiate the Compact Process The Board also authorized MCC to invite Benin and El Salvador to submit a proposal for a second compact, as described in section 609 of the Act (22 U.S.C. 7708). Submission of a proposal is not a guarantee that MCC will finalize a compact with an eligible country. Any MCA assistance provided under section 605 of the Act (22 U.S.C. 7704) will be contingent on the successful negotiation of a mutually agreeable compact between the eligible country and MCC, approval of the compact by the Board, and the availability of funds. [FR Doc. 2011–32733 Filed 12–21–11; 8:45 am] BILLING CODE 9211–03–P PENSION BENEFIT GUARANTY CORPORATION Premium Changes Based On Recharacterization of Contributions Pension Benefit Guaranty Corporation. ACTION: Policy statement. AGENCY: This policy statement addresses PBGC’s policy on accepting and responding to amended premium filings based on recharacterization of contributions. Recharacterization of contributions refers to a situation in which contributions originally designated as being for the plan year in which they were made are retroactively redesignated as being for the preceding plan year. This makes plan assets for the current year higher, and the plan’s variable-rate premium lower, than originally reported. Such recharacterization seeks not to correct a factual error but to change a valid designation and is not an appropriate jlentini on DSK4TPTVN1PROD with NOTICES SUMMARY: VerDate Mar<15>2010 19:17 Dec 21, 2011 Jkt 226001 basis for an amended premium filing or premium refund. FOR FURTHER INFORMATION CONTACT: Catherine B. Klion (klion.catherine@pbgc.gov), Manager, or Deborah C. Murphy (murphy.deborah@pbgc.gov), Attorney, Regulatory and Policy Division, Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington DC 20005–4026; (202) 326–4024. (TTY and TDD users may call the Federal relay service toll free at 1–(800) 877–8339 and ask to be connected to (202) 326–4024.) SUPPLEMENTARY INFORMATION: The Pension Benefit Guaranty Corporation (PBGC) administers the pension insurance program under title IV of the Employee Retirement Income Security Act of 1974 (ERISA). Under sections 4006 and 4007 of ERISA, plans covered by title IV must pay premiums to PBGC. For single-employer plans, premiums include an amount (the variable-rate premium, or VRP) based on unfunded vested benefits (the excess, if any, of the value of vested benefits over the value of plan assets). A contribution made to a pension plan during the first eight-and-a-half months of a plan year may be characterized as being either for the current year (the plan year in which it is made) or for the prior year (the preceding plan year). The characterization affects when the contribution is first reflected in plan assets. If a contribution is characterized as being for the prior year, it is treated as a receivable (which increases plan assets) as of the beginning of the current year and thus reduces any VRP for the current year. If a contribution is characterized as being for the current year, it does not increase plan assets as of the beginning of the current year and thus does not affect VRP for the current year. The year for which a contribution is made is designated on Schedule SB (formerly Schedule B) (actuarial information) to the annual report for the plan on IRS/DOL/PBGC Form 5500. PBGC has received a number of amended premium filings, showing increased assets and decreased VRP, supported by amended Schedules SB (or B) that reflect recharacterization of contributions, and submitted with a view to obtaining premium refunds. PBGC has in practice accepted such amended filings and granted the refunds. Upon further consideration of the matter, however, PBGC has concluded that in general, such amendments should be rejected and the associated premium refunds denied. PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 Permitting the amendment of premium filings gives filers a way to correct mistakes in the data reported in the filings. Where the correction of erroneous data results in a lower premium, it is appropriate to refund the amount of the overpayment. However, recharacterization of a contribution does not correct a mistake; rather, it seeks to undo a valid designation of the year for which the contribution was made. Thus, it is not an appropriate basis for amending the relevant premium filing and claiming a refund.1 PBGC’s consideration of amended premium filings takes into account the facts and circumstances of each case. In general, however, as explained above, PBGC’s policy will be to reject amended filings and deny refunds based on recharacterization of contributions. For questions about premium filings, contact Robert Callahan (callahan.robert@pbgc.gov) or Bill O’Neill (oneill.bill@pbgc.gov), Financial Operations Department; (202) 346–4067. Issued in Washington, DC, this 16th day of December, 2011. Joshua Gotbaum, Director, Pension Benefit Guaranty Corporation. [FR Doc. 2011–32804 Filed 12–21–11; 8:45 am] BILLING CODE 7709–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65991; File No. 4–566] Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d– 2; Notice of Filing and Order Approving and Declaring Effective an Amendment to the Plan for the Allocation of Regulatory Responsibilities Among BATS Exchange, Inc., BATS Y-Exchange, Inc., Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, The NASDAQ Stock Market LLC, National Stock Exchange, Inc., New York Stock Exchange LLC, NYSE Amex LLC, and NYSE Arca, Inc. Relating to the Surveillance, Investigation, and Enforcement of Insider Trading Rules December 16, 2011. Notice is hereby given that the Securities and Exchange Commission 1 The same principles would apply to an amended filing made with a view to obtaining a credit against the next year’s premium. E:\FR\FM\22DEN1.SGM 22DEN1

Agencies

[Federal Register Volume 76, Number 246 (Thursday, December 22, 2011)]
[Notices]
[Page 79714]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32804]


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PENSION BENEFIT GUARANTY CORPORATION


Premium Changes Based On Recharacterization of Contributions

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Policy statement.

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SUMMARY: This policy statement addresses PBGC's policy on accepting and 
responding to amended premium filings based on recharacterization of 
contributions. Recharacterization of contributions refers to a 
situation in which contributions originally designated as being for the 
plan year in which they were made are retroactively redesignated as 
being for the preceding plan year. This makes plan assets for the 
current year higher, and the plan's variable-rate premium lower, than 
originally reported. Such recharacterization seeks not to correct a 
factual error but to change a valid designation and is not an 
appropriate basis for an amended premium filing or premium refund.

FOR FURTHER INFORMATION CONTACT: Catherine B. Klion 
(klion.catherine@pbgc.gov), Manager, or Deborah C. Murphy 
(murphy.deborah@pbgc.gov), Attorney, Regulatory and Policy Division, 
Legislative and Regulatory Department, Pension Benefit Guaranty 
Corporation, 1200 K Street NW., Washington DC 20005-4026; (202) 326-
4024. (TTY and TDD users may call the Federal relay service toll free 
at 1-(800) 877-8339 and ask to be connected to (202) 326-4024.)

SUPPLEMENTARY INFORMATION: 
    The Pension Benefit Guaranty Corporation (PBGC) administers the 
pension insurance program under title IV of the Employee Retirement 
Income Security Act of 1974 (ERISA). Under sections 4006 and 4007 of 
ERISA, plans covered by title IV must pay premiums to PBGC. For single-
employer plans, premiums include an amount (the variable-rate premium, 
or VRP) based on unfunded vested benefits (the excess, if any, of the 
value of vested benefits over the value of plan assets).
    A contribution made to a pension plan during the first eight-and-a-
half months of a plan year may be characterized as being either for the 
current year (the plan year in which it is made) or for the prior year 
(the preceding plan year). The characterization affects when the 
contribution is first reflected in plan assets. If a contribution is 
characterized as being for the prior year, it is treated as a 
receivable (which increases plan assets) as of the beginning of the 
current year and thus reduces any VRP for the current year. If a 
contribution is characterized as being for the current year, it does 
not increase plan assets as of the beginning of the current year and 
thus does not affect VRP for the current year.
    The year for which a contribution is made is designated on Schedule 
SB (formerly Schedule B) (actuarial information) to the annual report 
for the plan on IRS/DOL/PBGC Form 5500. PBGC has received a number of 
amended premium filings, showing increased assets and decreased VRP, 
supported by amended Schedules SB (or B) that reflect 
recharacterization of contributions, and submitted with a view to 
obtaining premium refunds. PBGC has in practice accepted such amended 
filings and granted the refunds. Upon further consideration of the 
matter, however, PBGC has concluded that in general, such amendments 
should be rejected and the associated premium refunds denied.
    Permitting the amendment of premium filings gives filers a way to 
correct mistakes in the data reported in the filings. Where the 
correction of erroneous data results in a lower premium, it is 
appropriate to refund the amount of the overpayment. However, 
recharacterization of a contribution does not correct a mistake; 
rather, it seeks to undo a valid designation of the year for which the 
contribution was made. Thus, it is not an appropriate basis for 
amending the relevant premium filing and claiming a refund.\1\
---------------------------------------------------------------------------

    \1\ The same principles would apply to an amended filing made 
with a view to obtaining a credit against the next year's premium.
---------------------------------------------------------------------------

    PBGC's consideration of amended premium filings takes into account 
the facts and circumstances of each case. In general, however, as 
explained above, PBGC's policy will be to reject amended filings and 
deny refunds based on recharacterization of contributions.
    For questions about premium filings, contact Robert Callahan 
(callahan.robert@pbgc.gov) or Bill O'Neill (oneill.bill@pbgc.gov), 
Financial Operations Department; (202) 346-4067.

    Issued in Washington, DC, this 16th day of December, 2011.
Joshua Gotbaum,
Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2011-32804 Filed 12-21-11; 8:45 am]
BILLING CODE 7709-01-P
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