Under the expanded program, PBGC will audit premium payments by single-employer defined benefit plans selected from around the country. In a pilot program, launched in 1995, PBGC focused on plans located in the eastern part of the country. The pilot program showed premium audits to be a cost-effective means of identifying and collecting premium underpayments.
Most companies properly pay their premiums but mistakes occasionally are made.
Under the premium audit program, PBGC reviews premium filings, actuarial assumptions, and other information to determine whether a plan calculated and paid the correct premium for the six most recent plan years. Plans that underpaid their premiums will be billed for the unpaid amounts as well as late payment penalty and interest charges. PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by more than 42 million American workers and retirees participating in private-sector defined benefit pension plans. PBGC insures about 50,000 pension plans. The agency receives no funds from general tax revenues.