Instructions for Part IV - Total Premium Information

8 Premium proration (If the plan does not qualify for premium proration, skip to item 9.)

1. Number of months in the short plan year – Report the number of months (complete and partial) in the short plan year. For this purpose, each plan month (i.e., each month in the plan year) generally begins on the same day of each successive calendar month. For example, if the plan year begins on July 1, the first day of each successive calendar month is the beginning of a new month; similarly, if the plan year begins on January 15, the second plan month begins on February 15, the third plan month on March 15, etc. Thus, if a short final year begins on January 1 and ends on June 1, there would be six (full or partial) months in the short year. (The last (partial) month, beginning (and ending) on June 1, would count as a full month for purposes of prorating the premium.) Similarly, if a short first year begins on July 31 and ends on December 31, there would also be six (full or partial) months in the short year.

   There are two special rules when a plan year begins at or near the end of a calendar month:

   • If the plan year begins on the last day of a calendar month, successive plan months begin on the last day of successive calendar months. For example, if the plan year begins on November 30, successive plan months begin on December 31, January 31, the last day of February (the 28^th or 29^th), March 31, etc.
   • If the plan year begins on the 29^th or 30^th of a calendar month other than February, the plan month beginning in February begins on the last day of February. For example, if the plan year begins on November 29, successive plan months begin on December 29, January 29, the last day of February (the 28^th or 29^th), March 29, etc. If the plan year begins on December 30, successive plan months begin on January 30, the last day of February (the 28^th or 29^th), March 30, April 30, etc.

   Counting months for New Plans – The short first year of a New Plan is treated as beginning on the Participant Count Date (i.e., the plan effective date).

   Counting months for Newly Covered Plans – Although the Premium Payment Year for a Newly Covered Plan is, most likely, a full year, premiums are due only for the portion of the year the plan is covered by PBGC. Therefore, for purposes of prorating the premium for the first year of coverage, a Newly Covered Plan’s first year of coverage is treated as beginning on the date when the plan becomes covered under ERISA section 4021

   Counting months for terminating plans – The (short) plan year of a terminating plan’s final year is treated as ending on:

   • for a Multiemployer Plan that distributed all its assets pursuant to ERISA section 4041A, the date the distribution is completed; or
   • for a Single-employer Plan, the earlier of:
   • the date on which the distribution of the plan’s assets in satisfaction of all Benefit Liabilities was completed; or
   • the date that a trustee for the terminating plan was appointed under ERISA section 4042.
2. Total premium before proration – Report the sum of the Flat-rate Premium and, if applicable, the Variable-rate Premium.

9 Total premium

• If the plan does not qualify for premium proration, report the sum of the Flat-rate Premium and, if applicable, the Variable-rate Premium.
• If the plan qualifies for premium proration, multiply the total premium before reflecting proration by the number of months (complete and partial) in the short plan year and then divide by 12. Round to two decimal places after completing the calculation.

If this amount includes cents, report the exact amount (dollars and cents), not a rounded amount.