A client has a question regarding whether or not a Church Plan is required to pay PBGC premiums on their defined benefit plan. They have been paying the premiums all along but have recently heard that if they are a church, they do not have to pay. Is this correct?

Church plans (as defined in ERISA and the Internal Revenue Code) are not required to pay PBGC premiums. In fact, if your client's plan is a church plan, the plan probably does not have PBGC coverage even if premiums have been paid. There is a six year statute of limitations on recovery of erroneously paid PBGC premiums.


[Note: This message has been edited by Danny Miller]

Church plans aren't even required to file Form 5500s. IRS Announcement 82-146.

For anyone who wants to see a copy of IRS Announcement 82-146, to which Kirk refers, it is available by clicking here.
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Employee benefits legal resource site

Govt. plans are also exempt from paying PBGC premiums. We had a govt. plan in our office that paid premiums for several years (we did not know of their govt. status).

When we found out about the status, we urged them to apply for a refund, and were surpised when they got a refund without any real debate or stalling on the part of the PBGC.

So I would recommend that the church plan go ahead with asking for a refund.