Compliance October 20, 2016

PBGC Updates Website With New Premium Rates

Increases in the premiums for defined benefit plans was provided for in the Bipartisan Budget Act of 2015.
Reported by

The Pension Benefit Guaranty Corporation (PBGC) has updated its website with new premium rates for defined benefit (DB) plans for 2017.

The per-participant flat premium rate for plan years beginning in 2017 is $69 for single-employer plans (up from a 2016 rate of $64) and $28 for multiemployer plans (up from a 2016 rate of $27).

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

The increase in the single-employer rate was provided in The Bipartisan Budget Act of 2015. The increase in the multiemployer rate is the result of indexing.

For plan years beginning in 2017, the variable-rate premium (VRP) for single-employer plans is $34 per $1,000 of unfunded vested benefits (UVBs), up from a 2016 rate of $30. The $4 increase reflects a $3 increase provided in The Bipartisan Budget Act of 2015 plus a $1 increase due to indexing.

For 2017, the VRP is capped at $517 times the number of participants (up from a 2016 cap of $500). Plans sponsored by small employers (generally fewer than 25 employees) may be subject to a lower cap.

Multiemployer plans do not pay a VRP.

The updated page also includes a link to scheduled increases for years after 2017.

«