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.
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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).

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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.

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