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Compliance November 4, 2005
Senate Approves PBGC Premium Hike
November 4, 2005 (PLANSPONSOR.com) - The Senate has
approved a budget measure that will increase annual premiums
paid by employers to the Pension Benefit Guaranty Corporation
(PBGC) to $46.75 per participant from $19 per participant,
Business Insurance reports.
Reported by Rebecca Moore
In addition, the measure would impose a $1,250 per-participant fee on employers who terminate their plans due to bankruptcy.
The premium hike and bankruptcy fee will not go into effect if the Senate passes its pension reform this year. The Senate’s reform bill is currently on hold due to arguments about the special treatments of airlines in the bill’s provisions (See Senate Pension Proposal Still on “Hold” ).
Business Insurance said the House is also expected next week to vote on a measure that would raise the PBGC premium to $30 but would give the PBGC automatic authority to boost the premium rate by 20% a year if the agency considered it necessary. Congress would have the authority to block the increase (See Boehner Committee Approves PBGC Funding Measure ).
Business groups are generally against PBGC premium hikes, saying they will continue to keep employers from offering defined benefit pension plans.