Congressmen Jim Renacci, R-Ohio,
and Mark Pocan, D-Wisconsin, have introduced legislation to address
Pension Benefit Guaranty Corporation (PBGC) premiums.
release on Representative Renacci’s website said, “Under current law,
pension insurance premiums that are paid by employers to the Pension
Benefit Guaranty Corporation (PBGC) are included in the federal budget
and are considered ‘on-budget.’ This provides the illusion this revenue
can be used for general government spending, even though these premiums
cannot be allocated to other government programs besides the PBGC
benefit pension plans. In recent years, Congress has increased the PBGC
premiums several times in order to offset increased spending; most
recently increasing premiums through 2025 by $7.65 billion in the Bipartisan Budget Act of 2015.
Pension and Budget Integrity Act simply moves these premiums
‘off-budget,’ and ensures that Congress is raising premiums only if and
when it is appropriate.”
In a statement, the ERISA Industry
Committee (ERIC), the American Benefits Council, the American Retirement
Association, the Committee on Investment of Employee Benefit Assets,
the National Association of Manufacturers, the Society for Human
Resource Management, and U.S. Chamber of Commerce said the Act would
ensure any future pension premium increases are only used towards
retiree payments from the PBGC and not double counted for budget scoring
purposes, which was the original intent of Congress when the PBGC was
created in 1974.
“Discipline is needed to ensure that PBGC
premiums are used solely to protect the pension system and not as a
budget gimmick to pay for unrelated federal programs,” says Annette
Guarisco Fildes, president and CEO of the ERISA Industry Committee. “The
predictability of costs is critical as employers weigh whether to continue sponsoring defined benefit plans and there is nothing
predictable about Congress raising premiums at any time to pay for other
Some feel PBGC premiums have reached an unsustainable level for many plan sponsors.