The Pension Benefit Guaranty Corporation (PBGC) has added to its website premium rates for plan years beginning in 2019.
The per-participant flat premium rate for plan years beginning in 2019 is $80 for single-employer defined benefit (DB) plans (up from a 2018 rate of $74) and $29 for multiemployer plans (up from a 2018 rate of $28).
The increase in the single-employer rate was provided in The Bipartisan Budget Act of 2015. The increase in the multiemployer rate is due to indexing.
For plan years beginning in 2019, the variable-rate premium (VRP) for single-employer plans is $43 per $1,000 of unfunded vested benefits (UVBs), up from a 2018 rate of $38. The VRP is capped at $541 times the number of participants (up from a 2018 cap of $523). Plans sponsored by small employers (generally fewer than 25 employees) may be subject to a lower cap.
A table on the PBGC’s website shows that the flat-rate premium for single-employer plans has grown from $31 in 2007 to $80 in 2019, and the variable-rate premium has grown from $9 to $43.DB plan sponsors are using a variety of strategies to manage increasing PBGC premiums, including accelerating funding and implementing pension risk transfer strategies.