PBGC Updates Website With 2019 Premium Rates
DB plan sponsors are using a variety of strategies to manage increasing PBGC premiums, including accelerating funding and implementing pension risk transfer strategies.
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.