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Compliance October 26, 2015
PBGC Updates Premium Rates for 2016
The increase in the single-employer rate was provided in The
Bipartisan Budget Act of 2013.
Reported by PLANADVISER staff
The Pension Benefit Guaranty Corporation (PBGC) has updated its website with premium rates for 2016.
The per-participant flat premium rate for plan years beginning in 2016 is $64 for single-employer plans (up from a 2015 rate of $57) and $27 for multiemployer plans (up from a 2015 rate of $26).
The increase in the single-employer rate was provided in The Bipartisan Budget Act of 2013. The increase in the multiemployer rate is the result of indexing.
For plan years beginning in 2016, the variable-rate premium (VRP) for single-employer plans is $30 per $1,000 of unfunded vested benefits (UVBs), up from a 2015 rate of $24. This $6 increase reflects a $5 increase provided in The Bipartisan Budget Act of 2013 plus a $1 increase due to indexing.
The VRP is capped at $500 times the number of participants (up from a 2015 cap of $418). Plans sponsored by small employers (generally fewer than 25 employees) may be subject to an even lower cap. Multiemployer plans do not pay a VRP.
All rates are subject to indexing for years after 2016. There are no scheduled increases, other than indexing, for those years.
More information is here.