The Pension Benefit Guarantee Corporation (PBGC) recently updated its premium rates for defined benefit plans for 2020 and beyond. The PBGC is responsible for the continuation and maintenance of voluntary private benefit pension plans and keeping pension insurance premiums at the lowest levels necessary to carry out the plans operations.
The new premium rates are as follows:
| Plan years beginning in | Single-Employer Plans | Multiemployer Plans | ||
|---|---|---|---|---|
| Per Participant Rate for Flat-Rate Premium | Variable-Rate Premium | Per Participant Rate for | ||
| Rate per $1,000 UVBs* | Per Participant Cap | Flat-Rate Premium | ||
| 2016 | $64 | $30 | $500 | $27 |
| 2017 | $69 | $34 | $517 | $28 |
| 2018 | $74 | $38 | $523 | $28 |
| 2019 | $80 | $43 | $541 | $29 |
| 2020 | $83 | $45 | $561 | $30 |
*unfunded vested benefits.
Multiemployer plans are not required to pay a variable rate premium. Small employers with 25 employees or less may be subject to a lower cap. After 2019, all rates are subject to indexing. There are no scheduled increases (other than indexing) for years after 2019.
If you have questions about the changes and how they may affect you, please contact your Nyhart consultant.