PBGC Sets Premium Rates for 2018

The Pension Benefit Guaranty Corporation (PBGC) has set flat-rate and variable rate premiums for 2018.

Flat-Rate Premiums

The per-participant flat-rate premium for plan years beginning in 2018 is $74 for single-employer plans (up from the $69 2017 rate) and $28 for multiemployer plans (no change from 2017).

Variable-Rate Premiums

For plan years beginning in 2018, the variable-rate premium (VRP) for single-employer plans is $38 per $1,000 of unfunded vested benefits (UVBs), up from a 2017 rate of $34.

For 2018, the VRP is capped at $523 times the number of participants (up from a 2017 cap of $517). Plans sponsored by small employers (generally fewer than 25 employees) may be subject to a lower cap.

The VRP rate is subject to indexing, but that had no effect for 2018.

Increases After 2018

With the exception of the single-employer flat-rate premium for 2019, all rates and caps are subject to indexing based on increases in the National Average Wage Index (NAWI). In addition, ERISA Section 4006 provides that for single-employer plans, the 2019 flat and variable-rate premiums will increase by $6 and $4 respectively.

After 2019, all rates are subject to indexing. There are no scheduled increases (other than indexing) for years after that.

Current and historical information regarding PBGC premium rates is available here.