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PBGC Sets Premium Rates for 2017

The Pension Benefit Guaranty Corporation (PBGC) has announced the flat-rate and variable-rate premium rates for 2017. The increases are in accordance with The Bipartisan Budget Act of 2015, and are the result of indexing.

Flat-Rate Premiums

The per-participant flat premium rate for plan years beginning in 2017 is $69 for single-employer plans (up from a 2016 rate of $64) and $28 for multiemployer plans (up from a 2016 rate of $27).

Variable-Rate Premiums

For plan years beginning in 2017, the variable-rate premium (VRP) for single-employer plans is $34 per $1,000 of unfunded vested benefits, up from a 2016 rate of $30.

For 2017, the VRP is capped at $517 times the number of participants (up from a 2016 cap of $500). Plans sponsored by small employers (generally fewer than 25 employees) may be subject to a lower cap.

Multiemployer plans do not pay a VRP.

Future Scheduled Increases

The single-employer flat-rate premium and VRP rate increase for 2018 and 2019, as well. These, too, are provided for in The Bipartisan Budget Act of 2015.