Administration renews proposal to allow PBGC to set risk-adjusted premiums

President Obama’s fiscal year 2014 budget request proposes to give the Pension Benefit Guaranty Corporation (PBGC) Board the authority to set risk-adjusted premiums. The proposal was originally contained in the FY 2012 budget request.

Changes would be phased in

Under the budget proposal, the PBGC Board, which consists of the Secretaries of Labor, Commerce, and Treasury, with the Secretary of Labor as chair, would be given the authority to set rates starting in 2015. The budget request would require the PBGC Board to perform a one-year study with a public comment period. Additionally, premium increases would be gradually phased in to give company sponsors time to prepare for the new rates.

Source: FY 2014, Department of Labor, Budget in Brief. PBGC News Release 13-07, April 10, 2013.

Source: General Explanations of the Administration’s Fiscal Year 2014 Revenue Proposals, Department of the Treasury, April 2013. EBRI press release, April 10, 2013. ASPPA press release, April 5, 2013. ERIC press release, April 10, 2013. PSCA press release, April 10, 2013.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer’s Benefits Reports.

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