PBGC premiums for underfunded pension plans to jump in 2014
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Employers with underfunded pension plans will be paying sharply higher premiums to the Pension Benefit Guaranty Corp. next year.
In 2014, the variable rate premium will rise to $14 per $1,000 of unfunded vested benefits, up from the $9 rate for 2013, the PBGC announced Wednesday.
Of that $5 increase, $4 was set by a 2012 law and the remainder was due to a provision in that law that ties increases in the variable rate premium to wage inflation.
In addition, the maximum variable rate premium next year will be capped at $412 per plan participant, up from the $400 per participant cap in 2013.
The basic flat-rate premium — paid by all plan sponsors — will increase in 2014 to $49, up from $42 in 2013.
That increase was set by the 2012 law. Starting in 2015, increases in the flat-rate premium will be indexed to wage inflation.
