PBGC premium rates going up in 2016

Employers with underfunded pension plans will be paying sharply higher premiums to the Pension Benefit Guaranty Corp. next year.

In 2016, the variable rate premium will rise to $30 per $1,000 of unfunded vested benefits, up from the $24 rate for 2015, the PBGC announced Monday.

Of that $6 increase, $5 was set by a 2013 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 $500 per plan participant, up from the $418 per participant cap in 2015.

The base flat-rate premium — paid by all defined benefit plan sponsors — will increase in 2016 to $64 per plan participant, up from $57 in 2015.