The Senate approved a measure that would more than double the annual premiums employers pay the PBGC — to $46.75 per plan participant from $19. The measure would also impose an annual $1,250-per-participant fee on employers that terminate their plans as part of bankruptcy. The fee would be paid to the PBGC each year for three years after an employer emerges from bankruptcy. The pension provisions, included in a broad budget measure approved Thursday, would take effect Jan. 1 unless Congress passes comprehensive pension funding reform legislation this year. The reform effort has stalled in the Senate and isn't making much progress in the House.
Next week, the House is expected to take up budget legislation that would raise the PBGC premium to $30 but would give the PBGC automatic authority to boost the premium rate by 20% a year if the agency, which has a $23.3 billion deficit, considered such an increase financially necessary. Congress could block the increase, if it chose, in a straight up-or-down vote. The House, like the Senate, would also index future increases to salary increases and impose the new termination charge on employers folding their pension plans as part of bankruptcy.
