WASHINGTON — President George W. Bush proposed in his 2007 budget a 10-year plan to bring the PBGC to full solvency, proposing that the flat-rate insurance premium the agency charges be raised to $30 per participant next year from $19 currently, and that the per-participant figure be adjusted to the National Average Wage index on an annual basis. Also in the budget sent to Congress today is a proposal to close several legal loopholes that currently allow companies to avoid paying the PBGC's annual variable rate premium of $9 for every $1,000 that their plans are underfunded, saving an estimated $15.7 billion next year.
Randy Clerihue, a PBGC spokesman, said the rate increases were the most significant proposals made in the budget in terms of restoring the PBGC to financial health. In a report to Congress last year, PBGC officials estimated the agency would be insolvent by 2015. "The rate increases are attracting the most attention because to some observers it's a large increase," said Mr. Clerihue. "But all things can be looked at through different prisms. Plan sponsors have been contributing about $100 billion per year to their pension plans, and we estimate that the rate increases would bring in additional payments of about $4 billion per year. That's a small cost relative to the real cost, which is the value of the benefits we are guaranteeing."