PBGC Issues Flat-Rate Premium Increase for 2008

On October 24, 2007, the Pension Benefit Guaranty Corporation (PBGC) announced the inflation-adjusted per capita flat-rate premiums for 2008. The increase is 6.5 percent for single employer plans and 12.5 percent for multiemployer plans.¹

The table below shows the 2008 numbers compared to the 2007 numbers:

These increases are what The Segal Company estimated and recently published in a Bulletin.²

Single employer plans are, of course, also subject to the variable rate premium, which depends on the value of their unfunded vested benefits. Starting in 2008, this applies to all plans that are not fully funded (as measured for premium-payment purposes), even those that were at the full funding limit for funding purposes in 2007.³

Plan sponsors and administrators should adjust their 2008 budgets accordingly.

The Segal Company can be retained to assist plan sponsors with their retirement plan design and administration.

1	To see the 2008 numbers published on the PBGC’s Web site, click here. (To return to the Compliance Alert text, click here.)
2	To see Segal’s October 2007 Bulletin, “Indexed Numbers for 2008: IRS Dollar Limits, Social Security Factors and the PBGC Guarantee Limit and Premiums,” click here. (To return to the Compliance Alert text, click here.)
3	To see a proposed PBGC regulation on the revisions in the variable rate premium, published May 31, 2007, click here. (To return to the Compliance Alert text, click here.)

Compliance Alert, The Segal Company's periodic electronic newsletter summarizing important developments affecting benefit plan compliance, is for informational purposes only. It is not intended to provide authoritative guidance. On all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their attorneys for legal advice.

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