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FY ’18 Budget Would Raise Fresh Revenue for the PBGC

The Pension Benefit Guaranty Corporation (PBGC) would have billions more to work with under the federal FY 2018 budget proposal unveiled May 23.

The Trump administration’s first budget includes provisions relevant to the PBGC that would:

  • make changes to PBGC premiums that would raise $21 billion;

  • accelerate the plan year 2027 payment date for both single and multiemployer premiums by one month while reversing a prior change in the payment date for plan year 2025 premiums;

  • provide that none of the funds available to the PBGC for fiscal year 2018 shall be available for obligations for administrative expenses in excess of $424,417,000; and

  • allow no more than $98,500,000 through Sept. 30, 2022, for costs associated with the acquisition, occupancy and related costs of headquarters space.

The budget also proposes the creation of a new variable rate premium and an exit premium in the multiemployer program. The administration estimates this would raise an additional $16 billion in premium revenue over the budget window and would fund the multiemployer program for the next 20 years.

The budget says that to the extent that the number of new plan participants in plans terminated by the PBGC exceeds 100,000 in fiscal year 2018, an amount not to exceed an additional $9,200,000 shall be available through Sept. 30, 2019, to cover administrative expenses for every 20,000 additional terminated participants. However, it would allow more to be spent to cover such expenses in the event of unforeseen and extraordinary pretermination expenses or extraordinary multiemployer program related expenses with the approval of the Office of Management and Budget and after the House and Senate appropriations committees are notified.

More information about the PBGC under the 2018 federal budget proposal is available here.