PBGC pension insurance premiums are set by Congress. They are a key determinant of whether PBGC has enough money to pay all benefits in the future, or whether the agency runs a deficit.
Premiums Due Each Year
All single-employer plans pay a flat-rate premium based on the number of participants
- Underfunded single-employer plans pay an additional variable-rate premium (VRP) based on the amount of unfunded vested benefits
- The VRP is capped at an amount based on the number of participants
Multiemployer plans pay a flat-rate premium based on the number of participants
These rates, including the VRP cap, are subject to indexing. For information about rates applicable for a particular plan year, see our "Premium Rates" table.
Interest Used to Calculate Variable-Rate Premium
Unless a plan has elected to use an alternative provided in the regulations, future benefit payments are discounted using three "spot segment rates" derived from a corporate bond curve.
- The first applies to benefits expected to be paid within five years of the first day of the plan year
- The second applies to the following 15 years
- The third applies to benefits expected to be paid after that
For information about segment rates applicable for a particular plan year, see our "VRP discount rate" table.
In certain circumstances involving distress and involuntary plan terminations, companies might have to pay a termination premium after PBGC trustees the plan. If the termination applies it is payable for three years and is equal to $1,250 per participant. The termination premium is not subject to indexing.