Sec. 2. Rightsizing pension premiums
1,386 words·~6 min read·
/bill/115/hr/3596/ih/section-2A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 4006(a) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1306(a) ) is amended by adding at the end the following: Notwithstanding paragraph (3)(A)(i) and subject to subparagraphs
(B)and (C), the annual premium rate payable to the corporation by a single-employer plan for basic benefits guaranteed under this title is— in the case of a single-employer plan for any plan year beginning in a fiscal year with respect to which the average of the single-employer pension insurance program funded percentages for the 2 fiscal years immediately preceding such fiscal year is 110 percent or greater, an amount for each individual who is a participant in such plan during the plan year equal to the sum of $19 and an additional premium equal to the quotient (not to exceed $500) obtained by dividing— an amount equal to $9 for each $1,000 (or fraction thereof) of unfunded vested benefits under the plan as of the close of the preceding plan year, by the number of participants in such plan as of the close of the preceding plan year; in the case of a single-employer plan for any plan year beginning in a fiscal year with respect to which the average of the single-employer pension insurance program funded percentages for the 2 fiscal years immediately preceding such fiscal year is at least 100 percent but less than 110 percent, an amount for each individual who is a participant in such plan during the plan year equal to the sum of $30 and an additional premium equal to the quotient (not to exceed $500) obtained by dividing— an amount equal to $9 for each $1,000 (or fraction thereof) of unfunded vested benefits under the plan as of the close of the preceding plan year, by the number of participants in such plan as of the close of the preceding plan year; in the case of a single-employer plan for any plan year beginning in a fiscal year with respect to which the average of the single-employer pension insurance program funded percentages for the 2 fiscal years immediately preceding such fiscal year is at least 90 percent but less than 100 percent, an amount for each individual who is a participant in such plan during the plan year equal to the sum of $64 and an additional premium equal to the quotient (not to exceed $500) obtained by dividing— an amount equal to $28 for each $1,000 (or fraction thereof) of unfunded vested benefits under the plan as of the close of the preceding plan year, by the number of participants in such plan as of the close of the preceding plan year; notwithstanding clauses
(i)through (iii), in the case of a CSEC plan (as defined in section 210(f)) or single-employer plan maintained by a small employer for any plan year, an amount for each individual who is a participant in such plan during the plan year equal to the sum of $19 and an additional premium equal to the quotient (not to exceed $500) obtained by dividing— an amount equal to $9 for each $1,000 (or fraction thereof) of unfunded vested benefits under the plan as of the close of the preceding plan year, by the number of participants in such plan as of the close of the preceding plan year; and in any other case, the amount determined under paragraph (3)(A)(i). In the case of a single-employer plan maintained by an employer who has more than 500 employees but not more than 600 employees on the first day of the plan year, the annual premium rate payable to the corporation by such plan for basic benefits guaranteed under this title is an amount for each individual who is a participant in such plan during the plan year equal to the sum of— the annual premium rate that would be so payable by such plan if such plan were maintained by a small employer for such plan year, plus— the applicable percentage of the excess of— the annual premium rate so payable by such plan without regard to this subparagraph, over the annual premium rate that would be so payable by such plan as described under subclause (I). For purposes of this subparagraph, the applicable percentage is the ratio (expressed as a percentage) of— the number of employees of the employer to the extent such number exceeds 500, over 100. In the case of a multiple employer plan (other than a CSEC plan (as defined in section 210(f))), the annual premium rate payable to the corporation by such plan for basic benefits guaranteed under this title is the sum of the annual premiums that, if each employer maintaining such plan were treated as maintaining a separate plan in which— the number of participants equals the number of participants in the multiple employer plan who are employed (or formerly employed) by such employer, and the amount of unfunded vested benefits equals the portion of the unfunded vested benefits under the multiple employer plan attributable to such employer, would be imposed on each separate plan in accordance with this section. In determining the annual premiums that would be imposed on each of the separate plans described under this subparagraph, the determination of whether an employer is a small employer shall be made separately with respect to each employer maintaining the multiple employer plan. In the case of a single-employer plan maintained by a small employer who has 25 or fewer employees on the first day of the plan year (as determined under paragraph (3)(I)(ii)), the additional premium otherwise determined under subparagraph (A)(iv) shall not exceed $5 multiplied by the number of participants in the plan as of the close of the preceding plan year. For each plan year beginning in a calendar year after 2018, there shall be substituted for each of the first and second dollar amounts in clause
(ii)of subparagraph
(A)and the first, second, and third dollar amounts in clause
(iii)of such subparagraph an amount equal to the greater of— the product derived by multiplying each such amount by the ratio of— the national average wage index (as defined in section 209(k)(1) of the Social Security Act) for the first of the 2 calendar years preceding the calendar year in which such plan year begins, to the national average wage index (as so defined) for 2016; and each such amount as in effect for plan years beginning in the preceding calendar year. If any amount determined under this subparagraph is not a multiple of $1, such product shall be rounded to the nearest multiple of $1. For purposes of this paragraph: The term small employer means an employer who has 500 or fewer employees on the first day of the plan year. The term multiple employer plan means a single-employer plan maintained by more than one employer (as determined under section 210(a)). The term single-employer pension insurance program funded percentage for a fiscal year means the ratio (expressed as a percentage) of— the value of all assets held by the corporation in any trust or revolving fund on the last day of such fiscal year available for the payment of basic benefits guaranteed under section 4022, to the present value (as determined in accordance with section 303(h) without regard to paragraph (2)(C)(iv)) of the liabilities of the corporation attributable to such guaranteed benefits on the last day of such fiscal year. The term unfunded vested benefits has the meaning given such term in paragraph (3)(E)(iii), except that with respect to a CSEC plan (as defined in section 210(f)), such term means the excess of— the plan’s funding liability (as defined in section 306(j)(5)(C)), determined by only taking into account vested benefits, over the fair market value of plan assets for the plan year which are held by the plan on the valuation date. . Section 4006(a)(3)(B) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1306(a)(3)(B) ) is amended by inserting or paragraph
(9)after subparagraph (A)(i) . Section 4006(a)(3)(A) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1306 ) is amended in the matter preceding clause
(i)by inserting and paragraph
(9)after subparagraph
(C). The amendments made by this shall apply with respect to plan years beginning after December 31, 2017.
Connectionstraces to 1
Traces to 1 document
U.S. Code
Citation graph
cites case law
Sec. 2
Rightsizing pension premiums
Cites 1Cited by 0 across 0 sources