29 U.S.C. § 1306 — Premium rates

(a) Premium schedules and rates. (1) The corporation must set premium-rate schedules and rules for applying those rates that will bring in enough money for the fund to let the corporation perform its duties under this subchapter. For any period, the corporation must charge the same rates to all insured plans other than multiemployer plans for basic benefits guaranteed under section 1322. It must separately charge the same rates to all insured multiemployer plans for basic benefits guaranteed under section 1322a. (2) The corporation must keep separate premium schedules and rules for applying the rates for: (A) basic benefits guaranteed under section 1322 for single-employer plans; (B) basic benefits guaranteed under section 1322a for multiemployer plans; (C) nonbasic benefits guaranteed under section 1322 for single-employer plans; (D) nonbasic benefits guaranteed under section 1322a for multiemployer plans; and (E) reimbursements for uncollectible withdrawal liability under section 1402. The corporation may revise these schedules whenever it decides that revisions are needed. Except as provided in section 1322a(f), to put a revised schedule under subparagraph (A) or (B) into effect, the corporation must use the process in subsection (b)(1). That schedule may apply only to plan years that begin more than 30 days after the date on which Congress enacts a joint resolution approving it. (3)(A) Unless subparagraph (C) provides otherwise, the yearly premium payable to the corporation by all plans for basic benefits guaranteed under this subchapter is as follows: (i) A single-employer plan other than a CSEC plan (a term this section does not define; it refers to the definition in section 1060(f)(1)) must pay, for each person who participates during the plan year, the additional premium, if any, under subparagraph (E), plus: (I) $30 for plan years beginning after December 31, 2005, and before January 1, 2013; (II) $42 for plan years beginning after December 31, 2012, and before January 1, 2014; (III) $49 for plan years beginning after December 31, 2013, and before January 1, 2015; (IV) $57 for plan years beginning after December 31, 2014, and before January 1, 2016; (V) $64 for plan years beginning after December 31, 2015, and before January 1, 2017; (VI) $69 for plan years beginning after December 31, 2016, and before January 1, 2018; (VII) $74 for plan years beginning after December 31, 2017, and before January 1, 2019; and (VIII) $80 for plan years beginning after December 31, 2018. (ii) For the plan year that includes the date the Multiemployer Pension Plan Amendments Act of 1980 was enacted, a multiemployer plan must pay for each participant an amount equal to: (I) 50 cents multiplied by a fraction whose numerator is the number of months in that year ending on or before the enactment date and whose denominator is 12; plus (II) $1 multiplied by 1 minus that fraction. (iii) For multiemployer plan years beginning after September 26, 1980, and before January 1, 2006, the amount per participant is: (I) $1.40 for each of the first four plan years; (II) $1.80 for the fifth and sixth plan years; (III) $2.20 for the seventh and eighth plan years; and (IV) $2.60 for the ninth plan year and every later plan year. (iv) For a multiemployer plan year beginning after December 31, 2005, and before January 1, 2013, the amount is $8 for each participant during the applicable plan year. (v) For a multiemployer plan year beginning after December 31, 2012, and before January 1, 2015, the amount is $12 for each participant during the applicable plan year. (vi) For a multiemployer plan year beginning after December 31, 2014, and before January 1, 2031, the amount is $26 for each participant during the applicable plan year. (vii) For a CSEC plan (a term this section does not define; it refers to the definition in section 1060(f)(1)) with a plan year beginning after December 31, 2018, the amount for each participant during the plan year is the additional premium, if any, under subparagraph (E), plus $19. (viii) For a multiemployer plan year beginning after December 31, 2030, the amount is $52 for each participant during the applicable plan year. (B) The corporation may use regulations to decide how often the rate in subparagraph (A)(i) applies in one plan year to a person participating in more than one plan maintained by the same employer. It may also use regulations so that the rate in subparagraph (A)(iii) or (iv) does not apply more than once in one plan year to the same participant in any multiemployer plan. (C)(i) If, for a calendar year, the money in any fund for multiemployer basic benefits plus the value of the corporation's assets held to pay those benefits is less than twice the amount of multiemployer basic benefits that the corporation paid from those funds or assets during the preceding calendar year, the annual rates under subparagraph (A) must increase to the next highest premium level needed to make that sum at least twice that amount during the following calendar year. (ii) If the corporation's board of directors decides that higher rates under subparagraph (A) are needed to help plans receiving assistance under section 1431 and plans that the board finds are reasonably likely to need that assistance, the board may order the increase. (iii) The highest yearly rate that may be established under this subparagraph is $2.60 per participant. (iv) This subparagraph does not apply if another provision of this subchapter increases the yearly rate above $2.60 per participant. (D)(i) At least 120 days before an increase under subparagraph (C)(ii) is to take effect, the corporation must publish in the Federal Register a notice stating the board's determination, its basis, the amount of the premium increase, and the expected increase in premium income. The notice must invite public comments and provide a public hearing if someone requests one. The hearing must begin at least 60 days before the increase takes effect. (ii) The board must review the hearing record. At least 30 days before the increase takes effect, it must decide, after considering the comments, whether to change the increase and publish its decision in the Federal Register. (E)(i) Unless subparagraph (I) provides otherwise, the additional premium for a plan year is: (I) the amount under clause (ii) divided by the number of plan participants at the end of the preceding plan year; (II) no more than $400 for plan years beginning in a calendar year after 2012 and before 2016; and (III) no more than $500 for plan years beginning in a calendar year after 2015. (ii) The amount used in clause (i) equals the applicable dollar amount under paragraph (8) for each $1,000, or fraction of $1,000, of unfunded vested benefits at the end of the preceding plan year. (iii) Except as provided in clause (v), “unfunded vested benefits” means the excess, if any, of: (I) the plan's funding target under section 1083(d), calculated for the plan year using only vested benefits and the interest rate described in clause (iv), over (II) the fair market value of the plan assets held by the plan on the valuation date. (iv) The interest rate for valuing benefits under clause (iii)(I) must be the first, second, or third segment rate for the month before the month in which the plan year begins. The rate is determined under section 1083(h)(2)(C), without taking into account any adjustment under clause (iv) of that section. It is determined as though section 1083(h)(2)(D) used, instead of the 24-month average, the monthly yields for the preceding month on investment-grade corporate bonds with varying maturities and in the top three quality levels. (v) For a CSEC plan (a term this section does not define; it refers to the definition in section 1060(f)(1)), for plan years beginning after December 31, 2018, “unfunded vested benefits” means the excess, if any, of: (I) the plan's funding liability under section 1085a(j)(5)(C), calculated for the plan year using only vested benefits, over (II) the fair market value of the plan assets held by the plan on the valuation date. (F) For each plan year beginning in a calendar year after 2006 and before 2013, the rate in subparagraph (A)(i) is replaced by the greater of: (i) that rate multiplied by a fraction whose numerator is the national average wage index (a term this section does not define; it refers to section 409(k)(1) of title 42) for the first of the two calendar years before the calendar year in which the plan year begins, and whose denominator is that index for 2004 (or 2012 for plan years beginning after calendar year 2014); or (ii) the rate under subparagraph (A)(i) for plan years beginning in the preceding calendar year. If the amount under this subparagraph is not a whole-dollar multiple, the product must be rounded to the nearest dollar. (G) For each plan year beginning in a calendar year after 2019, replace the rate in subparagraph (A)(i) with the greater of the same two calculations: the rate multiplied by the ratio of the national average wage index for the first of the two preceding calendar years to that index for 2017, or the prior year's rate under subparagraph (A)(i). Round a product that is not a whole-dollar multiple to the nearest dollar. (H) For each plan year beginning in a calendar year after 2006, replace the rate in subparagraph (A)(iv) with the greater of that rate multiplied by the ratio of the national average wage index for the first of the two preceding calendar years to that index for 2004, or the prior year's rate under subparagraph (A)(iv). Round a product that is not a whole-dollar multiple to the nearest dollar. (I)(i) If an employer has 25 or fewer employees on the first day of the plan year, the additional premium under subparagraph (E) for each participant may not exceed $5 multiplied by the number of participants at the end of the preceding plan year. (ii) To decide whether the employer has 25 or fewer employees, count all employees of all members of the contributing sponsor's controlled group. If two or more contributing sponsors maintain the plan, count the employees of all contributing sponsors and their controlled groups. (J) For each plan year beginning in a calendar year after 2013, replace the rate in subparagraph (A)(v) with the greater of that rate multiplied by the ratio of the national average wage index for the first of the two preceding calendar years to that index for 2011, or the prior year's rate under subparagraph (A)(v). Round a product that is not a whole-dollar multiple to the nearest dollar. (K) For each plan year beginning in a calendar year after 2013 and before 2016, replace the dollar amount in subparagraph (E)(i)(II) with the greater of that amount multiplied by the ratio of the national average wage index for the first of the two preceding calendar years to that index for 2011, or that amount for the preceding calendar year. Round a product that is not a whole-dollar multiple to the nearest dollar. (L) For each plan year beginning in a calendar year after 2016, replace the dollar amount in subparagraph (E)(i)(III) with the greater of that amount multiplied by the ratio of the national average wage index for the first of the two preceding calendar years to that index for 2014, or that amount for the preceding calendar year. Round a product that is not a whole-dollar multiple to the nearest dollar. (M) For each plan year beginning in a calendar year after 2015, replace the dollar amount in subparagraph (A)(vi) with the greater of that amount multiplied by the ratio of the national average wage index for the first of the two preceding calendar years to that index for 2013, or that amount for the preceding calendar year. Round a product that is not a whole-dollar multiple to the nearest dollar. (N) For each plan year beginning in a calendar year after 2031, replace the dollar amount in subparagraph (A)(viii) with the greater of that amount multiplied by the ratio of the national average wage index for the first of the two preceding calendar years to that index for 2029, or that amount for the preceding calendar year. Round a product that is not a whole-dollar multiple to the nearest dollar. (4) Subject to approval of a joint resolution under this section or section 1322a(f), the corporation may set alternative premium schedules and rules for applying them for basic benefits guaranteed under sections 1322 and 1322a. The alternatives may be based partly or entirely on the risks the corporation insures in each plan. (5)(A) For nonbasic benefits guaranteed under sections 1322 and 1322a, premium rates must be uniform within each category of nonbasic guaranteed benefits, based on the risks insured in that category, and based on the corporation's experience, including experience it may reasonably expect, in guaranteeing those benefits. (B) Despite subparagraph (A), rates charged to a multiemployer plan for supplemental guarantees under section 1322a(g)(2) may reflect any reasonable considerations that the corporation decides are appropriate. (6)(A) For single-employer plans' basic benefits guaranteed under section 1322, the corporation must establish rates and rate bases in coverage schedules under this paragraph. (B) The corporation may set an annual premium equal to: (i) a charge based on a rate of no more than 0.1 percent applied to the excess, if any, of the present value of the plan's guaranteed basic benefits over the value of the plan's assets; plus (ii) an additional charge based on a rate applied to the present value of the plan's guaranteed basic benefits. For each year, the corporation must set the rate for the additional charge at a level it estimates will produce total revenue approximately equal to the total revenue from the charge under clause (i). (C) The corporation may instead set annual premiums for single-employer plans based on: (i) the number of participants, but the rate may not exceed the rates in paragraph (3); (ii) unfunded basic benefits guaranteed under this subchapter, but the rate may not exceed the limits for the charge under subparagraph (B)(i); or (iii) total guaranteed basic benefits, but the rate may not exceed the rate for the additional charge under subparagraph (B)(ii). If it uses two or more of these bases, the corporation must design the rates to produce approximately equal total premium revenue from each base it uses. (D) For this paragraph, the corporation must define by regulation “value of assets” and “present value of the benefits of the plan which are guaranteed” in a way consistent with this subchapter and this section. This section does not otherwise define those quoted terms. (7) Premium rate for certain terminated single-employer plans. (A) General rule. If a single-employer plan terminates under section 1341(c)(2)(B)(ii) or (iii), or under section 1342, the corporation must be paid, for each applicable 12-month period, a premium of $1,250 multiplied by the number of people who participated in the plan immediately before the termination date. This premium is in addition to every other premium under this section. (B) Special rule for plans terminated in bankruptcy reorganization. If a single-employer plan terminates under section 1341(c)(2)(B)(ii) or section 1342 while a bankruptcy-reorganization proceeding is pending under chapter 11 of title 11 or a similar law of a State or political subdivision of a State, subparagraph (A) does not apply until the person is discharged or the case is dismissed. The same rule applies if a case described in section 1341(c)(2)(B)(i), filed by or against that person, has been converted by that date into a case seeking reorganization. (C) Applicable 12-month period. For subparagraph (A): (i) In general. “Applicable 12-month period” means: (I) the 12-month period beginning with the first month after the month containing the termination date; and (II) each of the first two 12-month periods immediately after the period in subclause (I). (ii) Plans terminated in bankruptcy reorganization. If subparagraph (B) applies to the plan's termination for one or more persons described there, the period in clause (i)(I) is the 12-month period beginning with the first month after the month containing the earliest date on which every such person is discharged or the case involving that person is dismissed. (D) Coordination with section 1307. (i) Despite section 1307: (I) premiums under this paragraph are due within 30 days after the beginning of each applicable 12-month period; and (II) the designated payor is the person who was the contributing sponsor immediately before the termination date. (ii) The fifth sentence of section 1307(a) does not apply to premiums determined under this paragraph. (8) Applicable dollar amount for the variable-rate premium. For paragraph (3)(E)(ii): (A) General rule. Unless subparagraphs (B), (C), and (E) provide otherwise, the applicable dollar amount is: (i) $9 for plan years beginning in a calendar year before 2015; (ii) for plan years beginning in 2015, the amount in effect for plan years beginning in 2014 after applying subparagraph (C); (iii) for plan years beginning after 2015, the amount in effect for plan years beginning in 2015 after applying subparagraph (C); (iv) for plan years beginning after 2016, the amount in effect for plan years beginning in 2016 after applying subparagraph (C); (v) for plan years beginning after 2017, the amount in effect for plan years beginning in 2017 after applying subparagraph (C); (vi) for plan years beginning after 2018, the amount in effect for plan years beginning in 2018 after applying subparagraph (C); (vii) for plan years beginning after 2019, the amount in effect for plan years beginning in 2019 after applying subparagraph (C); and (viii) $52 for plan years beginning after 2023. (B) Inflation adjustment. For each plan year beginning in a calendar year after 2012 and before 2024, replace the applicable dollar amount under subparagraph (A) with the greater of: (i) that amount for plan years beginning in that calendar year multiplied by a fraction whose numerator is the national average wage index for the first of the two calendar years before the calendar year in which the plan year begins, and whose denominator is that index for the base year; or (ii) the applicable dollar amount for plan years beginning in the preceding calendar year. If the product under this subparagraph is not a whole-dollar multiple, round it to the nearest dollar. (C) Additional increases. After applying subparagraph (B), increase the applicable dollar amount by: (i) $4 for plan years beginning in 2014; (ii) $10 for plan years beginning in 2015; (iii) $5 for plan years beginning in 2016; (iv) $3 for plan years beginning in 2017; (v) $4 for plan years beginning in 2018; and (vi) $4 for plan years beginning in 2019. (D) Base year. For subparagraph (B), the base year is: (i) 2010 for plan years beginning in 2013 or 2014; (ii) 2012 for plan years beginning in 2015; (iii) 2013 for plan years beginning after 2015; (iv) 2014 for plan years beginning after 2016; (v) 2015 for plan years beginning after 2017; (vi) 2016 for plan years beginning after 2018; and (vii) 2017 for plan years beginning after 2019 and before 2024. (E) CSEC plans. For a CSEC plan (a term this section does not define; it refers to the definition in section 1060(f)(1)), the applicable dollar amount is $9. (b) Revised schedules and congressional procedures. (1) To put a revised schedule into effect, other than a schedule described in subsection (a)(2)(C), (D), or (E), the corporation must send the proposed schedule, its proposed effective date, and the reasons for proposing it to the House Committees on Ways and Means and Education and Labor and the Senate Committees on Finance and Labor and Human Resources. (2) Congress enacts the remaining paragraphs of this subsection as an exercise of the rulemaking power of the Senate and House. They are part of each chamber's rules, but only for the procedure in that chamber for the resolutions described in paragraph (3). They override other rules only when inconsistent with them. Either chamber may change its rules about its own procedure at any time, in the same way and to the same extent as for any other rule. (3) For the remaining paragraphs, “resolution” means only a joint resolution whose matter after the resolving clause says: “The proposed revised schedule transmitted to Congress by the Pension Benefit Guaranty Corporation on __ is hereby approved.” The blank must contain the date on which the corporation delivered its message proposing the rate. (4) A resolution must be referred to the House Committees on Ways and Means and Education and Labor and the Senate Committees on Finance and Labor and Human Resources. (5) If a committee has not reported a referred resolution within 10 calendar days after its introduction, a supporter may move to discharge the committee from considering that resolution, or another resolution about the same proposed adjustment. The motion cannot be made before that time. It is highly privileged, except that it cannot be made after the committee reports a resolution about the same proposed rate. Debate on the motion may last no more than one hour, divided equally between supporters and opponents. Amendments to the motion are not allowed, and no motion may reconsider the vote on it. After a discharge motion is agreed to or rejected, it cannot be renewed, and another discharge motion cannot be made about any other resolution concerning the same proposed rate. (6) After a committee reports a resolution or is discharged from considering it, a motion to consider the resolution is in order at any time, even if an earlier motion with the same purpose was rejected. The motion is highly privileged and not debatable. It cannot be amended, and its vote cannot be reconsidered. Debate on the resolution may last no more than 10 hours, divided equally between supporters and opponents. A motion to further limit debate is not debatable. Amendments to the resolution and a motion to send it back to committee are not allowed, and its vote cannot be reconsidered. (7) Motions to postpone the discharge from committee or consideration of a resolution, and motions to proceed to other business, must be decided without debate. Appeals from the presiding officer's decisions about applying the Senate's or House's rules to the resolution procedure must also be decided without debate. (c) Rates for basic benefits. (1) Except as provided in subsection (a)(3), and subject to paragraph (2), for plan years ending after September 2, 1974, the rate for all plans for basic benefits guaranteed under this subchapter is: (A) For a plan that was not a multiemployer plan in the plan year: (i) $1 for each participant for a plan year beginning before January 1, 1978; (ii) $2.60 for each participant for a plan year beginning after December 31, 1977, and before January 1, 1986; (iii) $8.50 for each participant for a plan year beginning after December 31, 1985, and before January 1, 1988; and (iv) $16 for each participant for a plan year beginning after December 31, 1987, and before January 1, 1991. (B) For a plan that was a multiemployer plan in the plan year, 50 cents for each participant. (2) For the plan year preceding September 1, 1975, the applicable rate is the product of: (A) the rate described in the sentence before this paragraph; and (B) a fraction whose numerator is the number of calendar months in the plan year that end after September 2, 1974, and before the date the new plan year begins, and whose denominator is 12.