29 U.S.C. § 1306 : US Code - Section 1306: Premium rates

Search 29 U.S.C. § 1306 : US Code - Section 1306: Premium rates

(a) Schedules for premium rates and bases for application;
establishment, coverage, etc.
(1) The corporation shall prescribe such schedules of premium
rates and bases for the application of those rates as may be
necessary to provide sufficient revenue to the fund for the
corporation to carry out its functions under this subchapter. The
premium rates charged by the corporation for any period shall be
uniform for all plans, other than multiemployer plans, insured by
the corporation with respect to basic benefits guaranteed by it
under section 1322 of this title, and shall be uniform for all
multiemployer plans with respect to basic benefits guaranteed by it
under section 1322a of this title.
(2) The corporation shall maintain separate schedules of premium
rates, and bases for the application of those rates, for -
(A) basic benefits guaranteed by it under section 1322 of this
title for single-employer plans,
(B) basic benefits guaranteed by it under section 1322a of this
title for multiemployer plans,
(C) nonbasic benefits guaranteed by it under section 1322 of
this title for single-employer plans,
(D) nonbasic benefits guaranteed by it under section 1322a of
this title for multiemployer plans, and
(E) reimbursements of uncollectible withdrawal liability under
section 1402 of this title.
The corporation may revise such schedules whenever it determines
that revised schedules are necessary. Except as provided in section
1322a(f) of this title, in order to place a revised schedule
described in subparagraph (A) or (B) in effect, the corporation
shall proceed in accordance with subsection (b)(1) of this section,
and such schedule shall apply only to plan years beginning more
than 30 days after the date on which a joint resolution approving
such revised schedule is enacted.
(3)(A) Except as provided in subparagraph (C), the annual premium
rate payable to the corporation by all plans for basic benefits
guaranteed under this subchapter is -
(i) in the case of a single-employer plan, for plan years
beginning after December 31, 1990, an amount equal to the sum of
$19 plus the additional premium (if any) determined under
subparagraph (E) for each individual who is a participant in such
plan during the plan year;
(ii) in the case of a multiemployer plan, for the plan year
within which the date of enactment of the Multiemployer Pension
Plan Amendments Act of 1980 falls, an amount for each individual
who is a participant in such plan for such plan year equal to the
sum of -
(I) 50 cents, multiplied by a fraction the numerator of which
is the number of months in such year ending on or before such
date and the denominator of which is 12, and
(II) $1.00, multiplied by a fraction equal to 1 minus the
fraction determined under clause (i),
(iii) in the case of a multiemployer plan, for plan years
beginning after September 26, 1980, an amount equal to -
(I) $1.40 for each participant, for the first, second, third,
and fourth plan years,
(II) $1.80 for each participant, for the fifth and sixth plan
years,
(III) $2.20 for each participant, for the seventh and eighth
plan years, and
(IV) $2.60 for each participant, for the ninth plan year, and
for each succeeding plan year.
(B) The corporation may prescribe by regulation the extent to
which the rate described in subparagraph (A)(i) applies more than
once for any plan year to an individual participating in more than
one plan maintained by the same employer, and the corporation may
prescribe regulations under which the rate described in
subparagraph (A)(iii) will not apply to the same participant in any
multiemployer plan more than once for any plan year.
(C)(i) If the sum of -
(I) the amounts in any fund for basic benefits guaranteed for
multiemployer plans, and
(II) the value of any assets held by the corporation for
payment of basic benefits guaranteed for multiemployer plans,
is for any calendar year less than 2 times the amount of basic
benefits guaranteed by the corporation under this subchapter for
multiemployer plans which were paid out of any such fund or assets
during the preceding calendar year, the annual premium rates under
subparagraph (A) shall be increased to the next highest premium
level necessary to insure that such sum will be at least 2 times
greater than such amount during the following calendar year.
(ii) If the board of directors of the corporation determines that
an increase in the premium rates under subparagraph (A) is
necessary to provide assistance to plans which are receiving
assistance under section 1431 of this title and to plans the board
finds are reasonably likely to require such assistance, the board
may order such increase in the premium rates.
(iii) The maximum annual premium rate which may be established
under this subparagraph is $2.60 for each participant.
(iv) The provisions of this subparagraph shall not apply if the
annual premium rate is increased to a level in excess of $2.60 per
participant under any other provisions of this subchapter.
(D)(i) Not later than 120 days before the date on which an
increase under subparagraph (C)(ii) is to become effective, the
corporation shall publish in the Federal Register a notice of the
determination described in subparagraph (C)(ii), the basis for the
determination, the amount of the increase in the premium, and the
anticipated increase in premium income that would result from the
increase in the premium rate. The notice shall invite public
comment, and shall provide for a public hearing if one is
requested. Any such hearing shall be commenced not later than 60
days before the date on which the increase is to become effective.
(ii) The board of directors shall review the hearing record
established under clause (i) and shall, not later than 30 days
before the date on which the increase is to become effective,
determine (after consideration of the comments received) whether
the amount of the increase should be changed and shall publish its
determination in the Federal Register.
(E)(i) The additional premium determined under this subparagraph
with respect to any plan for any plan year shall be an amount equal
to the amount determined under clause (ii) divided by the number of
participants in such plan as of the close of the preceding plan
year.
(ii) The amount determined under this clause for any plan year
shall be an amount equal to $9.00 for each $1,000 (or fraction
thereof) of unfunded vested benefits under the plan as of the close
of the preceding plan year.
(iii) For purposes of clause (ii) -
(I) Except as provided in subclause (II) or (III), the term
"unfunded vested benefits" means the amount which would be the
unfunded current liability (within the meaning of section
1082(d)(8)(A) of this title) if only vested benefits were taken
into account.
(II) The interest rate used in valuing vested benefits for
purposes of subclause (I) shall be equal to the applicable
percentage of the annual yield on 30-year Treasury securities for
the month preceding the month in which the plan year begins. For
purposes of this subclause, the applicable percentage is 80
percent for plan years beginning before July 1, 1997, 85 percent
for plan years beginning after June 30, 1997, and before the 1st
plan year to which the first tables prescribed under section
1082(d)(7)(C)(ii)(II) of this title apply, and 100 percent for
such 1st plan year and subsequent plan years.
(III) In the case of any plan year for which the applicable
percentage under subclause (II) is 100 percent, the value of the
plan's assets used in determining unfunded current liability
under subclause (I) shall be their fair market value.
(IV) In the case of plan years beginning after December 31,
2001, and before January 1, 2004, subclause (II) shall be applied
by substituting "100 percent" for "85 percent". Subclause (III)
shall be applied for such years without regard to the preceding
sentence. Any reference to this clause or this subparagraph by
any other sections or subsections (other than sections 1305,
1310, 1311, and 1343 of this title) shall be treated as a
reference to this clause or this subparagraph without regard to
this subclause.
(V) In the case of plan years beginning after December 31,
2003, and before January 1, 2006, the annual yield taken into
account under subclause (II) shall be the annual rate of interest
determined by the Secretary of the Treasury on amounts invested
conservatively in long-term investment grade corporate bonds for
the month preceding the month in which the plan year begins. For
purposes of the preceding sentence, the Secretary of the Treasury
shall determine such rate of interest on the basis of 2 or more
indices that are selected periodically by the Secretary of the
Treasury and that are in the top 3 quality levels available. The
Secretary of the Treasury shall make the permissible range, and
the indices and methodology used to determine the rate, publicly
available.
(iv) No premium shall be determined under this subparagraph for
any plan year if, as of the close of the preceding plan year,
contributions to the plan for the preceding plan year were not less
than the full funding limitation for the preceding plan year under
section 412(c)(7) of title 26.
(4) The corporation may prescribe, subject to the enactment of a
joint resolution in accordance with this section or section
1322a(f) of this title, alternative schedules of premium rates, and
bases for the application of those rates, for basic benefits
guaranteed by it under sections 1322 and 1322a of this title based,
in whole or in part, on the risks insured by the corporation in
each plan.
(5)(A) In carrying out its authority under paragraph (1) to
establish schedules of premium rates, and bases for the application
of those rates, for nonbasic benefits guaranteed under sections
1322 and 1322a of this title the premium rates charged by the
corporation for any period for nonbasic benefits guaranteed shall -

(i) be uniform by category of nonbasic benefits guaranteed,
(ii) be based on the risks insured in each category, and
(iii) reflect the experience of the corporation (including
experience which may be reasonably anticipated) in guaranteeing
such benefits.
(B) Notwithstanding subparagraph (A), premium rates charged to
any multiemployer plan by the corporation for any period for
supplemental guarantees under section 1322a(g)(2) of this title may
reflect any reasonable considerations which the corporation
determines to be appropriate.
(6)(A) In carrying out its authority under paragraph (1) to
establish premium rates and bases for basic benefits guaranteed
under section 1322 of this title with respect to single-employer
plans, the corporation shall establish such rates and bases in
coverage schedules in accordance with the provisions of this
paragraph.
(B) The corporation may establish annual premiums for single-
employer plans composed of the sum of -
(i) a charge based on a rate applicable to the excess, if any,
of the present value of the basic benefits of the plan which are
guaranteed over the value of the assets of the plan, not in
excess of 0.1 percent, and
(ii) an additional charge based on a rate applicable to the
present value of the basic benefits of the plan which are
guaranteed.
The rate for the additional charge referred to in clause (ii) shall
be set by the corporation for every year at a level which the
corporation estimates will yield total revenue approximately equal
to the total revenue to be derived by the corporation from the
charges referred to in clause (i) of this subparagraph.
(C) The corporation may establish annual premiums for single-
employer plans based on -
(i) the number of participants in a plan, but such premium
rates shall not exceed the rates described in paragraph (3),
(ii) unfunded basic benefits guaranteed under this subchapter,
but such premium rates shall not exceed the limitations
applicable to charges referred to in subparagraph (B)(i), or
(iii) total guaranteed basic benefits, but such premium rates
shall not exceed the rates for additional charges referred to in
subparagraph (B)(ii).
If the corporation uses two or more of the rate bases described in
this subparagraph, the premium rates shall be designed to produce
approximately equal amounts of aggregate premium revenue from each
of the rate bases used.
(D) For purposes of this paragraph, the corporation shall by
regulation define the terms "value of assets" and "present value of
the benefits of the plan which are guaranteed" in a manner
consistent with the purposes of this subchapter and the provisions
of this section.
(b) Revised schedule; Congressional procedures applicable
(1) In order to place a revised schedule (other than a schedule
described in subsection (a)(2)(C), (D), or (E) of this section) in
effect, the corporation shall transmit the proposed schedule, its
proposed effective date, and the reasons for its proposal to the
Committee on Ways and Means and the Committee on Education and
Labor of the House of Representatives, and to the Committee on
Finance and the Committee on Labor and Human Resources of the
Senate.
(2) The succeeding paragraphs of this subsection are enacted by
Congress as an exercise of the rulemaking power of the Senate and
the House of Representatives, respectively, and as such they shall
be deemed a part of the rules of each House, respectively, but
applicable only with respect to the procedure to be followed in
that House in the case of resolutions described in paragraph (3).
They shall supersede other rules only to the extent that they are
inconsistent therewith. They are enacted with full recognition of
the constitutional right of either House to change the rules (so
far as relating to the procedure of that House) at any time, in the
same manner and to the same extent as in the case of any rule of
that House.
(3) For the purpose of the succeeding paragraphs of this
subsection, "resolution" means only a joint resolution, the matter
after the resolving clause of which is as follows: "The proposed
revised schedule transmitted to Congress by the Pension Benefit
Guaranty Corporation on __ is hereby approved.", the blank space
therein being filled with the date on which the corporation's
message proposing the rate was delivered.
(4) A resolution shall be referred to the Committee on Ways and
Means and the Committee on Education and Labor of the House of
Representatives and to the Committee on Finance and the Committee
on Labor and Human Resources of the Senate.
(5) If a committee to which has been referred a resolution has
not reported it before the expiration of 10 calendar days after its
introduction, it shall then (but not before) be in order to move to
discharge the committee from further consideration of that
resolution, or to discharge the committee from further
consideration of any other resolution with respect to the proposed
adjustment which has been referred to the committee. The motion to
discharge may be made only by a person favoring the resolution,
shall be highly privileged (except that it may not be made after
the committee has reported a resolution with respect to the same
proposed rate), and debate thereon shall be limited to not more
than 1 hour, to be divided equally between those favoring and those
opposing the resolution. An amendment to the motion is not in
order, and it is not in order to move to reconsider the vote by
which the motion is agreed to or disagreed to. If the motion to
discharge is agreed to or disagreed to, the motion may not be
renewed, nor may another motion to discharge the committee be made
with respect to any other resolution with respect to the same
proposed rate.
(6) When a committee has reported, or has been discharged from
further consideration of a resolution, it is at any time thereafter
in order (even though a previous motion to the same effect has been
disagreed to) to move to proceed to the consideration of the
resolution. The motion is highly privileged and is not debatable.
An amendment to the motion is not in order, and it is not in order
to move to reconsider the vote by which the motion is agreed to or
disagreed to. Debate on the resolution shall be limited to not more
than 10 hours, which shall be divided equally between those
favoring and those opposing the resolution. A motion further to
limit debate is not debatable. An amendment to, or motion to
recommit, the resolution is not in order, and it is not in order to
move to reconsider the vote by which the resolution is agreed to or
disagreed to.
(7) Motions to postpone, made with respect to the discharge from
committee, or the consideration of, a resolution and motions to
proceed to the consideration of other business shall be decided
without debate. Appeals from the decisions of the Chair relating to
the application of the rules of the Senate or the House of
Representatives, as the case may be, to the procedure relating to a
resolution shall be decided without debate.
(c) Rates for plans for basic benefits
(1) Except as provided in subsection (a)(3) of this section, and
subject to paragraph (2), the rate for all plans for basic benefits
guaranteed under this subchapter with respect to plan years ending
after September 2, 1974, is -
(A) in the case of each plan which was not a multiemployer plan
in a plan year -
(i) with respect to each plan year beginning before January
1, 1978, an amount equal to $1 for each individual who was a
participant in such plan during the plan year,
(ii) with respect to each plan year beginning after December
31, 1977, and before January 1, 1986, an amount equal to $2.60
for each individual who was a participant in such plan during
the plan year, and (!1)
(iii) with respect to each plan year beginning after December
31, 1985, and before January 1, 1988, an amount equal to $8.50
for each individual who was a participant in such plan during
the plan year, and
(iv) with respect to each plan year beginning after December
31, 1987, and before January 1, 1991, an amount equal to $16
for each individual who was a participant in such plan during
the plan year, and
(B) in the case of each plan which was a multiemployer plan in
a plan year, an amount equal to 50 cents for each individual who
was a participant in such plan during the plan year.
(2) The rate applicable under this subsection for the plan year
preceding September 1, 1975, is the product of -
(A) the rate described in the preceding sentence; and
(B) a fraction -
(i) the numerator of which is the number of calendar months
in the plan year which ends after September 2, 1974, and before
the date on which the new plan year commences, and
(ii) the denominator of which is 12.