PBGC premiums to rise under budget deal

The effect of the premium hikes could increase the carrying costs of unfunded pension liabilities by more than 3 percent.

By Dan Berman | Updated on December 18, 2013

The budget approved by Congress on Wednesday raises premiums companies must pay to the Pension Benefits Guaranty Corp., a point that might cause many employers to settle their retirement plan liabilities through lump sum payments or by buying annuities.

The effect of the premium hikes, according to Aon Hewitt, could increase the carrying costs of unfunded pension liabilities by more than 3 percent. That would cause companies to consider derisking their pension plans.

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