It’s not the first time, and it may not be the last if Congress doesn’t act. Julio Portalatin, CEO of consultant Mercer, is again speaking out against premium increases for the Pension Benefit Guaranty Corp. that went into effect with the passage of the Bipartisan Budget Act of 2015.
In April, the PBGC said in a report that premiums were not high enough to sustain its multiemployer insurance program. It did not, however, specify how much premiums should be increased to avoid a shortfall.
Congress sets the premiums, and while there is no variable rate premium in the multiemployer plan, there is a variable rate assessed on some sponsors in the agency’s single-employer program.
But there’s another wrinkle: While the money raised by the PBGC premiums is used strictly to pay pension benefits to workers whose employers have gone under financially, the premiums are counted as general revenue rather than designated solely for PBGC. That has spurred proposed bipartisan legislation, set forth in April by Reps. Jim Renacci, R-Ohio, and Mark Pocan, D-Wisconsin, “to eliminate a Washington-created budget gimmick and protect employees and their employers.”
H.R. 4955, the Pension and Budget Integrity Act, proposes that PBGC premiums be moved “off-budget,” to “[ensure] that Congress is raising premiums only if and when it is appropriate.”
Portalatin sent a letter last November advocating to the majority and minority leaders of both chambers of Congress that the increases included in the Bipartisan Budget Act be reconsidered. Now he’s throwing his weight behind H.R. 4955, and has written to the House Budget and Education and Workforce committees to support it — warning that massive premium increases are discouraging employers from providing pension plans at all.
The bill has gathered a number of cosponsors. In a statement about the bill, Pocan said, “This legislation will ensure that when Congress chooses to increase these premiums, it does so for the benefit of the PBGC and pension beneficiaries.”
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