Premium Requirements of the Single Employer Pension Plan Insurance Program
Published: Mar 20, 1984. Publicly Released: Mar 20, 1984.
GAO discussed the Pension Benefit Guaranty Corporation's request for a $7 premium rate for its single employer pension plan insurance program. The Corporation was established to administer a self-financing program which insures the benefits of about 29 million participants in 106,000 private pension plans. GAO revised its suggested premium rate for the program upward to $8.50 which it believes may be needed to cover claims and administrative expenses and retire the deficit within 5 years. GAO noted that there are uncertainties in selecting a premium rate and believes that the $7 premium proposed by the Corporation is the lowest that should be provided. In a prior report, GAO recommended that Congress consider: (1) requiring the corporation to provide information in its annual report to Congress on the adequacy of its existing premium rate as well as recommended changes; or (2) providing an automatic annual adjustment to the premium rate. GAO continues to believe that one of these options should be implemented.