ERIC: Say 'No' to PBGC Premium Hike

April 22, 2005 ( - The ERISA Industry Committee (ERIC) has come out in opposition to the House-proposed Pension Benefit Guaranty Corporation (PBGC) premium hike, saying that it will cost jobs and leave workers with less retirement money.

>According to a  news release  from the ERIC, leaders of the US House should be urged to accept provisions in the Senate Resolution regarding the PBGC premium increase. Under a House plan, there would be a $18.1 billion tax increase on companies who provide defined benefit plans through the premiums they pay to have the plans insured. Under the Senate plan – which is supported by the Bush Administration – this amount would only go up by around $2 billion over the next five years (See White House to Congress: PBGC Needs Help ).

>The current premium stands at $19 per employee per year. The Senate version would raise this to $30, where the House version would raise it to $102, according to ERIC.

>ERIC said that if companies have to pay premiums above a certain amount, then they will not offer such benefits or will cut jobs. Although it does not oppose raising the premiums, the group does oppose the hikes under the House bill. “The Senate provisions should be adopted in the budget resolution conference report,” ERIC stated.

>PBGC premium hikes were one component in the Bush Administration’s pension reform package unveiled earlier this year and were designed to properly fund the private-sector pension insurer, officials said. (See  Chao Releases Administration DB Reform Proposal ). More information about the Administration’s package is  here .