Rightsizing Pension Premiums Act of 2017
This bill amends the Employee Retirement Income Security Act of 1974 (ERISA) to: (1) modify the formula that the Pension Benefit Guaranty Corporation (PBGC) uses to calculate the funded percentage of single-employer pension plans, and (2) reduce single-employer PBGC premiums for pension plans that are sponsored by certain small employers or have specified PBGC funded percentages.
The bill also prohibits the budget effects of provisions that change PBGC premiums from being counted for the purposes of determining budget points of order for legislation in the House or the Senate.
(The PBGC is a federal agency that insures the benefits of private sector, defined benefit pension plans. The PBGC is financed by insurance premiums paid by sponsors of the plans, investment income, assets from pension plans taken over by the PBGC, and recoveries from the companies formerly responsible for the plans.)
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3596 Introduced in House (IH)]
<DOC>
115th CONGRESS
1st Session
H. R. 3596
To amend the Employee Retirement Income Security Act of 1974 to adjust
single-employer premiums, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 28, 2017
Mr. Kelly of Pennsylvania (for himself and Mr. Kind) introduced the
following bill; which was referred to the Committee on Education and
the Workforce, and in addition to the Committees on Rules, and the
Budget, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Employee Retirement Income Security Act of 1974 to adjust
single-employer premiums, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Rightsizing Pension Premiums Act of
2017''.
SEC. 2. RIGHTSIZING PENSION PREMIUMS.
(a) In General.--Section 4006(a) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1306(a)) is amended by adding at the
end the following:
``(9) Premium adjustments for small employers and based on
pbgc funded percentage.--
``(A) In general.--Notwithstanding paragraph
(3)(A)(i) and subject to subparagraphs (B) and (C), the
annual premium rate payable to the corporation by a
single-employer plan for basic benefits guaranteed
under this title is--
``(i) in the case of a single-employer plan
for any plan year beginning in a fiscal year
with respect to which the average of the
single-employer pension insurance program
funded percentages for the 2 fiscal years
immediately preceding such fiscal year is 110
percent or greater, an amount for each
individual who is a participant in such plan
during the plan year equal to the sum of $19
and an additional premium equal to the quotient
(not to exceed $500) obtained by dividing--
``(I) an amount equal to $9 for
each $1,000 (or fraction thereof) of
unfunded vested benefits under the plan
as of the close of the preceding plan
year, by
``(II) the number of participants
in such plan as of the close of the
preceding plan year;
``(ii) in the case of a single-employer
plan for any plan year beginning in a fiscal
year with respect to which the average of the
single-employer pension insurance program
funded percentages for the 2 fiscal years
immediately preceding such fiscal year is at
least 100 percent but less than 110 percent, an
amount for each individual who is a participant
in such plan during the plan year equal to the
sum of $30 and an additional premium equal to
the quotient (not to exceed $500) obtained by
dividing--
``(I) an amount equal to $9 for
each $1,000 (or fraction thereof) of
unfunded vested benefits under the plan
as of the close of the preceding plan
year, by
``(II) the number of participants
in such plan as of the close of the
preceding plan year;
``(iii) in the case of a single-employer
plan for any plan year beginning in a fiscal
year with respect to which the average of the
single-employer pension insurance program
funded percentages for the 2 fiscal years
immediately preceding such fiscal year is at
least 90 percent but less than 100 percent, an
amount for each individual who is a participant
in such plan during the plan year equal to the
sum of $64 and an additional premium equal to
the quotient (not to exceed $500) obtained by
dividing--
``(I) an amount equal to $28 for
each $1,000 (or fraction thereof) of
unfunded vested benefits under the plan
as of the close of the preceding plan
year, by
``(II) the number of participants
in such plan as of the close of the
preceding plan year;
``(iv) notwithstanding clauses (i) through
(iii), in the case of a CSEC plan (as defined
in section 210(f)) or single-employer plan
maintained by a small employer for any plan
year, an amount for each individual who is a
participant in such plan during the plan year
equal to the sum of $19 and an additional
premium equal to the quotient (not to exceed
$500) obtained by dividing--
``(I) an amount equal to $9 for
each $1,000 (or fraction thereof) of
unfunded vested benefits under the plan
as of the close of the preceding plan
year, by
``(II) the number of participants
in such plan as of the close of the
preceding plan year; and
``(v) in any other case, the amount
determined under paragraph (3)(A)(i).
``(B) Small employer premium phase-out.--
``(i) In general.--In the case of a single-
employer plan maintained by an employer who has
more than 500 employees but not more than 600
employees on the first day of the plan year,
the annual premium rate payable to the
corporation by such plan for basic benefits
guaranteed under this title is an amount for
each individual who is a participant in such
plan during the plan year equal to the sum of--
``(I) the annual premium rate that
would be so payable by such plan if
such plan were maintained by a small
employer for such plan year, plus--
``(II) the applicable percentage of
the excess of--
``(aa) the annual premium
rate so payable by such plan
without regard to this
subparagraph, over
``(bb) the annual premium
rate that would be so payable
by such plan as described under
subclause (I).
``(ii) Applicable percentage.--For purposes
of this subparagraph, the `applicable
percentage' is the ratio (expressed as a
percentage) of--
``(I) the number of employees of
the employer to the extent such number
exceeds 500, over
``(II) 100.
``(C) Special rule for multiple employer plans.--In
the case of a multiple employer plan (other than a CSEC
plan (as defined in section 210(f))), the annual
premium rate payable to the corporation by such plan
for basic benefits guaranteed under this title is the
sum of the annual premiums that, if each employer
maintaining such plan were treated as maintaining a
separate plan in which--
``(i) the number of participants equals the
number of participants in the multiple employer
plan who are employed (or formerly employed) by
such employer, and
``(ii) the amount of unfunded vested
benefits equals the portion of the unfunded
vested benefits under the multiple employer
plan attributable to such employer,
would be imposed on each separate plan in accordance
with this section. In determining the annual premiums
that would be imposed on each of the separate plans
described under this subparagraph, the determination of
whether an employer is a small employer shall be made
separately with respect to each employer maintaining
the multiple employer plan.
``(D) Special rule for small employers with 25 or
fewer employees.--In the case of a single-employer plan
maintained by a small employer who has 25 or fewer
employees on the first day of the plan year (as
determined under paragraph (3)(I)(ii)), the additional
premium otherwise determined under subparagraph (A)(iv)
shall not exceed $5 multiplied by the number of
participants in the plan as of the close of the
preceding plan year.
``(E) Wage indexing of certain amounts.--For each
plan year beginning in a calendar year after 2018,
there shall be substituted for each of the first and
second dollar amounts in clause (ii) of subparagraph
(A) and the first, second, and third dollar amounts in
clause (iii) of such subparagraph an amount equal to
the greater of--
``(i) the product derived by multiplying
each such amount by the ratio of--
``(I) the national average wage
index (as defined in section 209(k)(1)
of the Social Security Act) for the
first of the 2 calendar years preceding
the calendar year in which such plan
year begins, to
``(II) the national average wage
index (as so defined) for 2016; and
``(ii) each such amount as in effect for
plan years beginning in the preceding calendar
year.
If any amount determined under this subparagraph is not
a multiple of $1, such product shall be rounded to the
nearest multiple of $1.
``(F) Definitions.--For purposes of this paragraph:
``(i) Small employer.--The term `small
employer' means an employer who has 500 or
fewer employees on the first day of the plan
year.
``(ii) Multiple employer plan.--The term
`multiple employer plan' means a single-
employer plan maintained by more than one
employer (as determined under section 210(a)).
``(iii) Single-employer pension insurance
program funded percentage.--The term `single-
employer pension insurance program funded
percentage' for a fiscal year means the ratio
(expressed as a percentage) of--
``(I) the value of all assets held
by the corporation in any trust or
revolving fund on the last day of such
fiscal year available for the payment
of basic benefits guaranteed under
section 4022, to
``(II) the present value (as
determined in accordance with section
303(h) without regard to paragraph
(2)(C)(iv)) of the liabilities of the
corporation attributable to such
guaranteed benefits on the last day of
such fiscal year.
``(iv) Unfunded vested benefits.--The term
`unfunded vested benefits' has the meaning
given such term in paragraph (3)(E)(iii),
except that with respect to a CSEC plan (as
defined in section 210(f)), such term means the
excess of--
``(I) the plan's funding liability
(as defined in section 306(j)(5)(C)),
determined by only taking into account
vested benefits, over
``(II) the fair market value of
plan assets for the plan year which are
held by the plan on the valuation
date.''.
(b) Individuals Participating in More Than One Plan.--Section
4006(a)(3)(B) of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1306(a)(3)(B)) is amended by inserting ``or paragraph (9)''
after ``subparagraph (A)(i)''.
(c) Conforming Amendment.--Section 4006(a)(3)(A) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1306) is amended in
the matter preceding clause (i) by inserting ``and paragraph (9)''
after ``subparagraph (C)''.
(d) Effective Date.--The amendments made by this shall apply with
respect to plan years beginning after December 31, 2017.
SEC. 3. CORRECTION OF THE BUDGET EFFECTS OF PREMIUM CHANGES.
(a) In General.--In the Senate and the House of Representatives,
for purposes of determining points of order under the Congressional
Budget Act of 1974 (2 U.S.C. 621 et seq.) or any concurrent resolution
on the budget, any provision that increases or decreases, or extends
the increase or decrease of, any premiums payable to the Pension
Benefit Guaranty Corporation shall not be counted in estimating the
level of budget authority, outlays, or revenues--
(1) in the Senate, for any bill, joint resolution,
amendment, amendment between the Houses, conference report, or
motion; or
(2) in the House of Representatives, for any bill or joint
resolution, or amendment thereto or conference report thereon.
(b) Rules of Senate and House of Representatives.--Congress adopts
the provisions of this section--
(1) as an exercise of the rulemaking power of the Senate
and the House of Representatives, respectively, and as such is
deemed a part of the rules of each House, respectively, and
supersede other rules only to the extent that they are
inconsistent with such rules; and
(2) 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 other rule of that
House.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Education and the Workforce, and in addition to the Committees on Rules, and the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Education and the Workforce, and in addition to the Committees on Rules, and the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Education and the Workforce, and in addition to the Committees on Rules, and the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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