On Monday, November 1, 2015, President Obama signed into law the Bipartisan Budget Act of 2015 (the “BBA”) which brings familiar changes for sponsors of defined benefit pension plans. Similar to the Moving Ahead for Progress in the 21st Century Act in 2012 (“MAP-21”), the BBA provides relief from pension funding obligations while increasing PBGC premiums. The following summarizes the two major changes under the BBA that affect pension plans.
The increased premiums contained in the BBA are even higher than the amounts originally proposed and reported. The increased rates are as follows:
The BBA provides that after 2019, the fixed premium will be indexed for inflation. The BBA also accelerates the due date for PGBC premiums by one month for plan years beginning in 2025. Unlike Map-21, the BBA does not affect PBGC premiums for multiemployer plans.