The Pension Benefit Guaranty Corporation announced on October 14, 2026 that for 2027 premiums for multiemployer pension plans will be a flat $42 per participant. This represents a 5% increase from 2026 rates (a $2 increase) and a 40% increase from rate levels 10 years ago ($30 per participant). The increase continues the upward trend of premium rates to combat inflation, strengthen the PBGC’s financial condition, and continue the agency’s ability to provide a safety net for workers and retirees who rely on their pension benefits.
The PBGC is a federal agency that helps protect pension benefits for workers and retirees. Multiemployer pension plans are required to pay annual insurance premiums to the PBGC based on the number of participants in the plan. These premiums fund a federal insurance program that provides financial assistance to multiemployer pension plans that become insolvent and cover the costs operating the insurance program.
Multiemployer pension plan premiums are based on headcount, and plan fiduciaries should consider prudent steps to control PBGC premium costs. This may include:
- Maintaining accurate participant records. Aside from ensuring administrative efficiency and accuracy, maintaining accurate participant records will ensure that plan headcounts for PBGC premium purposes are correct. Consistent participant outreach to update participant records can also help identify deceased, lost, or missing participants who may be artificially increasing headcount.
- Identifying participant deaths. Identifying participant deaths is vital to preventing pension benefit overpayments, but timely identification of deaths can also help reduce headcount. Consider engaging a commercial death certification service and other means of participant outreach to identify individuals who should no longer be included in the plan’s headcount.
- Maximizing the ability to cash out small pension benefits. SECURE 2.0 Act of 2022 increased cash-out limits for defined benefit pension plans from $5,000 to $7,000. Consider reviewing the plan to ensure its provisions maximize the ability to cash out small balances and reduce overall headcount.
How We Can Help
We routinely assist multiemployer pension plans with the review of their governing plan documents, as well as their policies, procedures, and administrative processes, to identify opportunities to reduce cost.
PBGC premiums are a cost that have been top of mind as PBGC premium rates continue to climb. Our team is available to help multiemployer plans and plan fiduciaries understand available strategies for ensuring an accurate headcount and resulting PBGC premium cost savings.