Manufacturers have always been committed to offering workers robust benefit packages, particularly retirement plan benefits. The vast majority of manufacturers provide retirement benefits to their workers and many of these workers are enrolled in defined benefit pension plans. There are costs associated with offering these types of pension benefits, however, including the fees that employers must pay to the Pension Benefit Guarantee Corporation in the form of insurance premiums.
Discussions about how to pay for a budget deal have reportedly included PBGC premium increases on a list of ways to raise revenue. Another premium increase is premature given that employers are still coping with the $9 billion PBGC premium increase enacted in the 2012 MAP-21 highway law. As a result of the last increase, the flat rate premium will have increased by 40 percent (from $35 per participant to $42 per participant) in just two years, and in three years, the variable rate premium will have increased by over 100 percent — which translates into millions of dollars in additional costs for companies that offer pension benefits to their employees.
Out of any industry, manufacturers account for the largest share of premiums paid to the PBGC (manufacturers paid 48.1% or $1.073 billion of the total premiums paid to the PBGC in 2010), so any further increase in PBGC premiums could divert additional funds away from investments in participant benefits, business expansion, job creation, and improving the economy.
While the NAM supports the budget conferees efforts to reach a budget deal that addresses the nation’s important fiscal challenges without increasing taxes, manufacturers know firsthand that further increasing PBGC premiums is effectively a tax on employers that voluntarily provide defined benefit pension plan benefits.
Before joining the NAM, Crooks served as senior manager of government affairs for Financial Executives International, where she advocated on behalf of the association’s membership of senior-level business executives on tax, corporate treasury, pension and benefit issues. Previously, she worked as a legislative assistant to Rep. Michael Castle (R-DE), a senior member of the House Committee on Financial Services. Christina handled financial services issues for the Congressman during consideration of the Dodd-Frank Act, and also worked on small business and judiciary issues. Christina earned a B.A. in Political Science from the University of Delaware and a M.A. in Political Science from American University.
Latest posts by Christina Crooks (see all)
- Ohio Companies to Treasury: 385 Regulations Negatively Impact Business - September 27, 2016
- House Committee Approves Bill to Repeal Pay Ratio, Conflict Minerals - September 15, 2016
- Congress Increases Pressure Against Treasury’s Section 385 Regulations - August 22, 2016