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Update on Bipartisan Budget Act of 2013

The recently passed Bipartisan Budget Act of 2013 (BBA), effective January 1, 2014, includes an increase in fixed and variable Pension Benefit Guaranty Corporation (PBGC) premiums estimated at $7.9 billion.1

This provision underscores a focus on increasing revenue sources in the budget process and highlights the PBGC deficit estimated at $35.7 billion2 as of September 3, 2013.

Plan sponsors should consider the impact of these fees
when evaluating:

Funding strategies
Dynamic de-risking strategies
Pension risk transfer strategies

Sources:

1 http://blogs.wsj.com/washwire/2013/12/11/budget-deals-pension-premium-boost-draws-protests/
2 http://www.pbgc.gov/Documents/2013-annual-report.pdf#page=9