The Pension Benefit Guaranty Corp. has proposed some relief forsponsors of single and multiemployer pension plans who aretardy on premium payments.

The federal agency charged with guarantying the country’sprivate-sector pension plans says that as premiumshave risen, so have the penalties on late payments.

"We think penalties should be no more than necessary toencourage timely payments," said PBGC Director Tom Reeder in arelease. Reeder was appointed and confirmed to lead the agency lastyear. "I'm committed to doing everything I can to help companieskeep their pension plans."

Under the existing regime, PBGC has a two-tiered penaltystructure that rewards self-correction.

If sponsors have to be notified by PBGC, the agency applies a 5percent monthly charge on the amount of delinquent payment. Whensponsors self-correct and advise PBGC of the late premium, they areonly charged 1 percent of the late payment per month. Latepenalties are capped at 100 percent and 50 percent,respectively.

Under the proposed new rule, those penalties would be reduced byhalf. And for sponsors with otherwise good payment histories andwho pay late premiums promptly, the penalty will be reduced by 80percent, according to a PBGC press release.

For a sponsor who owes $100,000 in late premiums and qualifiesfor the full reduction in late fees, a $5,000 fee would be reducedto $1,000.

The Bipartisan Budget Act of 2015insisted on new increases in both the per-participant and variablepremium rates single-plan sponsors pay to PBGC.

The per-participant amount for the flat-rate premium was raisedto $64 for this year, up from $57 in 2015. The variable rate wasraised to $30 per $1,000 of unfunded liabilities, up from $24 in2015.

For plans beginning in 2017, the per-participant flat rate jumpsto $68. The year after it increases to $73, and for plans beginningin 2019 it increases to $78.

The variable rate will be incrementally increased to $38 per$1,000 of unfunded liabilities by 2019.