4006.3—Premium rate.
Subject to the provisions of § 4006.5 (dealing with exemptions and special rules) and § 4006.7 (dealing with premiums for certain terminated single-employer plans), the premium paid for basic benefits guaranteed under section 4022(a) or section 4022A(a) of ERISA shall equal the flat-rate premium under paragraph (a) of this section plus, in the case of a single-employer plan, the variable-rate premium under paragraph (b) of this section.
(a) Flat-rate premium.
The flat-rate premium is equal to the number of participants in the plan on the participant count date, multiplied by the applicable flat premium rate determined under paragraph (c) of this section.
(b) Variable-rate premium.
(1) In general.
Subject to the limitation in paragraph (b)(2) of this section, the variable-rate premium is $9 for each $1,000 (or fraction thereof) of a single-employer plan's unfunded vested benefits for the premium payment year, as determined under § 4006.4.
(2) Cap on variable-rate premium.
If a plan is described in paragraph (b)(3) of this section for the premium payment year, the variable-rate premium does not exceed $5 multiplied by the square of the number of participants in the plan on the last day of the plan year preceding the premium payment year. For example, if the number of participants in the plan on the last day of the plan year preceding the premium payment year is 20, the variable-rate premium does not exceed $2,000 ($5 × 20 2 = $5 × 400 = $2,000).
(3) Plans eligible for cap.
A plan is described in this paragraph (b)(3) for the premium payment year if the aggregate number of employees of all employers in the plan's controlled group on the first day of the premium payment year is 25 or fewer.
(4)
Meaning of “employee.” For purposes of paragraph (b)(3) of this section, the aggregate number of employees is determined in the same manner as under section 410(b)(1) of the Code, taking into account the provisions of section 414(m) and (n) of the Code, but without regard to section 410(b)(3), (4), and (5) of the Code.
(i)
The applicable flat premium rate for plan years beginning in the calendar year preceding the calendar year in which the premium payment year begins, or
(ii)
The adjusted flat rate determined under paragraph (d) of this section for the premium payment year.
(d) Adjusted flat rate.
The adjusted flat rate for a premium payment year beginning after 2006 is determined by—
(i)
The national average wage index (as defined in section 209(k)(1) of the Social Security Act) for the first of the two calendar years preceding the calendar year in which the premium payment year begins, to
(2)
Rounding the result to the nearest multiple of $1 (rounding up any unrounded result that equals some whole number of dollars plus 50 cents).