PBGC runs two insurance programs that safeguard retirement benefits in different ways.
Lately, you may have heard about multiemployer plans and the financial troubles that some of them are having as described in our Projections Report. Currently, PBGC insures more than 10 million workers and retirees in about 1,400 multiemployer plans.
PBGC doesn't take responsibility for multiemployer plans; instead, we send financial assistance to plans that have run out of money to pay promised benefits. During FY 2013, PBGC paid $89 million in financial assistance to 44 multiemployer pension plans covering the benefits of nearly 50,000 retirees. An additional 21,000 people in these plans will receive benefits when they retire.
PBGC multiemployer guarantees are much lower than those in its single-employer program, so most multiemployer participants experience significant benefit cuts when their plans fail and PBGC becomes responsible for their pensions.
Our single-employer program insures the benefits of 32 million people in about 23,000 pension plans. When a company can't keep its plan going, we step in and take responsibility for paying benefits to all members of the plan. Over the years, PBGC has stepped in to pay benefits at well-known companies like United Airlines, Lehman Brothers, and Circuit City. In FY 2013, the agency paid $5.4 billion in benefits to more than 851,000 retirees in single-employer plans; another 596,000 people will receive benefits upon retirement age.
We've developed a webpage dedicated to information about PBGC multiemployer plans. The page provides detailed information and answers complex questions like what happens if PBGC's multiemployer program runs out of money.