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New PBGC Projections: Solvency of Multiemployer Program Fund Extended Three Years; Condition of Single-Employer Program Continues to Improve

September 28, 2015

WASHINGTON -The projected insolvency date for the insurance program for multiemployer pension plans, which cover more than 10 million Americans, has been delayed by three years, according to the FY 2014 Projections Report released today by the Pension Benefit Guaranty Corporation. The risk of program insolvency has decreased over the near term due primarily to the new premium revenues anticipated under the Multiemployer Pension Reform Act of 2014 (MPRA).  It is more likely than not that the program's assets will be depleted in 2025, compared with 2022 in last year's report, and the risk of insolvency grows rapidly thereafter.

Projections for the PBGC's insurance program for single-employer plans, which cover about 31 million people, show that the program's financial condition continues to be likely to improve and conclude that it is highly unlikely to run out of funds in the next 10 years. PBGC modeled 5,000 simulations for the 2014 Projections Report, and none showed that the program would be unable to pay the benefits it owes in 2025.

The Projections Report is PBGC's annual actuarial evaluation of its future operations and financial status. Its projections are not predictions, but rather provide a range of estimates of the future status of insured pension plans and their effect on PBGC's financial condition, based on hundreds of different economic scenarios.

Multiemployer Projections Show Modest Improvement

This year's report projects that the multiemployer program's FY 2014 deficit of $42.4 billion will decrease to, on average, $28 billion (measured in present value) for FY 2024. This decrease is the result of increased premiums under MPRA and PBGC's best estimates of how and when plans will use the new options for benefit suspension and partition available to them through MPRA. This decrease represents an improvement over last year's projections, which showed an average deficit of $49.6 billion at 2023.

For some plans facing insolvency within the next twenty years, MPRA allows trustees to permanently reduce benefit promises to participants if, by suspending benefits, the plan can remain solvent over the long term and preserve benefits at levels above the PBGC guarantee amounts. MPRA also gives PBGC new ways to help plans remain solvent by providing financial assistance by plan partition or merger. The improved deficit projection with MPRA assumptions reflects the likelihood that by using benefit reductions or partition options some troubled plans will not need PBGC financial assistance at all and others will require less. How many plans will choose to apply for benefit suspensions or PBGC financial assistance is still uncertain, but will have a significant impact on future multiemployer projections. While anticipated suspensions and partitions substantially reduce the magnitude of the projected PBGC deficits in 2024, they do not significantly change the projected insolvency of the fund.

This year's projections show that the multiemployer program's risk of running out of money has decreased since the prior report. However, it is still more likely than not that the program's assets will be depleted in 2025. Furthermore, the risk of insolvency increases over time, reaching 92 percent by 2034.

Single-Employer Program Continues Trend of Likely Improvement

The financial condition of PBGC's insurance program for single-employer plans remains likely to improve over the next decade. Under current estimates, the program's actual FY 2014 deficit of $19.3 billion would shrink to, on average, $4.9 billion at FY 2024 (measured in present value).

This year follows on the improving trend noted in last year's report, which projected, on average, a deficit of $7.6 billion at FY 2023.  But a wide range of outcomes remains possible ranging from large deficits to surpluses.

About PBGC and the Report

PBGC protects the pension benefits of more than 41 million Americans in private-sector pension plans. The agency is directly responsible for paying the benefits of about 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars. Its operations are financed by insurance premiums, investment income, and by assets and recoveries from failed plans.

In its multiemployer program during FY 2014, PBGC paid $97 million in financial assistance to 53 multiemployer pension plans covering the benefits of 52,000 retirees. An additional 23,000 people in these plans will receive benefits when they retire.

PBGC's single-employer program insures the benefits of 31 million workers and retirees in about 22,000 pension plans. In FY 2014, the agency paid $5.5 billion in benefits to more than 813,000 retirees in single-employer plans; another 595,000 people will receive benefits when they retire.

Each year PBGC issues its Projections Report, as required by the Employee Retirement Income Security Act. The report is PBGC's actuarial evaluation of its future operations and financial status.  To make its projections, PBGC uses separate Pension Insurance Modeling Systems for single-employer and multiemployer plans. Each modeling system runs many simulations drawn from hundreds of economic scenarios to derive a range of possible future outcomes. No single projection, however, represents expected results under either program. For more information, visit

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PBGC No. 15-09