Multiemployer Insurance Program Fact Sheet
What is a Multiemployer Plan?
- A collectively bargained pension arrangement involving unrelated employers, usually in a common industry, such as construction, trucking, textiles, or coal mining
- Different from single-employer plans, which may be sponsored by either one employer (pursuant or not pursuant to a collective bargaining agreement) or by several unrelated employers, but not pursuant to a collective bargaining agreement
- Many multiemployer plans determine the participant's benefit on a flat dollar amount for each year of service
How is the Multiemployer Program Funded?
- The program is funded and maintained separately from PBGC's other insurance program, which covers only single-employer plans
- For 2013, each multiemployer plan pays an annual insurance premium of $12 per participant to PBGC
- PBGC provides financial assistance to plans that are unable to pay basic PBGC-guaranteed benefits when due
- Before a plan receives financial assistance from PBGC, it must suspend payment of all benefits in excess of the guarantee level
- PBGC receives no assets from failed multiemployer plans
What Are the Guarantee Limits?
- The guarantee limit for someone with 30 years of service is $12,870
- Since 1980: PBGC has provided financial assistance to 81 multiemployer plans
- During 2012: 49 plans received assistance
- Until 2003: PBGC's multiemployer insurance program had shown growing financial strength since 1980
- Since 2003: The program has reported a deficit every year
- End of FY 2012:
- The program's deficit stood at $5.2 billion
- The program had assets of $1.8 billion and total liabilities of $7.0 billion