PBGC Releases FY 2016 Projections Report
PBGC recently issued our FY 2016 Projections Report, which forecasts the future financial status of our Multiemployer and Single-Employer Pension Insurance Programs. This year’s report shows a continuation of the trends we’ve seen in the two programs for the past few years. Estimates show our Single-Employer Program improving and our Multiemployer Program getting closer to insolvency. Our estimates come from computer models that run hundreds of differing economic scenarios, resulting in a range of possible outcomes.
2016 Projections Report Results
Single-Employer Program: Under current estimates, the Single-Employer Program’s actual 2016 deficit of $21 billion will likely turn into a surplus over the next 10 years. If you are receiving benefits under a single-employer plan, PBGC has assets to pay your benefits for many years to come.
Multiemployer Program: Absent changes in law or additional resources, the Multiemployer Program is likely to run out of money by the end of 2025. Our report shows the Multiemployer Program’s FY 2016 deficit of $59 billion will likely increase over time. We run many projections, and, on average, the deficit is expected to rise to almost $80 billion by FY 2026.
As the demand for PBGC financial assistance from insolvent multiemployer plans increases, it will further strain PBGC’s depleting assets — leading to estimated insolvency of the multiemployer insurance fund by the end of 2025. If that happens, we won’t have the money to pay PBGC guarantees at current levels to multiemployer plan participants when their plans run out of money.
The 2016 Projections Report shows that more than 1.2 million people are in “critical and declining” multiemployer plans. As these plans become insolvent, participants’ benefits will be reduced to PBGC’s guarantee amount. In recent insolvencies, this meant benefit cuts by more than half for over 40 percent of the participants.
Here are some additional resources to help you learn more:
- Multiemployer 101: Understanding the Difference between Single and Multiemployer Plans
- More information about PBGC and the Multiemployer Insurance Program
- To find out if you are in a single-employer or multiemployer plan, you can contact your union or HR department, or refer to your plan’s Annual Funding Notice or Summary Plan Description.