This entry is part of the Director's Hub blog series. You'll hear from our Director, Tom Reeder, about the importance of preserving pension plans and protecting retirement security. Check out Tom's bio to learn more about him.
On November 15, we issued our Fiscal Year 2016 Annual Report. The report describes our accomplishments and gives a snapshot of the financial condition of our insurance programs. Here are a few highlights:
- We paid $5.7 billion in benefits to nearly 840,000 retirees and beneficiaries in failed single-employer plans.
- We paid $113 million in financial assistance to 65 insolvent multiemployer plans so they could pay guaranteed benefits to over 59,000 retirees and beneficiaries.
- The retirees we serve gave us a score of 90 on the American Customer Satisfaction Index. This score is among the best in the public and private sectors.
- We negotiated almost $3 billion in financial assurance to protect 367,000 people in plans at risk from corporate events and transactions.
On our finances — the good news is that the financial condition of our single-employer program improved by $3.5 billion during FY 2016. The program's deficit - a snapshot of assets compared to liabilities — improved from a deficit of $24.1 billion at the end of FY 2015 to $20.6 billion at the end of FY 2016. Our projections indicate that the single-employer program is likely to continue to improve in the coming years, though improvement is not guaranteed.
Unfortunately, the financial condition of our multiemployer program continues to worsen. The program has a record-high deficit of $58.8 billion, $6.5 billion worse than last year. This was primarily due to a drop in interest factors used to measure the value of PBGC's future financial assistance payments, and the identification of 11 additional multiemployer plans that terminated or are projected to run out of money within the next 10 years. If no action is taken to fix the program, it is likely to run out of money by the end of 2025, and there is considerable risk that it could run out before then.
The multiemployer program covers about 10 million people who depend on multiemployer plans for their retirement income. Of that group, over a million are in plans that are expected to run out of money over the next 20 years. The multiemployer program requires significant reform in order to help those troubled plans and their participants.
We are committed to working with Congress on long-term solutions that will shore up the multiemployer pension system so that people can rely on it long into the future.