A MESSAGE FROM THE DIRECTOR
The Pension Benefit Guaranty Corporation protects the retirement security of nearly 37 million American workers, retirees and their families in private-sector defined benefit pension plans. The protection PBGC provides encourages employers and workers to voluntarily establish and participate in pension plans, make pension benefit commitments, and set money aside today to be available to make retirement payments many years in the future. However, these benefits are at constant risk due to events such as bankruptcy or insolvency. Without PBGC’s protection, hundreds of thousands of people would have lost their life’s savings. PBGC has been providing this protection since the enactment of the Employee Retirement Income Security Act of 1974.
This year, we paid benefits to more than 861,000 retirees in 4,919 failed single-employer plans. An additional 532,000 retirees are scheduled to receive their benefits from us when they retire. The Corporation also provided financial assistance to 81 multiemployer plans covering 62,300 retirees. Our goal is that these retirees and beneficiaries never miss a check.
The sound financial condition of our insurance programs, Single-Employer and Multiemployer, is vital for us to meet our mission. This year’s report shows that the financial condition of these two programs remains in stark contrast. The financial status of the Single-Employer Program shows continuous improvement and reached a positive net position this year. However, the Multiemployer Program remains in deep deficit and we project that under current law it will run out of funds within the next several years.
The challenges we face in the Multiemployer Program are increasing as the date of the program’s insolvency grows closer. As more time passes, the changes required to prevent insolvency become more disruptive and painful for participants, plans and employers. This year, I testified before the Joint Select Committee on Solvency of Multiemployer Pension Plans. I described the status of the Multiemployer Program, laying out the severity of the problem, the consequences of what could happen if the program becomes insolvent and the need for Congress to enact a viable and fair solution.
With these challenges at the forefront, we will continue to use the limited tools that we have on hand to help the multiemployer community and troubled plans. This year, we issued guidance pertaining to multiemployer plans, such as withdrawal liability guidance and a facilitated merger rule under the Multiemployer Pension Reform Act of 2014, to help improve the health of some multiemployer plans over the long term.
PBGC continues to serve as a source of expertise and assistance to the pension community and the public. We have engaged and educated stakeholders, the media and the public and have received important feedback from those who interact with us. We remain committed to providing excellent service to all our stakeholders.
Our success is made possible by the talented and professional staff at PBGC. I am truly grateful for their passion in focusing their wide-ranging talents on ensuring that American retirees and their families enjoy the financial security that they worked a lifetime to achieve.
W. Thomas Reeder
November 15, 2018