WASHINGTON, D.C. — The Pension Benefit Guaranty Corporation (PBGC) today released the agency’s Fiscal Year (FY) 2023 Projections Report, which shows an improved financial outlook for both its Multiemployer and Single-Employer pension insurance programs. Together, these programs protect over 31 million workers and retirees in private sector defined benefit pension plans.
“PBGC’s insurance programs are financially strong and projected to remain so, and that’s good news for the workers and retirees who depend on PBGC for the security of their pension benefits,” said Acting Director Ann Y. Orr.
Multiemployer Program Projected Solvency Improves
Prior to the enactment of the Special Financial Assistance (SFA) Program as part the American Rescue Plan Act of 2021, the PBGC’s Multiemployer Insurance Program was on a path toward insolvency as early as 2026. The SFA Program provides relief for severely distressed multiemployer plans.
Projections indicate the Multiemployer Insurance Program, which covers about 11 million participants in about 1,360 plans, is now likely to remain financially sound for more than 40 years thanks to the relief provided through the SFA Program. Projected outcomes in this year’s report slightly improved compared to last year. This was driven by an increase in projected plan funding levels due to strong 2023 investment performance.
Single-Employer Program Net Position Projected to Grow
The FY 2023 Projections Report shows that the net position of the PBGC’s Single-Employer Program is expected to grow throughout the 10-year projection period – from $44.6 billion, as of September 30, 2023, to an estimated average of $71.6 billion in 10 years (in 2023 dollars).
Even under the most extreme downside economic scenarios, the Single-Employer Program does not fall into deficit during the projection period.
The Single-Employer Program covers about 20.6 million participants in about 23,500 pension plans.
About PBGC
PBGC protects the retirement security of over 31 million American workers, retirees, and beneficiaries in both single-employer and multiemployer private sector pension plans. The agency’s two insurance programs are legally separate and operationally and financially independent. PBGC is directly responsible for the benefits of nearly 1.4 million participants and beneficiaries in failed single-employer pension plans. The Single-Employer Program is financed by insurance premiums, investment income, and assets and recoveries from failed single-employer plans. The Multiemployer Program is financed by insurance premiums and investment income. Special financial assistance for financially troubled multiemployer plans is financed by general taxpayer monies.