WASHINGTON — The Pension Benefit Guaranty Corporation's deficit increased to about $36 billion in FY 2013, due largely to the declining financial condition of multiemployer plans. PBGC's annual report also noted the agency's continued high scores for customer satisfaction.
"Pension plans continue to provide retirement security for tens of millions," said PBGC Director Josh Gotbaum. "We should not let the problems of a few plans overshadow the reliable retirement security provided by the majority, but neither can we ignore them. PBGC stands ready to help, but PBGC's growing deficit is a reminder that our current resources are inadequate. Without adequate funding we can't pay benefits or preserve pensions."
Multiemployer plans provide lifetime income to more than 10 million people in 1,400 plans, working for hundreds of thousands of businesses in industries such as construction and manufacturing. Because more plans will fail within the next decade, PBGC's multiemployer insurance program's deficit rose to more than $8.2 billion, compared with $5.2 billion last year.
Deficit in Single-Employer Program Declines
The deficit in the program for single-employer pension plans narrowed to about $27.4 billion, down from $29.1 billion in 2012. The program insures the pensions of nearly 32 million workers and retirees in 23,000 ongoing plans sponsored by private-sector employers. The single-employer program's potential exposure to future pension losses from financially weak companies was estimated at about $292 billion compared to about $295 billion last fiscal year.
Maintaining Quality Customer Service
Retirees receiving benefits continue to rate PBGC as one of the best in government for its commitment to customer service. The agency ranks in the top 3 percent in a survey measuring 154 categories of customer responsiveness. Retirees gave PBGC a score of 90 on the American Customer Satisfaction Index (ACSI), more than 20 points above the government average. A score of 80 or higher is considered excellent, whether for a government agency or a private business.
Working to Preserve Pensions
PBGC works to preserve plans, not just wait until they fail. Some companies in bankruptcy can afford to keep their plans, and PBGC works to see that they do. In FY 2013, Eastman Kodak Co., the Tribune Company, Dynegy Inc., and others emerged from bankruptcy with their plans intact; 161,000 people are better off as a result. If, as expected, American Airlines emerges from bankruptcy in December, 130,000 of American's employees will keep their pensions.
About PBGC's Financial Report
PBGC's financial statements are prepared in accordance with generally accepted accounting principles in the U.S. and the financial statements for fiscal year 2013 received an unmodified (previously referred to as unqualified, colloquially "clean") audit opinion for the 21st consecutive year. CliftonLarsonAllen LLP performed the audit under contract with the PBGC Office of Inspector General, who oversees the audit. See the complete annual report.
PBGC protects the pension benefits of more than 42 million Americans in private-sector pension plans. The agency is directly responsible for paying the benefits of more than 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars and never has. Its operations are financed by insurance premiums, investment income, and with assets and recoveries from failed plans. For more information, visit PBGC.gov.