For Immediate Release
August 2, 2023 - PBGC
WASHINGTON, D.C. ・The Pension Benefit Guaranty Corporation (PBGC) today released the agency’s Fiscal Year (FY) 2022 Projections Report. The report shows a continuing positive outlook for both its Single-Employer and Multiemployer pension insurance programs, which together protect the pensions of over 33.5 million workers and retirees.
The new projections show that the Multiemployer Insurance Program, which covers 11.2 million participants, is likely to remain solvent more than 40 years out - due to the 2021 enactment of the Special Financial Assistance (SFA) Program as part the American Rescue Plan Act (ARP). The Single-Employer Insurance Program covers 22.3 million participants and is projected to continue to strengthen.
“These projections clearly reflect the positive impact ARP has made on the multiemployer pension system and on the pension security of millions of workers and retirees covered by troubled multiemployer plans,” said PBGC Director Gordon Hartogensis. “And the positive outlook for PBGC insurance programs is good news for the defined benefit pension system overall.”
The Projections Report provides a 10-year projected financial outlook for the agency’s two insurance programs. The report also provides additional projections over 40 years for the Multiemployer Program.
The new projections show that the Multiemployer Program is likely to remain solvent for more than 40 years, with a median projected insolvency after 2062, the end of the projection period. These results are consistent with last year’s projections. Prior to enactment of ARP, PBGC projected that its Multiemployer Program would become insolvent in 2026.
The projected financial condition of the Multiemployer Program is modestly improved from last year’s report because plan asset losses in 2022 were more than offset by the significant increase in expected future plan asset returns due to the sharp rise in interest rates during 2022.
The new projections include an updated estimate of the total amount of SFA to be paid under the program of $79.7 billion. The updated estimate incorporates data from plan applications and is lower than PBGC’s previous estimate of $82.7 billion and lower than CBO’s September 2022 estimate of $90.4 billion.
The FY 2022 Projections Report shows that the Single-Employer Program is expected to remain strong throughout the 10-year projected period. Consistent with last year’s report, the projections show no scenarios in which the Single-Employer Program runs out of money within the next 10 years. The projected growth in the net financial position over the upcoming 10-year period is due primarily to expected claims trending lower due to improved plan funding.
The projected outcomes vary with an average FY 2032 net financial position of $63.6 billion (in 2022 dollars), up from last year’s FY 2031 projection of $53.3 billion (in 2021 dollars).
PBGC protects the retirement security of over 33 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 more than 1.5 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. Special financial assistance for financially troubled multiemployer plans is financed by general taxpayer monies.
Press Release Number: 23-033