The PBGC’s single-employer insurance program’s deficit narrowed in fiscal year 2016, but the multiemployer program’s deficit got worse, the Pension Benefit Guaranty Corp. said in its annual report for fiscal year 2016, which was released Wednesday.
The single employer deficit narrowed to $20.6 billion as of Sept. 30, the end of fiscal year 2016, from $24.1 billion a year earlier; while the multiemployer deficit rose to $58.8 billion from $52.3 billion a year earlier, the report said.
The improvement in the single-employer program was attributed primarily to investment and premium income and a low level of plan terminations during the year.
The growing deficit on the multiemployer side was due to more plans projected to run out of money within the next 10 years, and by lower interest rates used to value the PBGC’s liabilities. The program also takes in far less income from premiums than the single-employer program. In fiscal 2016, multiemployer program income totaled $425 million, made up of $282 million in premium revenue and $143 million in investment income.
“It is clear that more reform is needed to stabilize multiemployer pension plans and to extend the solvency of PBGC’s multiemployer program,” PBGC Director W. Thomas Reeder Jr. said in a statement.
That will require more bipartisan solutions from Congress, said John Kline, R-Minn., chairman of the House Education and the Workforce Committee. ”There is no escaping the fact that tough decisions must be made to shore up the fiscal health of the PBGC, modernize the multiemployer pension system and provide workers more retirement options,” Mr. Kline said in a statement.