Deficit in the single-employer program halved in the year while multiemployer increased $6.3 billion
The PBGC's single-employer insurance program's deficit improved in fiscal year 2017, while the multiemployer program's deficit worsened, said the Pension Benefit Guaranty Corp.'s annual report for fiscal year 2017, released Thursday.
The single-employer deficit dropped to $10.9 billion as of Sept. 30, the end of the fiscal year, down from $20.6 billion last year. The multiemployer deficit rose to $65.1 billion from $58.8 billion the previous year.
The PBGC attributed the continued improvement in the single-employer program to premium and investment income, and increases in the rates used to measure future plan liabilities.
The rising deficit in the multiemployer program was primarily attributed to the 19 additional multiemployer plans that were terminated in fiscal year 2017 or are projected to run out of money within the next 10 years.
In fiscal year 2017, the agency provided $141 million in assistance to 72 insolvent multiemployer plans, up from the $113 million that was provided to 65 plans in fiscal year 2016.
Absent any changes in law, the multiemployer program is still expected to run out of money by the end of 2025, with the possibility that it could run out sooner.
"We are pleased that the financial condition of the single-employer program is improving, consistent with our projections," said PBGC Director W. Thomas Reeder Jr. in a news release accompanying the report. "Our attention is focused on the dire financial condition of the multiemployer program. We are engaged with trustees of troubled plans to help them protect benefits and extend plan solvency. We will continue to work with the administration, Congress and the multiemployer plan community to create solutions so that PBGC's guarantee is one that workers and retirees can count on in the future. The longer the delay in making the changes needed to improve the solvency of the multiemployer program, the more disruptive and costly they will be for participants, plans and employers."