The Pension Benefit Guaranty Corp.'s multiemployer program outlook has substantially improved following passage of the American Rescue Plan Act, according to the agency's fiscal year 2020 annual report.
Last year's report projected a very high likelihood of the program's insolvency by September 2025 and near certainty by September 2026. In the latest report, released Monday, the most pessimistic scenario projects the fund to go insolvent in fiscal year 2036, while optimistic scenarios project the fund to remain solvent indefinitely. The median projected insolvency year is now fiscal year 2055, according to the report.
"While future reforms would help improve the long-term health and resilience of the multiemployer system overall, ARP has provided a financial lifeline, and the effects of that are clear," PBGC Director Gordon Hartogensis said in a news release. "The difference between these projection reports and reports from recent years is night and day; and that is great news for the millions of workers, retirees, and their families who rely on the agency."
The American Rescue Plan Act, which was signed into law by President Joe Biden in March, in part created a federal assistance program for struggling multiemployer funds.