The Pension Benefit Guaranty Corp.'s single-employer and multiemployer pension programs remain in solid shape as both posted net positive positions in the last fiscal year, according to the PBGC's annual financial report released Nov. 16.
The multiemployer program, which for years was facing looming insolvency, had a net positive position of $1.5 billion as of Sept. 30, the end of fiscal year 2023, compared with $1.1 billion in the previous fiscal year. The positive change is due to the American Rescue Plan Act, which Democrats passed in March 2021 and in part created a federal assistance program for struggling multiemployer funds that has pumped billions of dollars into the multiemployer ecosystem.
As of the end of fiscal year 2023, PBGC had received 135 special financial assistance applications from struggling multiemployer plans requesting $71 billion in aid. The agency had approved 100 applications totaling $53.5 billion in SFA, as of Sept. 30, according to the report.
Prior to the American Rescue Plan's passage, the multiemployer program was projected to become insolvent in 2026. Now its median projected insolvency is after 2062, the end of PBGC's projection period, according to a PBGC report released in August.
Separately, the single-employer program posted a net positive position of $44.6 billion at the end of fiscal year 2023, compared with $36.6 billion the previous year.
The program's projected mean position at the end of fiscal year 2032 is a surplus of $63.6 billion, according to the August report.
The single-employer program is financed by insurance premiums paid by companies that sponsor defined benefit plans, investment income from plan assets trusteed by PBGC and recoveries from companies formerly responsible for the plans. The program's health has led many stakeholders to call for Congress to reduce PBGC premiums, which have soared in recent years.
“PBGC does not need current premium levels to sustain its insurance program, and continuing to dramatically overfund the program will not provide additional benefits or protections for employees,” said Andy Banducci, senior vice president for retirement and compensation policy at the ERISA Industry Committee, in a statement.
