PBGC Releases Latest Projections

Vectra DigitalBlog, Retirement

The Pension Benefit Guaranty Corporation (PBGC) released its fiscal 2018 projections report in August 2019. The PBGC operates insurance programs for Single-Employer and Multiemployer pension plans and this annual report provides projections of the financial status of each program.

The Single-Employer program is the healthier of the two programs. In 10-year projections with 5,000 alternative economic paths, the program was never shown to become insolvent. The Single-Employer program continues to show improvement over time, driven by increasing plan solvency and premiums exceeding claims.

The Multiemployer program is in dire shape. The projections show that the program is certain to be insolvent by 2026, with a 99% chance of insolvency in 2025 and a 4% chance in 2024. The biggest risks for this program are the large group of Critical and Declining Status plans that could revert to the PBGC and the ability of plan sponsors to develop approved plans to suspend or partition benefits.

The projections report can be found here.

Feel free to reach out to your Foster & Foster consultant with any questions you may have.