PBGC Single-Employer Program Shows Improvement; Multi-Employer Program Faces Insolvency

Career Strategy

Career / Career Strategy 12 Views 0

The balance sheet for the Pension Benefit Guaranty Corporation’s (PBGC) single-employer plan moved into the black in the latest fiscal year (FY) to continue a trend of better results, but the multiemployer plan remains in deficit and at risk of insolvency in as few as 7 years, according to the agency’s FY 2018 Annual Report.

Source: sapfirr / iStock / Getty

In the report, released November 16, the single-employer program recorded an improvement of $13.4 billion during FY 2018, showing a positive net position of $2.4 billion as of September 30, swinging from a deficit of $10.9 billion at the end of FY 2017.

However, the multiemployer program continued to post a deficit, of $53.9 billion in the latest fiscal year, although it narrowed from $65 billion at the end of FY 2017. Despite this improvement, the multiemployer program “continues on the path toward insolvency, likely by the end of FY 2025,” the PBGC said in a press release.

“As more time passes, the changes required to prevent insolvency become more disruptive and painful for participants, plans, and employers,” PBGC Director Tom Reeder said in the annual report.

Higher interest rates drove the financial improvement in both programs, as they reduced the value of PBGC’s

Read from Benefits – HR Daily Advisor