The Pension Benefit Guaranty Corporation (PBGC) recently released its annual report for fiscal year (FY) 2015. The report shows the agency paid $5.7 billion to more than 800,000 people in failed pension plans, which is comparable to the payments PBGC made in FY 2014.
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PBGC's multiemployer insurance program reported a negative net position or "deficit" of $52.3 billion, compared with $42.4 billion last fiscal year-end. The larger deficit is due to changes in interest factors that increased multiemployer program liabilities. PBGC's interest factors are used to measure the value of future benefit payments. The deficit increase was also driven by the identification of 17 additional multiemployer plans that are newly terminated or are projected to run out of money within the next 10 years.
The multiemployer program insures the benefits of more than 10 million workers and retirees in about 1,400 plans. When multiemployer plans fail, PBGC provides financial assistance so the plans can pay benefits at no more than the statutory benefit guarantee level. In FY 2015, the agency paid $103 million in financial assistance to 57 multiemployer pension plans covering the benefits of 54,000 retirees, compared to $97 million in FY 2014.
When Congress passed the Multiemployer Pension Reform Act of 2014 (MPRA), the law increased multiemployer plan premiums and provided new options for troubled multiemployer plans to avoid insolvency.