PBGC FY16 Annual Report

As hundreds of thousands of participants in the Central States Pension Fund brace for major pension cuts and millions of participants in other multiemployer plans don’t brace since they don’t grasp the depth of the funding problems facing union plans, the Pension Benefit Guaranty Corporation (PBGC) released their 2016 annual report which they ironically chose to subtitle “Keeping Our Commitment to America’s Workers”.

Notable excerpts from the report:

While I am pleased that given the recent trends in claims and premiums, the single-employer program is likely to continue to improve over the next decade, I remain concerned that the multiemployer plan program faces a growing deficit. The FY 2016 Annual Report shows that the multiemployer plan program deficit is at an all-time high and needs significant reform in order to remain viable.
….
Multiemployer defined benefit plans provide retirement security to more than 10 million participants and their beneficiaries. But PBGC estimates that plans covering about 10% to 15% of the 10 million multiemployer participants are at risk of running out of money over the next 20 years and that PBGC’s multiemployer insurance program is likely to run out of money by the end of 2025.
….
Currently, we pay nearly 840,000 retirees and beneficiaries, and almost 560,000 workers are scheduled to receive benefits from PBGC when they retire.
….
We are proud that the retirees we serve have given us a score of 90 on the American Customer Satisfaction Index.
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The corporation guarantees payment of the defined benefit pension benefits, up to the legal limits, earned by nearly 40 million American workers and retirees in nearly 24,000 plans. Since 1974, PBGC has become responsible for more than 1.5 million people in over 4,800 failed single-employer and multiemployer plans. PBGC made benefit payments of $5.8 billion in FY 2016.

….

[PBGC] paid $113 million in financial assistance to 65 insolvent multiemployer plans.
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[PBGC] assumed responsibility for more than 46,000 people in 76 trusteed single-employer plans.
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In FY 2016, almost 1,340 plans, covering approximately 193,000 participants, filed standard terminations.
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PBGC conducted 260 standard termination audits to verify that plan sponsors properly calculated participants’ benefits due to the plan termination. As a result, almost 940 people in these plans received an additional $4.5 million in benefits.
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The five largest plans that PBGC trusteed in FY 2016 were sponsored by the Great Atlantic & Pacific Tea Company Inc. (21,069 participants), Freedom Communications (5,214 participants), Southern Regional Health System Inc. (2,759 participants), Walter Energy Inc. (2,722 participants), and the Estate of Vincent Posner (2,101 participants).
….
The [PBGC] net financial position remains in deficit for both the single-employer and multiemployer programs. The net financial position of the larger single-employer program is likely, but not guaranteed, to improve over the next decade. Current projections of the single-employer program show a surplus in 2025. The multiemployer insurance
program is likely to run out of money by the end of 2025. The single-employer and multiemployer programs are operated and financed separately. Assets from one program cannot be used to support the other program.
….
In FY 2016, combined premium cash receipts collected totaled $5.5 billion. Single-employer program premium cash receipts collected were $5.2 billion. Separately, multiemployer program premium cash receipts were around $300 million.
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Relocation of Service Desk staff to a facility in Colorado to improve service and efficiency.
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PBGC’s combined net position decreased by $3,064 million, increasing the Corporation’s combined deficit to $79,413 million as of September 30, 2016, a record loss, from $76,349 million as of September 30, 2015.
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The multiemployer program’s net position declined by $6,549 million, increasing its deficit to $58,833 million, an all-time high for the multiemployer program.
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The single-employer program’s net position increased by $3,485 million, decreasing the program’s deficit to $20,580 million.
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5 responses to this post.

  1. Posted by skip3house on November 16, 2016 at 2:10 pm

    940, out of 1,500,000, had pension increases from calculated plan terminations.
    ” We are proud that the retirees we serve have given us a score of 90,.”..

    Reply

  2. Posted by Anonymous on November 16, 2016 at 6:39 pm

    I’m confused, I thought that all of these plans received letters stating that they could not reduce pension benefits yet this article states that retirees of Central States are bracing for reductions…..

    Reply

  3. Posted by Anonymous on November 16, 2016 at 7:44 pm

    First they came for the factory jobs while wages were high and I did not speak out—
Because I didn’t have a factory job.
    Then they came for the pensions and I did not speak out— 
Because I did not have a pension
    Then they came for Social Security and I did not speak out— 
Because I was not yet getting Social Security
    Finally they came for me—my 401K, my IRA/SEP, my 529 and there was no one left to speak for me.

    Reply

  4. Posted by Anonymous on November 17, 2016 at 5:09 pm

    Anonymous, maybe you should be speaking out about all of the illegals, refugees, false disabilities, double and triple dippers in the pension fund, corruption……by all means please speak out!! Way too much was promised to way too many people without any way to pay for it all and no reforms were ever made to reflect the current situation as it was unfolding years and years ago.

    Let them try to take our 401ks, etc you will see protesting and revolt like never before. Responsible people who planned and sacrificed to save for retirement thrown under the bus for all of those who did not.

    Reply

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