PBGC Strategic Plan

The Government Performance and Results Act Modernization Act of 2010 requires federal agencies to develop a new strategic plan every four years. The Pension Benefit Guaranty Corporation (PBGC) just released its Plan for 2018-2022. Some excerpts:

Today, the Corporation guarantees payment of basic pension benefits earned by approximately 40 million American workers and retirees in nearly 24,000 plans. While PBGC encourages companies to maintain their plans, the Corporation will pay benefits when companies cannot. Since 1974, PBGC has become responsible for payment of guarantee amounts that currently cover more than 1.5 million people in over 4,900 failed single-employer and multiemployer plans, making payments of $5.8 billion annually as of FY 2017. PBGC operations are financed by insurance premiums paid by companies that sponsor defined benefit pension plans, investment income, assets from plans trusteed by PBGC and recoveries from companies formerly responsible for the plans. Congress sets PBGC premium rates. PBGC receives no funds from general tax revenues. (page 1)

As noted in PBGC’s Pension Insurance Data Tables, the total number of PBGC insured single-employer pension plans was 112,208 in 1985. As noted in the Corporation’s 2017 Annual Report, that number has declined to about 22,500 plans in 2017…..Since 2010, the number of plans filing a standard termination has been relatively consistent, ranging from 1,340 to 1,480 plans per year. However, starting in 2014, PBGC noticed an increase in the number of large plans filing standard terminations. (page 4)

In FY 2017, the average number of years between plan trusteeship and benefit determination letter issuance reached 6.2 years, up from 3.5 years in FY 2012. Although the processing time increased, the inventory of unissued benefit determination letters decreased. The number of unissued benefit determination letters was nearly 311,000 at the end of FY 2012. By the end of FY 2017, the number of unissued letters decreased to almost 218,000, thus achieving a reduction of 30 percent…..The timing of insolvency differs for each plan, but in total over 1.2 million participants are in plans that expect to run out of money within the next 20 years. When plans become insolvent, PBGC provides financial assistance…..The Multiemployer Insurance Program is likely to run out of money by the end of 2025. (page 5)

In FY 2017, 36 percent of PBGC’s workforce was eligible to retire within the next five years. (page 6)

In FY 2017, PBGC paid $5.7 billion in benefits to almost 840,000 retirees in more than 4,845 failed single-employer plans. An additional 552,000 participants are scheduled to receive benefits in the future. (page 11)

PBGC is responsible for insuring the pensions of tens of millions of people, whose benefits are valued at hundreds of billions of dollars, while collecting over $6 billion in premiums per year….PBGC maintains a core multidisciplinary workforce of just under 1,000 federal employees and a comparable number of contractors to respond to the anticipated base level of long-term operations. (page 13)

Goal 1: Preserve Plans and Protect Pensioners

Goal 2: Pay Pension Benefits on Time and Accurately

Goal 3: Maintain High Standards of Stewardship and Accountability

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