The deficit in the Pension Benefit Guaranty Corporation’smultiemployer insurance program rose to $58.8 billion in fiscalyear 2016, a record high, according to the agency’s newly releasedannual report.

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Last year’s deficit was $52.3 billion. The $6.5 billion increasewas the result of 11 additional multiemployer plans that were either terminatedin 2016 or projected to be insolvent within the next 10 years, aswell as a drop in the interest rate the agency uses to measure thecost of future liabilities.

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Related: What would a government bailout of PBGClook like?

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In 2016, PBGC provided $113 million in financial assistance to65 insolvent multiemployer plans, which was an increase from the$103 million paid out to 57 plans in 2015.

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The most recent projections report, issued by the agency in Juneof 2016, said the multiemployer insurance program is likely to runout of funds by the end of 2025, and estimated a “considerablerisk” that the program could become insolvent before then.

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In a press call, PBGC Director Thomas Reeder said between 10 and15 percent of the more than 10 million workers with pensionsinsured by the multiemployer program are enrolled in plans expectedto run out of money in the next 20 years or less. The multiemployerprogram covers about 1,400 collectively bargained multiemployerplans.

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By law, Congress sets premium levels PBGC assesses in both itsmultiemployer and single employer programs. The Obamaadministration has proposed premium increases to the multiemployerprogram, but not the single employer plan.

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Congress has yet to act on the Obama administration’s proposedpremium increases, which analysis from the administration andindependent actuaries say are necessary to assure the long-termsolvency of the program.

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Reform needed

“Reform is urgently needed to extend the solvency of themultiemployer program,” said Reeder in the call. The agency iscommitted to working with Congress to implement the necessarypremium increases and funding structure to assure its commitmentscan be met in the long-term, he added.

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Time is of the essence, underscored Reeder. The longer Congresswaits to implement premium reform, the higher and more immediatethe increases will have to be if the program is to survive beyond2025, he said.

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Under the Employee Retirement Income Security Act, the PBGCdirector severs a five-year term. Reeder was appointed by PresidentObama and began his term in October of 2015.

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He expressed hope that the prospect of new premium structure forthe multiemployer plan is gaining traction in Congress.

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“Retirement security has traditionally been a nonpartisan issueand people on both sides of the aisle agree PBGC is a highpriority,” he said.

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The multiemployer program collected $282 million in premiumrevenue in 2016, the most over the past 10 years. In 2015 itcollected $212 million. As recently as 2012, premium revenue was aslow as $92 million.

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The program earned another $143 million in investmentincome.

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New liabilities

But the $425 million in total revenue to the program paled incomparison to new liabilities, which were $6.8 billion.

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Of the assistance paid to 65 multiemployer plans in 2016, 10were newly insolvent and cover the pensions of about 10,000participants.

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The multiemployer program protects a substantially lower portionof pension benefits relative to the single-employer program.

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For the multiemployer program, the agency determines insuredbenefits by factoring an individual participant’s years of serviceto the employer and the generosity of promised benefits in theplan.

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The maximum guarantee for a participant with 30 years of servicein a plan with moderately high benefits is $12,870 a year.

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For a worker with 20 years of service, PBGC’s maximum guaranteeis $8,580 in annual benefits; for a worker with 10 years of servicethe maximum is $4,290.

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PBGC’s multiemployer program has total assets of $2.2 billion,against $61 billion in liabilities.

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Of the $61 billion in liabilities, 65 insolvent plans accountfor $2.1 billion in liabilities, and 63 plans that are terminatedand expected to be insolvent account for almost $2 billion.

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But the brunt of the program’s liabilities is with the 40ongoing plans that are projected to be insolvent in the next 10years—those plans account for nearly $57 billion of the program’srecord liabilities.

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The $113 million in paid guarantees to participants was thesecond highest over the past decade. In 2011, $115 million inbenefits were paid out.

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The 65 plans that received assistance in 2016 were the most overthe past decade.

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Single-employer plan continues improvement

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PBGC’s single-employer insurance program has continued toimprove, thanks in part to consistent and substantial increases inemployer premiums over the past five years.

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In 2016 the single-employer plan had a deficit of $20.6billion—assets were $97.3 billion against liabilities of $117.9billion. The deficit decreased nearly $3.5 billion from theprevious year.

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More than $6.4 billion in premiums were paid to thesingle-employer program, by far the most over the past 10years.

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In 2015, the single-employer program collected $4.1 billion inpremiums. Premium revenue has tripled since 2011, when the programcollected less than $2.1 billion

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The single-employer program realized more than $8.6 billion ininvestment income.

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PBGC paid $5.7 billion in benefits to participants in failedsingle-employer plans in 2016, accounting for almost 840,000retirees in more than 4,700 failed pension plans.

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Three single-employer plans underfunded by a total of $249million were newly classified as probable terminations.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.