Under current law, PBGC backs a modest portion of multiemployer plan benefits. For instance, a union employee in the Central States Plan with 20 years of service is only guaranteed $8,580 from the PBGC. (Photo: Shutterstock)
The massive deficit in the Pension Benefit Guaranty Corp.'s multiemployer insurance program exploded by $11.3 billion in fiscal year 2019, reaching a record deficit of $65.2 billion.
The moribund program that insures the pensions of 1,400 collectively bargained defined benefit pensions plans covering 10.8 million workers and retirees is projected to be insolvent by 2025.
The more than 20 percent increase in the deficit is owed to decreases in the interest rate used to assess future liabilities of individual plans headed to insolvency. Eleven new plans were added to PBGC's list of probable insolvencies in 2019; four multiemployer plans became insolvent in 2019.
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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.
