ERISA organization asks Congress to address 'overfunded' PBGC program

The ERISA Industry Committee (ERIC), a national non-profit organization that represents the largest employers in the U.S., is calling on Congress to re-examine the premiums paid by companies that sponsor defined benefits (DB) plans. The news comes as the Pension Benefit Guaranty Corporation (PBGC) releases its Fiscal Year 2022 Annual Projections Report, which states that the PBGC’s Multiemployer Program is likely to remain solvent for 40 years in 60% of projected scenarios.

The “Annual Projections Report” provides ranges and estimates for the financial health of PBGC’s insurance programs 10 years into the future. This year, PBGC projects a surplus of $63.6 billion by FY 2032 – an increase of more than $10 billion in the last year (in FY 2021, PBGC reported an average $53.3 billion surplus for FY 2031).

“PBGC’s single-employer insurance program has been overfunded for years, yet the law provides for automatic annual premium increases, which impose expenses on retirement plan sponsors that are completely unnecessary,” said Andy Banducci, Senior Vice President for Retirement and Compensation Policy at ERIC. “Current premium levels are clearly inflated and altogether unnecessary for PBGC’s insurance program to be sustainable. Any additional increases are unwarranted and will not provide additional benefits or protections for employees.”