January 30, 2013 (PLANSPONSOR.com) – The Pension Benefit Guaranty Corporation (PBGC) has submitted several reports to Congress about its multiemployer pension plan program.
In “PBGC Insurance of Multiemployer Pension Plans,” the agency says although the timing is uncertain, currently it is at risk of not having the tools to help sustain multiemployer plans or the funds to continue to pay benefits beyond the next decade under the multiemployer insurance program. The multiemployer program has a deficit of $5.2 billion as of Fiscal Year 2012, the result of liabilities of $7.0 billion and assets of $1.8 billion. Because the multiemployer program has only a small base of assets, the program’s large negative net position carries a substantial risk of exhaustion of multiemployer fund assets in the foreseeable future.
Based on the agency’s projections, and assuming no changes either in multiemployer plans or in PBGC’s multiemployer program, there is about a 35% probability that the assets of PBGC’s multiemployer insurance program will be exhausted by 2022 and about a 90% probability of exhaustion by 2032.
"These high probabilities of insolvency and the current program net deficit suggest that current premium levels will not support an increase in the multiemployer guarantee level,” the report says.