PBGC Safety Net Covered More in FY ’17
The safety net the Pension Benefit Guaranty Corporation (PBGC) provides through its pension plan insurance programs covered more plans and participants in federal fiscal year (FY) 2017, the agency reports
The PBGC reports that in FY 2017 it:
- paid $5.7 billion in benefits to nearly 840,000 single-employer pension plan retirees, the same as last year;
- became responsible for 82 single-employer plans that cover 23,000 current and future retirees and that terminated with insufficient funds to provide all promised benefits;
- helped to protect more than 26,700 people by taking action in Chapter 11 cases to encourage companies to keep their plans ongoing upon emerging from bankruptcy; and
- negotiated two agreements under its Early Warning Program that provided nearly $600 million in financial protection for more than 240,000 people in single-employer pension plans that corporate transactions put at greater risk.
Gazing into its crystal ball, the PBGC says that the demand for its financial assistance will increase as more and larger multiemployer plans run out of money and need help to provide benefits at the guarantee level set by law. Not only that, says the PBGC, that is “only a small fraction of the amounts” it will need in order to support the guaranteed benefits of participants in plans expected to become insolvent in the next 10 years.