Congress Needs to Address the PBGC’s Multiemployer Program Deficit Now
The Pension Benefit Guaranty Corporation (PBGC) is a government entity that provides mandatory insurance to private pension plans. If a private pension plan fails, the PBGC pays out insured benefits so that pensioners are not left penniless. The problem is, however, that the PBGC’s multiemployer program is itself insolvent and will likely run out of money to pay insured benefits beginning in 2025. That date could be much sooner, and the total size of the PBGC’s multiemployer deficit could be much larger, however, if investment returns are lower than projected or if more pension plans fail, or fail sooner, than anticipated.
Congress should not wait until it is too late to enact meaningful reforms. The PBGC’s multiemployer program deficit has already increased more than 150-fold over just the past 10 years. Congress can protect beneficiaries of the PBGC’s multiemployer program and private union pensioners through a combination of premium increases, limited benefit reductions, stricter funding rules, and restructuring of the PBGC’s multiemployer program to more closely resemble its single-employer program and private insurance companies.