Can PBGC Save Multiemployer Plans?
The brief’s key findings are:
- Participants in multiemployer pension plans have their benefits insured by the Pension Benefit Guaranty Corporation (PBGC).
- However, the PBGC’s guaranteed benefit levels are very low compared to single employer plans.
- Of greater concern, the PBGC’s insurance fund for multiemployer plans is projected to be exhausted within the next 10 years.
- One idea is to head off plan insolvencies through “partitions” that transfer some costs to the PBGC, but little support exists for hiking premiums to cover the costs.
- The bottom line is that the PBGC, as currently structured, will not be able to stave off plan insolvencies or fully protect workers in plans that become insolvent.