PBGC Multiemployer Program Deficit Nearly $60 Billion

However, according to the agency’s Fiscal Year 2016 Annual Report, the single-employer program deficit improved.

The Pension Benefit Guaranty Corporation (PBGC) released its Fiscal Year 2016 Annual Report showing the deficit in its multiemployer insurance program rose to $58.8 billion.

The increase was driven by additional multiemployer plans that are expected to run out of money within the next 10 years, and by decreases in interest factors used to value PBGC’s liabilities.

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PBGC’s single-employer insurance program showed improvement; its deficit narrowed from $24.1 billion, at the end of FY 2015, to $20.6 billion at the end of FY 2016. This was primarily due to investment and premium income and a low level of plan terminations during the year.

As of September 30, 2016, PBGC’s single-employer program had liabilities of $117.9 billion and assets of $97.3 billion, resulting in a negative net position or “deficit” of $20.6 billion. In FY 2016, the agency paid $5.7 billion in benefits to nearly 840,000 retirees from more than 4,700 failed single-employer plans. The figures are up slightly from $5.6 billion paid to about 826,000 retirees during the previous year.

During FY 2016, PBGC assumed responsibility for more than 46,000 additional people in 76 trusteed single-employer plans. As in recent years, however, PBGC did not incur any large losses from completed or probable plan terminations.

“The improvement in the financial condition of the single-employer program is a welcome result. However, it is clear that more reform is needed to stabilize multiemployer pension plans and to extend the solvency of PBGC’s multiemployer program,” says PBGC Director Tom Reeder. “First and foremost, we need to protect the promises that have already been made to workers and retirees. We are committed to working with Congress on long-term solutions that include increasing multiemployer premium revenues and reforming the premium structure.”

NEXT: Insolvency threatens multiemployer program

As of September 30, 2016, PBGC’s multiemployer program had liabilities of $61 billion and assets of only $2.2 billion, resulting in a negative net position or “deficit” of $58.8 billion, up from $52.3 billion a year earlier. During FY 2016, PBGC provided $113 million in financial assistance to 65 insolvent multiemployer plans, an increase from the previous year of $103 million paid to 57 plans. PBGC’s obligations to provide financial assistance will increase dramatically in the coming years, when more and larger multiemployer plans run out of money and require PBGC assistance to provide benefits at the guarantee level set by law.

PBGC’s multiemployer program income is very small relative to its deficit, and to the increase in its liabilities during FY 2016. Income for the multiemployer program totaled $425 million, comprised of $282 million in premium revenue and $143 million in investment income. In contrast, multiemployer program liabilities increased by $6.8 billion. This was primarily due to a drop in interest factors used to measure the value of PBGC’s future financial assistance payments, and the identification of 11 additional multiemployer plans that terminated or are projected to run out of money within the next 10 years.

In the most recent Projections Report, PBGC estimated that its multiemployer program is likely to run out of money by the end of 2025, and that there is considerable risk that it could run out before then. If the multiemployer insurance program becomes insolvent, PBGC will only be able to provide enough financial assistance to pay a small fraction of guaranteed benefits in insolvent plans.

PBGC's financial statements are prepared in accordance with generally accepted accounting principles in the U.S. For FY 2016, PBGC received an unmodified audit opinion on its financial statements as well as an unqualified audit opinion on internal control over financial reporting. CliftonLarsonAllen LLP performed the audit under contract with PBGC’s Office of Inspector General, which oversaw the audit.

Some Views of the Boss Differ by Generation

Many employees like their bosses, but managers still have much work to do, according to new research from staffing firm Accountemps.

Nearly two in three workers (64%) said they are happy with their supervisors, and another 29% are somewhat happy with their bosses. Only 8% of workers give their manager a thumbs down.

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Yet, despite generally positive attitudes about the higher-ups, there were some areas where respondents felt their managers could improve. Topping the list were communication, cited by 37% of those polled, and recognition named by 31% of respondents.

The survey also found most professionals (67%) don’t aspire their boss’s job. Among those who want to bypass that rung of the career ladder, the primary reasons included not wanting the added stress and responsibility (45%) and a lack of desire to manage others (27%).

Thirty-four percent have left a job because of a strained relationship with a supervisor, and 17% would feel happy if their boss left the company. More than one in 10 (12%) professionals between the ages of 35 and 54 are unhappy with their boss, the largest of any age group. This group also was the most likely to have quit a job over a strained or dysfunctional relationship with a manager.

Half of workers surveyed said their boss understands the demands of their job, but 16% noted their supervisor has little understanding of their day-to-day reality. Twenty-three percent of workers consider their boss a friend, but the majority (61%) cited their relationship as strictly professional.

Workers ages 18 to 34 are most eager to move up to their manager’s position, with 56% saying they want their boss’s job compared to 34% of respondents ages 34 to 55 and 13% of those age 55 and older. Forty-nine percent of Millennials feel their boss recognizes their potential, compared to 67% of workers 55 and older.

The youngest group of workers had the most extensive wish lists. Most notably, compared to the other age groups, these professionals were more likely to want their managers to provide better communication and listening, support for career progression, recognition for accomplishments and help promoting work-life balance.

More results may be viewed here.

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