2019 NCCMP Annual Conference Gordon Hartogensis, PBGC Director September 23, 2019
Agenda • Introduction • PBGC Financial Condition • Projections Report Overview and Key Results • Multiemployer Activity In Congress • Regulatory Update 1
FY 2018 Recap Single-Employer Multiemployer FY 2018 PBGC financial position • Liabilities (includes “probable” losses) $108 billion $56 billion* • Assets $110 billion $2 billion • Net position $2 billion ($54 billion) Insurable event Plan Termination Plan Insolvency FY 2018 premium income $5.5 billion $292 million FY 2018 payouts to/for retirees $5.8 billion $153 million Number of covered plans 23,400 1,400 Number of participants in plans 26.2 million 10.6 million $67,295 $12,870** for age 65 retiree, for retiree with 30 years of 2019 maximum annual guaranteed benefit regardless of service service, regardless of age * All but $2 billion is for “probable” insolvent plans. **Two-tier guarantee: 100% of the first $3,960, 75% of the next $11,880. Not indexed. 2
FY 2000-2018 Net Financial Position $20 $10 $0 -$10 in billions -$20 -$30 -$40 -$50 -$60 -$70 Single-employer Multiemployer 3
1.3 Million Participants are in Critical and Declining Zone Status Plans Critical and Declining Zone Status 0 1 2 3 4 5 6 7 8 9 10 # of participants – in millions Not in Distress Endangered/Seriously Endangered Critica l 4 Source: 2015 Form 5500 and zone status certifications
Multiemployer Fund Insolvent by End of FY 2025 PBGC Assets, Average Assistance Payments and Premiums by Fiscal Year (Projected in Nominal $ Amounts) $5.0 $4.5 $4.0 $3.5 In Billions $3.0 $2.5 $0 $2.0 $1.5 $1.0 $0.5 $0.0 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2025 Assets at Start of Year Financial Assistance Partition Assistance Premiums Source: PBGC FY 2018 Projections Report, Figure 4 5
Multiemployer Program Net Position Projects Continued Decline Historical Experience 2009-2018 and Nominal 2019-2028 Projections $0 -$10 -$20 -$30 -$40 -$50 In Billions -$60 -$70 -$80 -$90 -$100 -$110 -$120 -$130 2009 2012 2015 2018 2021 2024 2027 Actual Projected "High/Low" Range Projected Mean (historic dollars) Source: PBGC FY 2018 Projections Report, Figure 6 6
Most Participants in Critical and Declining Plans Are in Plans with More Than 5 Inactive Participants for Every Active Participant 100% Ratio of Inactive to Active Participants 90% More than 25 % of Plans based on concentration of Inactives 80% 10 to 25 5 to 10 70% 2 to 5 60% 1 to 2 50% Less than 1 40% 30% 20% 10% 0% Neither Endangered nor Critical Endangered or Seriously Critical Critical & Declining Endangered Zone Status Source: PBGC FY 2018 Projections Report, Figure 2 7
Conclusion • Multiemployer Activity in Congress • Statement on Proposed Solutions “Multiemployer pension plans are in crisis, posing a threat to the promised retirement income of millions of American workers and retirees and their families. Congress should enact a long-term, sustainable solution taking into account fairness to retirees, workers, taxpayers, and employers, to improve retirement security for hard-working Americans and their families. Only bipartisan compromises have a chance of succeeding and it is time to renew such bipartisan efforts to find serious solutions. I look forward to working with all stakeholders – the White House, the Senate, the House, the Departments of Labor, Treasury, and Commerce, the multiemployer plan community, workers, employers, and retirees to find a long-term, sustainable legislative solution for hard-working Americans.” • PBGC Regulatory Update 8
Questions? @uspbgc facebook.com/uspbgc 9
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