Key Issues > Pension Benefit Guaranty Corporation Insurance Programs - High Risk Issue
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Pension Benefit Guaranty Corporation Insurance Programs - High Risk Issue

The Pension Benefit Guaranty Corporation (PBGC)—which insures the pension benefits of nearly 40 million American workers and retirees—has an uncertain financial future, due in part to a long-term decline in the number of traditional pension plans.

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PBGC's financial portfolio is one of the largest of any federal government corporation and, according to PBGC’s 2018 annual report, has almost $112 billion in assets. PBGC is considered High Risk because its financial future is uncertain, due in part to a long-term decline in the number of traditional defined benefit (pension) plans. Through its single-employer and multiemployer insurance programs, PBGC insures the pension benefits of American workers and retirees who participate in nearly 24,800 private sector defined benefit plans.

Since fiscal year 2013, PBGC's financial deficits have grown dramatically. At the end of fiscal year 2018, PBGC's net accumulated financial deficit was over $51 billion—an increase of about $16 billion from the end of fiscal year 2013—and PBGC estimated that its exposure to future losses for underfunded plans was nearly $185 billion. The dramatic increase in PBGC's deficit since 2013 was attributable to a crisis in the multiemployer program, the smaller of its two programs. Since 2013, the deficit in the multiemployer program, composed of about 1,400 plans, had increased by about $16 billion. Meanwhile, the financial position of the larger single-employer program—composed of about 23,400 plans—had improved in recent years, accounting for a surplus of about $2.4 billion (see figure).

Pension Benefit Guaranty Corporation’s (PBGC) Net Financial Position of the Single-Employer and Multiemployer Programs Combined, Fiscal Years 1990 through 2018

Pension Benefit Guaranty Corporation’s (PBGC) Net Financial Position of the Single-Employer and Multiemployer Programs Combined, Fiscal Years 1990 through 2018

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Podcasts

2015 Update to GAO's High Risk ListWednesday, February 11, 2015
  • portrait of Charles A. Jeszeck
    • Charles A. Jeszeck
    • Director, Education, Workforce, and Income Security
    • jeszeckc@gao.gov
    • (202) 512-7215