A new Congressional Budget Office report projects the Pension Benefit Guaranty Corporation’s multiemployer program to become bankrupt by 2025 under current law.
CBO said Tuesday PBGC would be unable to pay $3 billion of the total $9 billion worth of projected claims for financial aid filed with the multiemployer program from 2017 through 2026.
PBGC’s multiemployer program insures the benefits of approximately 10 million people that are covered by pension plans provided by groups of employers.
CBO projects PBGC to face a cash shortfall of $34 billion from 2017 through 2036 between the claims filed with the program and available resources to meet such insurance obligations.
According to the report, the multiemployer program’s total financial assistance claims would reach $101 billion on a fair-value basis over the next 20 years.
CBO suggested several policy changes that aim to help PGBC build up its capacity to pay for projected claims under the multiemployer program.
These measures include the introduction of changes to insurance terms and pension plans’ funding rules, provide $10 billion in federal funds to PBGC to help the government-owned corporation create partitions for troubled pension plans and assist PBGC to pay financial assistance claims through recapitalization, according to the report.