2019 NCCMP Annual Conference Gordon Hartogensis, PBGC Director - - PowerPoint PPT Presentation

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 2019 maximum annual guaranteed benefit $67,295 for age 65 retiree, regardless of service $12,870** for retiree with 30 years of service, regardless of age

2 * 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.

FY 2000-2018 Net Financial Position

• $70
• $60
• $50
• $40
• $30
• $20
• $10

$0 $10 $20

in billions Single-employer Multiemployer

3

1.3 Million Participants are in Critical and Declining Zone Status Plans

1 2 3 4 5 6 7 8 9 10

4

Critical and Declining Zone Status

Source: 2015 Form 5500 and zone status certifications

Not in Distress Endangered/Seriously Endangered Critical # of participants – in millions

Multiemployer Fund Insolvent by End of FY 2025

$0 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0

2019 2021 2023 2025 2027 2029 2031 2033 2035 2037

In Billions

PBGC Assets, Average Assistance Payments and Premiums by Fiscal Year (Projected in Nominal $ Amounts)

Assets at Start of Year Financial Assistance Partition Assistance Premiums 5 Source: PBGC FY 2018 Projections Report, Figure 4

2025

Multiemployer Program Net Position Projects Continued Decline

• $130
• $120
• $110
• $100
• $90
• $80
• $70
• $60
• $50
• $40
• $30
• $20
• $10

$0

2009 2012 2015 2018 2021 2024 2027

In Billions

Historical Experience 2009-2018 and Nominal 2019-2028 Projections

Actual (historic dollars) Projected "High/Low" Range Projected Mean 6 Source: PBGC FY 2018 Projections Report, Figure 6

Most Participants in Critical and Declining Plans Are in Plans with More Than 5 Inactive Participants for Every Active Participant

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Neither Endangered nor Critical Endangered or Seriously Endangered Critical Critical & Declining

% of Plans based on concentration of Inactives Zone Status

Ratio of Inactive to Active Participants

More than 25 10 to 25 5 to 10 2 to 5 1 to 2 Less than 1

7 Source: PBGC FY 2018 Projections Report, Figure 2

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?

9

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