from Spencer's Benefits Reports: The Pension Benefit Guaranty Corporation (PBGC) has released the Pension Insurance Data Book, 2009, offering information on statistical trends related to defined benefit retirement plans in the private sector. The new edition features a detailed article on the smaller of the agency's two pension insurance programs, which covers multiemployer pension plans.

Of the 1,522 multiemployer plans covered by the PBGC in 2007, 1,405 plans (92.3% of the total) were underfunded by a total of $194,993 million, and only 117 plans (7.7%) were overfunded, with a total of $1,657 million. The underfunded plans cover 97% of the 10,032 participants in the multiemployer plans, while only 3% of the participants were covered by overfunded multiemployer plans.

Since fiscal year 1981, the PBGC has paid just over $503 million in financial assistance to 62 insolvent multiemployer plans covering more than 93,000 participants. The agency estimates its liability for such payments in the future at nearly $2.3 billion, for 104 plans covering about 136,000 participants.

If an insolvent multiemployer pension plan recovers financially, it is required to repay the financial assistance with interest. In the program's nearly 30 years of existence, only one multiemployer plan has repaid PBGC for the financial assistance it received.

Single Employer Determination

Since 1975, there have been 3,993 underfunded single-employer plans terminated resulting in total claims of $42.9 billion. Total annual claims have ranged from a low of $28.6 million in 1984 to a high of more than $11.2 billion in 2005. The firms presenting the ten largest claims have accounted for 63% of all claims against the PBGC from 1975 to 2009.

Single-employer plan claims from the air transportation industry accounted for 32.9% of total claims from 1975 to 2009, with the primary metals industry accounting for 27.2% of total claims. The motor vehicle equipment industry accounted for 15.3% of claims. The remainder of total claims on the single-employer program came from the manufacturing industry (9.6%), the non-manufacturing industry (8.9%), the fabricated metal products industry (3.4%) and the machinery industry (2.7%).

Using PBGC assumptions, 9.5% of the claims from single-employer plans had a funded ratio of less than 25%; 52.3% of the claims had a funded ratio between 25% and 49%; 36.6% of claims had a funded ratio between 50% and 74%; and 1.6% of claims had a funded ratio of 75% or above.

In 2009, the PBGC insured 27,650 single-employer plans, down from an all-time high of 112,000 plans covered in 1985. Plans of small employers represent the largest portion of the decline.

The 2009 Data Book is available at http://www.pbgc.gov/docs/2009databook.pdf. Single copies of the publication may be obtained by writing to: PBGC Data Book, Room 12108, 1200 K Street NW, Washington, DC 20005-4026. Requests also may be submitted by FAX to (202) 326-4344, or email: publications@pbgc.gov.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.