Pension Benefit Guaranty Corporation
(PBGC): A Primer
Updated January 8, 2021
Congressional Research Service
https://crsreports.congress.gov
95-118

Pension Benefit Guaranty Corporation (PBGC): A Primer

Summary
The Pension Benefit Guaranty Corporation (PBGC) is a government corporation established by
the Employee Retirement Income Security Act of 1974 (ERISA; P.L. 93-406). It was created to
protect the pensions of participants and their beneficiaries covered by private sector defined
benefit (DB) plans. These pension plans provide a specified monthly benefit at retirement, usual y
either a percentage of salary or a flat dollar amount multiplied by years of service. Defined
contribution (DC) plans, such as 401(k) plans, are not insured. PBGC is chaired by the Secretary
of Labor, with the Secretaries of the Treasury and Commerce serving as board members.
PBGC runs two distinct insurance programs: one for single-employer pensions and a second for
multiemployer plans. Single-employer pension plans are sponsored by one employer and cover
eligible workers employed by the plan sponsor. Multiemployer plans are collectively bargained
plans to which more than one company makes contributions. PBGC maintains separate reserve
funds for each program.
A firm must be in financial distress to end an underfunded single-employer plan and for PBGC to
become the trustee of the plan. PBGC does not become trustee of multiemployer plans. An
insolvent multiemployer plan does not have sufficient resources from which to pay promised
benefits. PBGC provides financial assistance to insolvent multiemployer plans in the form of
loans, although PBGC does not expect the loans to be repaid.
In FY2020, PBGC insured about 25,000 DB pension plans covering approximately 34 mil ion
people. PBGC became the trustee of 67 newly terminated single-employer pension plans and
began providing financial assistance to an additional 6 multiemployer pension plans. PBGC paid
benefits to 984,474 participants in 5,031 single-employer pension plans and 79,600 participants in
91 multiemployer plans.
There is a statutory maximum benefit that PBGC can pay. Participants receive the lower of their
benefit as calculated under the plan or the statutory maximum benefit. If a participant’s benefit is
higher than the statutory maximum benefit, the participant’s benefit is reduced. Participants in
single-employer plans that terminate in 2021 and are trusteed by PBGC may receive up to
$72,409 per year if they begin taking their pension at the age of 65. The single-employer
maximum benefit is adjusted depending on the age at which the participant begins taking the
benefit and on the form of the benefit (e.g., the maximum benefit is lower for a joint-and-survivor
annuity). The maximum benefit for participants in multiemployer plans that receive financial
assistance depends on the number of years of service in the plan. For example, a participant with
30 years of service may receive up to $12,870 per year. Currently, most workers in single-
employer plans taken over by PBGC and multiemployer plans that receive financial assistance
from PBGC receive the full pension benefit that they earned. However, among participants in
multiemployer plans that were terminated and likely to need financial assistance in the future,
49% have a benefit below the PBGC maximum guarantee and 51% have a benefit larger than the
PBGC maximum guarantee (and therefore, would see a benefit reduction).
At the end of FY2020, PBGC had a total deficit of $48.2 bil ion, which consisted of a $15.5
bil ion surplus from the single-employer program and a $63.7 bil ion deficit from the
multiemployer program. PBGC’s single-employer program has been on the Government
Accountability Office’s (GAO’s) list of high-risk government programs since 2003. PBGC’s
multiemployer program was added in 2009. PBGC projects the financial position of the single-
employer program is likely to continue to improve, but the financial position of the
multiemployer program is expected to worsen considerably over the next 10 years.
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Contacts
Author Information ....................................................................................................... 22

Congressional Research Service

Pension Benefit Guaranty Corporation (PBGC): A Primer

Pension Benefit Guaranty Corporation
The Pension Benefit Guaranty Corporation (PBGC) is a government corporation established by
the Employee Retirement Income Security Act of 1974 (ERISA; P.L. 93-406). It was created to
protect the pensions of participants and beneficiaries covered by private sector defined benefit
(DB) plans. These pension plans provide a specified monthly benefit at retirement, usual y either
a percentage of salary or a flat dollar amount multiplied by years of service. Defined contribution
(DC) plans, such as 401(k) plans, are not insured.1
PBGC runs two distinct insurance programs: one for single-employer pension plans and a second
for multiemployer plans. Single-employer pension plans are sponsored by one employer and
cover eligible workers employed by the plan sponsor. Multiemployer plans are collectively
bargained plans to which more than one company makes contributions. PBGC maintains separate
reserve funds for each program.
In FY2020, PBGC insured about 25,000 DB pension plans covering about 34 mil ion people. It
paid or owed benefits to 1.6 mil ion people.2 PBGC is the trustee of 5,031 single-employer plans.3
PBGC provided financial assistance to 91 multiemployer pensions.4 PBGC benefits to plan
participants are capped by a statutory maximum amount. Most workers in single-employer plans
taken over by PBGC and multiemployer plans that receive financial assistance from PBGC
receive the full pension benefit that they earned.5 However, among participants in multiemployer
plans that were terminated and likely to need financial assistance in the future, 49% have a
benefit below the PBGC maximum guarantee and 51% have a benefit larger than the PBGC
maximum guarantee.6
PBGC Administration
PBGC is a government-owned corporation. A three-member board of directors, chaired by the
Secretary of Labor, administers the corporation. The Secretary of Commerce and the Secretary of
the Treasury are the other members of the board of directors. The director of PBGC is appointed
by the President with the advice and consent of the Senate. ERISA also provides for a seven-
member advisory committee, appointed by the President, for staggered three-year terms. The
advisory committee advises PBGC on issues, such as investment of funds, plan liquidations, and
other matters.
The Moving Ahead for Progress in the 21st Century Act (MAP-21; P.L. 112-141) altered some of
the governance structures of PBGC. Some of these changes include setting the term of the PBGC
director at five years, unless removed by the President or by the board of directors; requiring that
the board of directors meet at least four times each year; and establishing a Participant and Plan

1 T hese plans are authorized in §401(k) of the Internal Revenue Code.
2 See PBGC, PBGC Annual Report 2020, pp. 23-27, at https://www.pbgc.gov/about/annual-reports/pbgc-annual-report-
2020.
3 PBGC, PBGC Annual Report 2020, p. 28.
4 PBGC, PBGC Annual Report 2020, p. 29.
5 See Pension Benefit Guaranty Study, PBGC’s Multiemployer Guarantee, March 2015, https://www.pbgc.gov/
documents/2015-ME-Guarantee-Study-Final.pdf.
6 Pension Benefit Guaranty Study, PBGC’s Multiemployer Guarantee, March 2015.
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Pension Benefit Guaranty Corporation (PBGC): A Primer

Sponsor Advocate within PBGC to act as a liaison between PBGC, participants in plans trusteed
by PBGC, and the sponsors of pension plans insured by PBGC.7
PBGC Financing
PBGC is required by ERISA to be self-supporting and receives no appropriations from general
revenue. ERISA states that the “United States is not liable for any obligation or liability incurred
by the corporation,”8 and some Members of Congress have expressed a reluctance to consider
providing financial assistance to PBGC.9 The most reliable source of PBGC revenue is the
premiums set by Congress and paid by the private-sector employers that sponsor DB pension
plans. Other sources of income are assets from terminated plans taken over by PBGC, investment
income, and recoveries collected from companies when they end underfunded pension plans. The
Multiemployer Pension Plan Amendments Act of 1980 (P.L. 96-364) requires that PBGC’s
receipts and disbursements be included in federal budget totals.10
Premiums
The sponsors of private-sector pension plans pay a variety of premiums to PBGC. The sponsors
of single-employer and multiemployer pension plans pay a flat-rate, per-participant premium. The
sponsors of underfunded single-employer pension plans pay an additional premium that is based
on the amount of plan underfunding. In addition, pension plans that are terminated in certain
situations pay a per-participant premium per year for three years after termination.
The premiums for 2021 are as follows:
 Single-employer flat-rate premium: The sponsors of single-employer DB pension
plans pay an annual premium of $86 for each participant in the plan.11
 Single-employer variable-rate premium: In addition to the flat-rate premium, the
sponsors of underfunded single-employer DB pension plans pay an additional
annual premium of $46 for each $1,000 of unfunded vested benefits.12 There is
an annual per-participant limit of $582 for this premium.

7 T he President or board of directors can remove the PBGC director without cause.
8 See ERISA 4002 §1302(g)(2) and 29 U.S.C. 1302 §(g)(2).
9 For example, Chairman Phil Roe and then-Ranking Member Robert Andrews, of the Subcommittee on Health,
Employment, Labor, and Pensions in the House Education and Workforce Committee, both expressed reservations
about providing government financial assistance for PBGC. See U.S. Congress, House Committee on Education and
the Workforce, Subcommittee on Health, Employment, Labor, and Pensions, Exam ining the Challenges Facing PBGC
and Defined Benefit Pension Plans, 112th Cong., 2nd sess., February 2, 2012, 112-50 (Washington: GPO, 2012) and
U.S. Congress, House Committee on Education and the Workforce, Subcommittee on Health, Employment, Labor, and
Pensions, Strengthening the Multiem ployer Pension System : What Reform s Should Policym akers Consider?, 113th
Cong., 1st sess., June 12, 2013.
10 For an explanation of PBGC financing and the federal budget, see Congressional Budget Office, A Guide to
Understanding the Pension Benefit Guaranty Corporation , September 2005, https://www.cbo.gov/sites/default/files/
109th-congress-2005-2006/reports/09-23-guidetopbgc.pdf.
11 For plan years beginning in 2019, cooperative and small employer charity (CSEC) pension plans—a type of single-
employer plan sponsored by certain rural cooperative and 501(c)(3) charities—pay a $19 flat -rate premium and a $9
per $1,000 unfunded vested benefits variable rate premium. T his premiums for CSEC plans are not adjusted for
inflation. Section 206 of the Setting Every Community Up for Retirement Enhancement Act, enacted as Division O of
P.L. 116-94, modified premiums for CSEC plans.
12 Vested benefits are those benefits that a participant has earned a right to receive from a pension plan. Participants are
entitled to their vested benefits even if they leave the pension plan or if the plan terminates.
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 Single-employer termination premium: The sponsors of single-employer DB
pension plans that end in certain situations13 pay an annual premium of $1,250
per participant per year for three years following plan termination.14
 Multiemployer flat-rate premium: The sponsors of multiemployer DB pension
plans pay an annual premium of $31 for each participant in the plan in 2021.
In the Appendix, Table A-1 and Table A-2 provide a history of PBGC premium rates.
Table 1 details the amounts of premium income in FY2019 and FY2020.
Table 1. Pension Benefit Guaranty Corporation Premium Income
(FY2019 and FY2020 by type of premium in mil ions of dol ars)

FY2019
FY2020
Single-Employer

Flat-Rate Premium
$1,882
$1,874

Variable-Rate Premium
4,488
3,770

Termination Premium
4
12
Multiemployer

Flat-Rate Premium
312
324
Source: PBGC, PBGC Annual Report 2020, Note 11: Premiums, at https://www.pbgc.gov/about/annual-reports/
pbgc-annual-report-2020.
Requirements for PBGC Coverage
PBGC covers only those DB plans that meet the qualification requirements of Section 401 of the
Internal Revenue Code (IRC).15 DC plans (such as 401(k) and 403(b) plans) are not insured by
PBGC. Plans must meet these requirements to receive the tax benefits available to qualified
pension plans. If a plan meets the requirements of IRC Section 401, the employer’s contributions
to the plan are treated as a tax-deductible business expense, and neither the employer’s
contributions to the plan nor the investment earnings of the plan are treated as taxable income to
the participants. When a pension plan participant begins to receive income from the plan, it is
taxed as ordinary income.
In general, to be qualified under the IRC, a pension plan must be established with the intent of
being a permanent and continuing arrangement; must provide definitely determinable benefits;16

13 T he termination premium applies to plans that end in distress terminations in which ERISA §4044(c) applies, unless
certain conditions about the plan’s sponsors apply. For more information, see Termination Premium Payment Package,
including PBGC Form T, available from PBGC at http://www.pbgc.gov/documents/Form-T -package-2014.pdf.
14 T he termination premium was authorized in Deficit Reduction Act of 2005 (P.L. 109-171). T he termination premium
is $2,500 for airlines that chose the funding relief available under §402 of the Pension Protection Act of 2006 (PP A;
P.L. 109-280) if the plan terminated within five years of choosing the funding relief.
15 See 26 U.S.C. §401.
16 See 25 U.S.C. §401(a)(25) and 26 C.F.R. §1.401(a)-1. Definitely determinable benefits are benefits that are based on
actuarial assumptions over which an employer does not have the discretion to make changes, such as those calculated
from a formula specified in the pension plan documents. As a counter example, a benefit that could be changed based
on the employer’s profits would not be definitely determinable.
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may not discriminate in favor of highly compensated employees with respect to coverage,
contributions, or benefits; and must cover a minimum number or percentage of employees.
Pension plans specifical y excluded by law from being insured by PBGC include governmental
plans, church plans, plans of fraternal societies financed entirely by member contributions, plans
maintained by certain professionals (such as physicians, attorneys, and artists) with 25 or fewer
participants, and plans established and maintained exclusively for substantial owners of
businesses.17
Pension Benefit Insurance Programs
PBGC’s single-employer and multiemployer insurance programs operate differently and PBGC
maintains separate reserve funds for each program. Funds from the reserve of one program may
not be used for the other program.
In the single-employer program, PBGC becomes the trustee of terminated, underfunded single-
employer DB pension plans. The assets of the terminated plan are placed in a trust fund operated
by PBGC. The participants in the trusteed plans receive their benefits from PBGC.
In the multiemployer program, PBGC does not become the trustee of plans. PBGC makes loans
to multiemployer DB pension plans when the plans become insolvent. An insolvent
multiemployer plan has insufficient assets available from which to pay participant benefits.
Single-Employer Insurance Program
An employer can voluntarily terminate a single-employer plan in either a standard or distress
termination.18 The participants and PBGC must be notified of the termination. PBGC may
involuntarily terminate an underfunded plan if the sponsor is unable to fund its pension
obligations.
Standard Terminations
A company may voluntarily end its pension plan if the plan’s assets are sufficient to cover benefit
liabilities. In such cases, PBGC does not pay any benefits to plan participants. Its role is to
confirm that the requirements for termination have been met by the plan. General y, benefit
liabilities equal al benefits earned to date by plan participants, including vested and nonvested
benefits (which automatical y become vested at the time of termination), plus certain early
retirement supplements and subsidies. Benefit liabilities also may include certain contingent
benefits.19 If assets are sufficient to cover benefit liabilities (and other termination requirements,
such as notice to employees, have not been violated), the plan distributes benefits to participants.
The plan provides for the benefit payments it owes by purchasing annuity contracts from an
insurance company, or otherwise providing for the payment of benefits, for example, by
providing the benefits in lump-sum distributions.
Assets in excess of the amounts necessary to cover benefit liabilities may be recovered by the
employer in an asset reversion.20 The asset reversion is included in the employer’s gross income

17 See 29 U.S.C. §1321.
18 More information is available in CRS Report RS22624, The Pension Benefit Guaranty Corporation and Single-
Em ployer Plan Term inations.
19 Contingent benefits are benefits that are available when certain specified events occur. For example, a plan might
provide “shutdown benefits,” which are additional benefits should a plant or facility close.
20 An asset reversion is cash and property received by the sponsor of a DB pension plan. See 26 U.S.C. §4980(c)(2).
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and is subject to a nondeductible excise tax. The excise tax is 20% of the amount of the reversion
if the employer establishes a qualified replacement plan or provides certain benefit increases in
connection with the termination. Otherwise, the excise tax is 50% of the reversion amount.
PBGC Trusteeship
When an underfunded plan terminates in a distress or involuntary termination, the plan goes into
PBGC receivership. PBGC becomes the trustee of the plan, takes control of any plan assets, and
assumes responsibility for liabilities under the plan. PBGC makes payments for benefit liabilities
promised under the plan with assets received from two sources: (1) assets in the plan before
termination and (2) assets recovered from employers. The balance, if any, of guaranteed benefits
owed to beneficiaries is paid from PBGC’s revolving funds.
Distress Terminations
If assets in the plan are not sufficient to cover benefit liabilities, the employer may not terminate
the plan unless the employer meets one of four criteria necessary for a “distress” termination:
1. The plan sponsor, and every member of the controlled group (companies with the
same ownership) of which the sponsor is a member, has filed or had filed against
it a petition seeking liquidation in bankruptcy or any similar federal law or other
similar state insolvency proceedings;
2. The plan sponsor, and every member of the sponsor’s controlled group, has filed
or had filed against it a petition to reorganize in bankruptcy or similar state
proceedings. This criterion is also met if the bankruptcy court (or other
appropriate court) determines that, unless the plan is terminated, the employer
wil be unable to continue in business outside the reorganization process and
approves the plan termination;
3. PBGC determines that termination is necessary to al ow the employer to pay its
debts when due; or
4. PBGC determines that termination is necessary to avoid unreasonably
burdensome pension costs caused solely by a decline in the employer’s work
force.
These requirements were added by the Single Employer Pension Plan Amendments Act of 1986
(SEPPAA; P.L. 99-272) and modified by the Omnibus Budget Reconciliation Act of 1987 (P.L.
100-203) and the Retirement Protection Act of 1994 (RPA; P.L. 103-465). They are designed to
ensure that the liabilities of an underfunded plan remain the responsibility of the employer, rather
than PBGC, unless the employer meets strict standards of financial need indicating genuine
inability to continue funding the plan.
Involuntary Terminations
PBGC may terminate a plan involuntarily, either by agreement with the plan sponsor or pursuant
to a federal court order. PBGC may institute such proceedings only if
 the plan in question has not met the minimum funding standards,
 the plan wil be unable to pay benefits when due,
 the plan has a substantial owner who has received a distribution greater than
$10,000 (other than by reason of death) and the plan has unfunded vested
benefits, or
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 the long-run loss to PBGC with respect to the plan is expected to increase
unreasonably if the plan is not terminated.21
PBGC must terminate a plan if the plan is unable to pay benefits that are currently due. A federal
court may order termination of the plan to protect the interests of participants, to avoid
unreasonable deterioration of the plan’s financial condition, or to avoid an unreasonable increase
in PBGC’s liability under the plan.
Table 2 provides information on the number of terminations since 1974 by single-employer DB
pension plans and the number of these terminations that resulted in PBGC becoming trustee of
the pension plan. From FY1974 through FY2020, PBGC became the trustee of 5,031 single-
employer DB pension plans. The number of single-employer plan terminations that result in
claims against PBGC is a relatively smal fraction of al plan terminations. Most pension plan
terminations are standard terminations.

21 29 U.S.C. §1341.
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Table 2. Number of Standard and Trusteed Pension Plan Terminations
Number of Standard
Fiscal Year
Termination Filings
Trusteed Terminations
1974-1979
7,955
586
1980-1984
28,025
622
1985-1989
42,599
537
1990-1994
24,171
694
1995-1999
15,089
444
2000-2004
7,493
714
2005
1,108
129
2006
1,247
89
2007
1,233
78
2008
1,405
83
2009
1,294
191
2010
1,308
156
2011
1,400
100
2012
1,332
118
2013
1,481
97
2014
1,373
67
2015
1,197
53
2016
1,225
68
2017
1,350
47
2018
1,468
46
2019
-
46
2020
-
67
Total
143,753
5,031
Source: Pension Benefit Guaranty Corporation Pension Insurance Data Book, 201 8, Table S-3, and PBGC, PBGC
Annual Report 2020.
Notes: In a standard termination, a pension plan has sufficient assets from which to pay 100% of the participants’
promised benefits. In a trusteed termination, PBGC becomes trustee of the plan and participants receive their
benefits, up to a statutory maximum amount, from PBGC. Data for standard terminations in FY2019 and FY2020
are not yet available.
Employer Liability to PBGC
Following a distress or involuntary termination, the plan’s sponsor and every member of that
sponsor’s controlled group are liable to PBGC for the plan’s shortfal . The shortfal is measured
as the value of the plan’s liabilities as of the date of the plan’s termination minus the fair market
value of the plan’s assets on the date of termination. The liability is joint and several, meaning
that each member of the controlled group can be held responsible for the entire liability.
General y, the obligation is payable in cash or negotiable securities to PBGC on the date of
termination. Failure to pay this amount upon demand by PBGC may trigger a lien on the property
of the contributing employer’s controlled group. Often, however, a plan undergoing a distress
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termination is sponsored by a company that is in bankruptcy proceedings, in which case PBGC
does not have legal authority to create (or perfect) a lien against the plan sponsor. In such
instances, PBGC has the same legal standing as other creditors of the plan sponsor, and its ability
to recover assets is limited.
Benefit Payments
When an underfunded plan terminates, the benefits PBGC wil pay depend on the statutory limit
on guaranteed benefits, the amount of the terminated plan’s assets, and recoveries by PBGC from
the employer that sponsored the terminated plan.
Guaranteed Benefits
Within limits set by Congress, PBGC guarantees any retirement benefit that was nonforfeitable
(vested) on the date of plan termination other than benefits that vest solely on account of the
termination, and any death, survivor, or disability benefit that was owed or was in payment status
at the date of plan termination. General y, only that part of the retirement benefit that is payable in
monthly instal ments (rather than, for example, lump-sum benefits payable to encourage early
retirement) is guaranteed. Retirement benefits that commence before the plan’s normal age of
retirement are guaranteed, provided they meet the other conditions of guarantee. Contingent
benefits (for example, early retirement benefits provided only if a plant shuts down) are
guaranteed only if the triggering event occurs before plan termination. Following enactment of
the Pension Protection Act of 2006 (PPA; P.L. 109-280), PBGC guarantee for such benefits is
phased in over a five-year period commencing when the event occurs.22
Maximum Benefits for Participants in Single-Employer Pension Plans
ERISA sets a maximum on the individual benefit amount that PBGC can guarantee.23
The ceiling for single-employer plans is adjusted annual y for national wage growth. The
maximum pension guarantee is $72,409 a year for workers aged 65 in plans that terminate in
2021. This amount is adjusted annual y and is decreased if a participant begins receiving the
benefit before the age of 65 (reflecting the fact that they wil receive more monthly pension
checks over their expected lifetime) or if the pension plan provides benefits in some form other
than equal monthly payments for the life of the retiree.24 The benefit is increased if a participant
begins receiving the benefit after the age of 65 (reflecting the fact that they wil receive fewer
monthly pension checks over their expected lifetime). Table 3 contains examples of PBGC’s
annual maximum benefit for individuals who begin receiving benefits at the ages of 60, 65, or 70
and who receive either a straight-life annuity or a joint and 50% survivor annuity.

22 For example, PBGC pays 20% of a participant’s shutdown benefit if the benefit was adopted within one year prior to
plan termination. T he percentage increases from year to year. If the benefit was adopted more than five years prior to
plan termination, PBGC pays 100% of the participant’s shutdown benefit. For more information, see PBGC, “Benefits
Payable in T erminated Single-Employer Plans; Limitations on Guaranteed Benefits; Shutdown and Similar Benefits,”
79 Federal Register 25667-25675, May 6, 2014.
23 T he maximum benefit is different for participants in terminated single-employer pension plans compared with
participants in insolvent multiemployer pension plans.
24 A straight-life annuity pays the monthly benefit until the participant dies. A joint and 5 0% survivor annuity provides
a participant with fixed monthly lifetime benefit payments and, upon death, continues lifetime payments reduced by
50% to the spouse or other beneficiary.
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Table 3. Examples of PBGC Annual Maximum Benefits for Single-Employer Plans
That Terminate in 2021
Benefit Begins at Age

60
65
70
Straight-Life Annuity
$47,066
$72,409
$120,199
Joint and 50% Survivor Annuity, Assuming Both
$42,359
$65,168
$108,179
Spouses Are the Same Age
Source: PBGC, Maximum Monthly Guarantee Tables, available at http://www.pbgc.gov/wr/benefits/guaranteed-
benefits/maximum-guarantee.html.
The reduction in the maximum guarantee for benefits paid before the age of 65 is 7% for each of
the first five years under age 65, 4% for each of the next five years, and 2% for each of the next
10 years.25 The reduction in the maximum guarantee for benefits paid in a form other than a
straight-life annuity depends on the type of benefit, and if there is a survivor’s benefit, the
percentage of the benefit continuing to the surviving spouse and the age difference between the
participant and spouse.26
Only “basic benefits” are guaranteed. These include benefits beginning at normal retirement age
(usual y 65), certain early retirement and disability benefits, and benefits for survivors of
deceased plan participants. Only vested benefits are insured. The average monthly benefit
received by retirees in FY2018 was $578.27 In a study released in 2008, PBGC indicated that
more than 80% of PBGC recipients in single-employer plans trusteed by PBGC received their full
benefits.28 Among participants whose benefits were reduced, the average reduction was 28%.
Assets of a terminated plan are al ocated to pay benefits according to a priority schedule
established by statute. Under this schedule, some nonguaranteed benefits are payable from plan
assets before certain guaranteed benefits. For example, benefits of participants who have been
receiving pension payments for more than three years have priority over guaranteed benefits of
participants not yet receiving payments.
PBGC also is required to pay participants a portion of their unfunded, nonguaranteed benefits
based on a ratio of assets recovered from the employer to the amount of PBGC’s claim on
employer assets (cal ed Section 4022(c) benefits).

25 Further information on the maximum benefit is available in 29 C.F.R. §4022.23, Computation of Maximum
Guaranteeable Benefits.
26 A single life annuity is a benefit that pays an equal monthly benefit for the life of the participant. A survivor’s
annuity pays an equal monthly benefit for the longer of the life of the participant and the participant’s spouse. T he
monthly payment in a survivor’s annuity is typically less than the amount of the single life annuity.
27 See Pension Benefit Guaranty Corporation, Pension Insurance Data Book, 2018, T able S-24, https://www.pbgc.gov/
sites/default/files/2018_pension_data_tables.pdf. Data for the average benefit in 2019 or 2020 are not available at the
time of this report.
28 PBGC studied 125 single-employer plans that were terminated prior to 2006. See Pension Benefit Guaranty
Corporation, PBGC’s Guarantee Lim its—an Update, September 2008, http://www.pbgc.gov/docs/guaranteelimits.pdf.
CRS is not aware of a more recent study regarding the percentage of participants who receive their full pension
benefits.
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Pension Benefit Guaranty Corporation (PBGC): A Primer

Multiemployer Pension Insurance Program
In the case of multiemployer plans, PBGC insures plan insolvency, rather than plan termination.
Accordingly, a multiemployer plan need not be terminated to qualify for PBGC financial
assistance. A plan is insolvent when its available resources are not sufficient to pay the plan
benefits for the plan year in question, or when the sponsor of a plan in reorganization reasonably
determines, taking into account the plan’s recent and anticipated financial experience, that the
plan’s available resources wil not be sufficient to pay benefits that come due in the next plan
year.
If it appears that available resources wil not support the payment of benefits at the guaranteed
level, PBGC wil provide the additional resources needed as a loan, which PBGC indicates are
rarely repaid.29 PBGC may provide loans to the plan year after year. If the plan recovers from
insolvency, it must begin repaying loans on reasonable terms in accordance with regulations.
Only one multiemployer plan has repaid any of its financial assistance.30
Benefits for Participants in Multiemployer Pension Plans
PBGC guarantees benefits to multiemployer plans as it does for single-employer plans, although a
different guarantee ceiling applies. Multiemployer plans determine benefits by multiplying a flat
dollar rate by years of service, so the benefit guarantee ceiling is tied to this formula. The benefit
guarantee limit for participants in multiemployer plans equals a participant’s years of service
multiplied by the sum of (1) 100% of the first $11 of the monthly benefit rate and (2) 75% of the
next $33 of the benefit rate.31 For a participant with 30 years of service, the guaranteed limit is
$12,870.32 This benefit formula is not adjusted for increases in the national wage index. PBGC
estimated in 2015 that 79% of participants in multiemployer plans that receive financial
assistance received their full benefit. However, in plans that may need financial assistance in the
future, only 49% of participants would receive their full benefit payment.33 Among ongoing plans
(neither receiving PBGC financial assistance nor terminated and expected to receive financial
assistance), the average benefit is almost twice as large as the average benefit in terminated plans.
This suggests that a larger percentage of participants in plans that receive PBGC financial
assistance in the future are likely to see benefit reductions as a result of the PBGC maximum
guarantee level.34

29 See PBGC, PBGC Annual Report 2020, p. 39.
30 See PBGC, 2018 Pension Insurance Data Tables, T able M-4, https://www.pbgc.gov/sites/default/files/
2018_pension_data_tables.pdf.
31 An accrual rate is a factor in the pension benefit formula (expressed either as a dollar amount or as a percentage of
salary) at which a pension benefit is earned. In single-employer pension plans, the pension benefits formula is typically
expressed as the number of years participating in the plan times the accrual rate (e.g., 1% or 2%) times a measure of
salary (e.g., the average of the participant’s highest five years of salary). In multiemployer pension plans, the pension
benefits formula is typically expressed as the number of months or years of service times a dollar amount.
32 T his is calculated as [30 × ((100% × $11) + (75% ×$33)] = $1,072.50 per month, which is $12,870 per year.
33 See Pension Benefit Guaranty Study, PBGC’s Multiemployer Guarantee, March 2015.
34 T he average monthly benefit in terminated plans that are likely to receive PBGC financial assistance was $383.33; in
plans that were projected to become insolvent within 10 years it was $546.17; and in remaining, ongoing plans it was
$1,010.44. See Pension Benefit Guaranty Corporation, PBGC’s Multiemployer Guarantee, March 2015, Figure 4,
https://www.pbgc.gov/documents/2015-ME-Guarantee-Study-Final.pdf.
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Current Financial Status
The most commonly used measure of PBGC’s financial status is its net financial position, which
is the difference between PBGC’s assets and its liabilities. At the end of FY2020, PBGC’s assets
were $146.6 bil ion, PBGC liabilities were $194.9 bil ion, and its net financial position
was -$48.3 bil ion.35
PBGC’s main assets are the value of its trust fund and revolving funds.36 The trust fund contains
the assets of the pension plans of which PBGC becomes trustee and the returns on the trust fund
investments. The revolving funds contain the premiums that plan sponsors pay to PBGC,
transfers from the trust fund that are used to pay for participants’ benefits, and returns on the
revolving funds’ investments in U.S. Treasury securities.
PBGC’s main liabilities are the estimated present values of (1) future benefits payments in the
single-employer program and (2) future financial assistance to insolvent plans in the
multiemployer program.37
Table 4 provides information on the net financial position of PBGC from FY1999 through
FY2020. PBGC has had an end of fiscal year deficit each year since FY2002.
Table 4. PBGC Single and Multi-Employer Insurance Programs:
Net Financial Position, FY1999-FY2020
(bil ions of dol ars)
Single-Employer
Multiemployer
Total PBGC
Fiscal Year
Program
Program
Surplus / Deficit
1999
$7.0
$0.2
$7.2
2000
9.7
0.3
10.0
2001
7.7
0.1
7.8
2002
-3.6
0.2
-3.5
2003
-11.2
-0.3
-11.5
2004
-23.3
-0.2
-23.5
2005
-22.8
-0.3
-23.1
2006
-18.1
-0.7
-18.9
2007
-13.1
-1.0
-14.1
2008
-10.7
-0.5
-11.2
2009
-21.1
-0.9
-21.9
2010
-21.6
-1.4
-23.0

35 T he dollar amounts do not sum because of rounding. As reported on page 27 of PBGC’s FY2020 Annual Report,
total assets were $146,616 million, total liabilities were $194,887 million, and the net financial position was -$48,271
million.
36 Other assets include securities lending collateral and receivables.
37 Other liabilities include payables. PBGC’s benefit obligations are spread out over many years in the future. T hese
future benefits are calculated and reported as current dollar values (also called present value). Benefits that are expected
to be paid in a particular year in the future are calculated so they can be expressed as a current value. T he process is
called discounting and it is the reverse of the process of compounding, which projects how much a dollar amount will
be worth at a point in the future. For more information, see the appendix in CRS Report R43305, Multiem ployer
Defined Benefit (DB) Pension Plans: A Prim er.
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Single-Employer
Multiemployer
Total PBGC
Fiscal Year
Program
Program
Surplus / Deficit
2011
-23.3
-2.8
-26.0
2012
-29.1
-5.2
-34.3
2013
-27.4
-8.3
-35.7
2014
-19.3
-42.4
-61.7
2015
-24.0
-52.3
-76.3
2016
-20.6
-58.8
-79.4
2017
-10.9
-65.1
-76.0
2018
2.4
-53.9
-51.4
2019
8.7
-65.2
-56.5
2020
15.5
-63.7
-48.3
Source: PBGC Pension Insurance Data Books and PBGC, PBGC Annual Report 2020, p. 27.
The weakness in the economy in 2001, particularly in the steel and airline industries, led to large
and expensive plan terminations that created a deficit for PBGC. By the end of 2004, the single-
employer program had a deficit of $23.3 bil ion. For the first time since FY2001, partly as a result
of increases to the premiums that employers pay, the single-employer program showed a surplus
in FY2018.38
The multiemployer program had a surplus from FY1982 to FY2002, but PBGC reported deficits
each year since. PBGC projects that the multiemployer program wil very likely become insolvent
in FY2026 and wil almost certainly become insolvent by FY2027.39 Both the single-employer
and multiemployer programs are on the Government Accountability Office’s (GAO’s) list of
high-risk government programs.40
Benefit Payments in the Single-Employer Insurance Program
Table 5 shows that approximately 861,000 participants received monthly payments from PBGC
in FY2018 (the most recent year for which comprehensive data on benefit payments are
available).41 The average monthly payment was $533 and the median monthly payment was $278.
Among retiree payees, the average monthly benefit was $578 and among beneficiary payees, the
average monthly benefit was $308.42 Approximately 39,000 participants received a lump-sum
payment in FY2018, and the average amount of the lump-sum payment was $2,252.43

38 See PBGC, PBGC Annual Report 2020, p. 28.
39 See PBGC Projections Report 2019, p. 7, at https://www.pbgc.gov/sites/default/files/fy-2019-projections-report.pdf.
40 More information is available at http://www.gao.gov/highrisk/pension_benefit/why_did_study.
41 See PBGC Pension Insurance Data Book, 2018, T ables S-20, at https://www.pbgc.gov/sites/default/files/
2018_pension_data_tables.pdf. Table A-2 reports data from PBGC’s Data Book. PBGC’s FY2017 Annual Report
indicated that approximately 840,000 participants were receiving monthly benefits at the end of FY2017.
42 See PBGC Pension Insurance Data Book, 2018, T ables S-24 and S-25. A retiree is a pension plan participant who
has retired. A beneficiary is a person designated by a pension plan participant to receive some or all of the participant’s
pension benefits upon the participant’s death.
43 See PBGC Pension Insurance Data Book, 2018, T able S-20. T he data book does not provide similar information for
multiemployer plans. In the multiemployer program, PBGC does not provide benefits directly to participants, but to the
plans.
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Table 5. PBGC Benefit Payments and Payees, FY2003-FY2018
(single-employer insurance program)

Periodic Pension Payments
Lump-Sum Payments

Number of
Number of
Number of
Annual Total
Payees in
Average
Median
Annual Total
Payees in
Deferred
(millions of
Year
Monthly
Monthly
(millions of
Year
Average
Payees
Fiscal Year
dollars)
(thousands)
Payment
Payment
dollars)
(thousands)
Payment
(thousands)
2003
2,401
457
453
275
87
22
4,220
375
2004
2,918
517
475
281
88
21
4,229
424
2005
3,607
683
487
286
78
17
4,633
489
2006
4,011
612
531
296
71
13
5,145
520
2007
4,179
630
539
281
87
17
5,154
534
2008
4,211
639
534
289
81
17
4,828
495
2009
4,409
743
598
305
69
12
4,289
565
2010
5,361
746
594
316
106
16
6,661
614
2011
5,172
775
579
287
168
48
3,517
595
2012
5,299
781
559
284
85
38
2,198
590
2013
5,386
799
539
283
63
39
1,600
600
2014
5,436
812
539
283
86
39
2,014
488
2015
5,486
825
536
279
84
40
2,054
560
2016
5,545
837
535
278
113
36
3,031
559
2017
5,578
839
535
278
121
40
2,535
552
2018
5,704
861
533
278
87
39
2,252
542
Source: Pension Benefit Guaranty Corporation Pension Insurance Data Book, 2018, Table S-20.
Notes: Deferred payees are participants who are owed, but not yet receiving, benefits under the plan. Data for FY2019 and FY2020 are not available at the time of this
report. Due to rounding of individual items, the average monthly payment may not be exactly equal to the total payments divided by the number of payees. Average
monthly payment is not equal to annual total payments divided by number of payees because some payees did not receive benefits for al 12 months in a year.
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Pension Benefit Guaranty Corporation (PBGC): A Primer

Finances of the Single-Employer Insurance Program
Figure 1 displays the net financial position of PBGC’s single-employer program from FY1980 to
FY2020. In FY1996, PBGC showed a surplus in its single-employer program for the first time in
its history. That surplus was $9.7 bil ion in FY2000, helped by the strong performance of the
equity markets in the mid- and late 1990s. In FY2020, PBGC’s single-employer program showed
a surplus of $15.5 bil ion. The improvement in the financial condition of the single-employer
program is a result of several factors, such as investment income (there has not been an
investment loss since FY2008) and increase in premium income (premium income was 2.96 times
greater in FY2020 compared to FY2011).44
Figure 1. Financial Position of PBGC Single-Employer Insurance Program,
FY1980-FY2020
(Bil ions of Dol ars)

Source: PBGC Pension Insurance Data Books and PBGC, PBGC Annual Report 2020.
Finances of the Multiemployer Insurance Program
Table 6 provides data on the number of plans that have received financial assistance and the
annual amounts of the financial assistance from FY1995 to FY2020. Ninety-one multiemployer
plans received financial assistance in FY2020. The FY2020 annual report indicated that
approximately 79,600 multiemployer plan participants received financial assistance in FY2020

44 See the Appendix Historical PBGC Premium Rates for the history of PBGC premium rates. See also PBGC,
PBGC Annual Report 2020, p. 28.
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and that approximately 27,600 participants wil receive benefits in the future because they are in
plans that are currently receiving financial assistance.45
Table 6. PBGC Multiemployer Insurance Program:
Financial Assistance to Pension Plans, FY1995-FY2020
Number of Plans
Total Amount of
Receiving Financial
Financial Assistance
Year
Assistance
(millions)
1995
9
$4.3
1996
12
4.0
1997
14
4.5
1998
18
5.4
1999
21
19.2
2000
21
91.0
2001
22
4.5
2002
23
4.9
2003
24
5.0
2004
27
10.1
2005
29
13.8
2006
33
70.1
2007
36
71.9
2008
42
84.6
2009
43
85.6
2010
50
97.1
2011
49
114.3
2012
49
95.0
2013
44
89.0
2014
53
97.0
2015
57
103.0
2016
65
113.0
2017
72
141.0
2018
78
153.0
2019
85
160.0
2020
91
173.0
Source: PBGC Pension Insurance Data Books and FY2016-FY2020 Annual Reports.
Figure 2 indicates that the financial condition of the multiemployer insurance program has been
worsening. The deficit in the multiemployer insurance program increased from $8.3 bil ion in
FY2013 to $42.4 bil ion in FY2014, and $65.1 bil ion in FY2017. The large increase in the deficit
in FY2014 was the result of the increase in the likelihood of the insolvency of several large

45 See PBGC, PBGC Annual Report 2020, p. 3.
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multiemployer pension plans in financial distress. The deficit then decreased to $53.9 bil ion in
FY2018, increased to $65.2 bil ion in FY2019, and decreased to $63.7 bil ion in FY2020.
PBGC notes that the multiemployer program deficit would have increased in FY2020 if not for
legislative action included in the Further Consolidated Appropriations Act of 2020 (P.L. 116-
94).46 A provision in this bill provided financial assistance to the United Mine Workers of
America (UMWA) 1974 Pension Plan, which was (prior to the financial assistance) projected to
become insolvent in the 2022-2023 plan year. In 2017, the UMWA plan was in critical and
declining status and had 96,324 participants.47
Figure 2. Financial Position of the Multiemployer Insurance Program of the Pension
Benefit Guaranty Corporation, FY1980-FY2020
(Bil ions of Dol ars)

Source: PBGC Pension Insurance Data Books and FY2020 Annual Report.
PBGC and the Federal Budget
PBGC’s budgetary cash flows are based on its premium income, interest income, benefit outlays,
and the interaction of PBGC’s trust and revolving funds. The trust fund contains the assets of the

46 See PBGC, PBGC Annual Report 2020, p. 39.
47 For more data on multiemployer plans, see CRS Report R45187, Data on Multiemployer Defined Benefit (DB)
Pension Plans. A plan is in critical and declining status if (1) it is in critical status and (2) the plan actuary projects that
the plan will become insolvent within the current year or within either the next 14 years or the next 19 years, as
specified in law. Plans in critical and declining status must provide notice to plan participants, beneficiaries, the
collective bargaining parties, PBGC, and DOL.
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pension plans of which PBGC becomes trustee and the returns on the trust fund investments. 48
Revolving funds contain the premiums that plan sponsors pay to PBGC, transfers from the trust
fund that are used to pay for participants’ benefits, and returns on the revolving funds’
investments in U.S. Treasury securities.
PBGC Trust Fund
When PBGC becomes trustee of a single-employer pension plan, the assets of the terminated
pension plan are transferred to PBGC and placed in a nonbudgetary trust fund.49 Transfers of
assets to the trust fund do not appear in the federal budget and the assets of this trust fund do not
appear on the federal balance sheet. The assets of the trust fund are managed by private-sector
money managers in accordance with an investment policy established by PBGC’s board of
directors. The current investment policy establishes assets al ocations of 30% for equities and
other nonfixed income assets, and 70% for fixed income.50 Trust fund investments totaled $82.6
bil ion at the end of FY2020.51
PBGC Revolving Funds
ERISA authorized the creation of seven revolving funds for PBGC, although only three revolving
funds have been used by PBGC. The revolving funds contain the premiums paid by single-
employer and multiemployer pension plan sponsors, returns on revolving funds’ investments, and
transfers from the trust fund that are used to pay benefits. Each year, PBGC transfers funds from
the trust fund to the revolving funds to pay for a share of participants’ benefits.52
Al revolving funds are invested in Treasury securities, though only certain revolving funds are
required by law to be invested in Treasury securities.53 The revolving funds’ assets at the end of
FY2020 were $2.8 bil ion for Fund 1, $3.0 bil ion for Fund 2, and $48.9 bil ion for Fund 7, for a
total of $54.6 bil ion.54
The revolving funds are on-budget accounts: increases or decreases in the revolving funds appear
as on-budget federal receipts and outlays. The funds’ gross outlays include PBGC benefit
payments and administrative expenses and receipts include premiums paid, interest on federal
securities, and reimbursements from the trust fund.
Because increases in the premiums paid by pension plan sponsors to PBGC are increases in
federal revenue, some stakeholders and policymakers have criticized recent PBGC premium
increases because they feel increases in premiums are used to offset other federal spending, do

48 For more information, see Congressional Budget Office, A Guide to Understanding the Pension Benefit Guaranty
Corporation, September 2005, http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/66xx/doc6657/09-23-
guidetopbgc.pdf.
49 When PBGC becomes trustee of a single-employer pension plan, the plan typically has assets in it. T hese assets are
transferred to PBGC trust fund. PBGC does not become trustee of multiemployer plans, so it does not take any
multiemployer plan assets.
50 See Pension Benefit Guaranty Corporation, “Pension Benefit Guaranty Corporation Investment Policy Statement –
September 2016,” https://www.pbgc.gov/documents/Investment-Policy-Statement.pdf.
51 See PBGC, PBGC Annual Report 2020, p. 45.
52 A GAO report indicated that the formula for the transfer is net trust fund assets divided by the present value of future
benefits excluding probable terminations. See GAO, Pension Benefit Guaranty Corporation: Asset Managem ent Needs
Better Stewardship, GAO-11-271, June 2011, http://www.gao.gov/new.items/d11271.pdf.
53 See PBGC, PBGC Annual Report 2020, p. 45.
54 See PBGC, PBGC Annual Report 2020, p. 45.
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not address the financial condition of PBGC, and may discourage employers from maintaining
their DB pension plans.55
Future Financial Condition
In its FY2019 Projections Report,56 PBGC estimated its financial condition over the next 10
years. The report indicated that the single-employer program is likely to remain out of deficit over
the next decade and the multiemployer program is likely to run out of money in FY2026. The
average estimate of PBGC’s simulations was a $46.3 bil ion surplus for the single-employer
program at the end of FY2029.57
PBGC projected that the multiemployer program is very likely to become insolvent before the
end of FY2026 and almost certainly by FY2027.58 This is a result of the likely insolvency of
several large multiemployer pension plans. PBGC’s FY2020 Annual Report indicated that the
multiemployer program’s probable exposure to future financial assistance would be $63.9
bil ion.59 Premium levels are likely inadequate to provide continued financial assistance to
insolvent multiemployer plans. The financial assistance to these plans could exhaust PBGC’s
ability to guarantee participants’ benefits. PBGC has indicated that once resources are exhausted
in the PGBC’s multiemployer program, insolvent plans would be required to reduce benefits to
levels that could be sustained through premium collections only.60
The Multiemployer Pension Reform Act of 2014 (MPRA, enacted as part of P.L. 113-235),
al owed, among other provisions, multiemployer DB pension plans that expect to become
insolvent to reduce benefits to participants in these plans. An insolvent plan has no assets from
which to pay any benefits. Plans that reduce benefits to forestal insolvency would not require
financial assistance from PBGC, reducing the amount of future financial assistance PBGC would
expect to provide. PBGC indicated that the use of benefit suspensions and partitions under MPRA
would not greatly affect the likelihood of insolvency.61

55 See, for example, Rep. Jim Renacci, “Renacci, Pocan Introduce the Pension and Budget Integrity Act,” press release,
January 31, 2017, https://renacci.house.gov/index.cfm/press-releases?ID=1F1896CA-3D93-477C-8B71-
0DDF8C672920.Sean Forbes, “ House Approves Budget Agreement T hat Includes Hikes in PBGC Premiums,” Pension
& Benefits Reporter, December 17, 2013, or Interindustry Forecasting at the University of Maryland, Increasing.
Pension. Prem ium s: The Im pact on Jobs and Econom ic Growth , May 2014, http://www.nam.org/~/media/
0948C22BD34742678A3DA9078EA28915/Increasing_Pension_Premiums_Full_Report_MAY2014.pdf .
56 T he Projections Report was formerly called the Exposure Report. It is available at http://www.pbgc.gov/about/
projections-report.html.
57 T o estimate the likelihood of PBGC’s future financial condition, PBGC uses an internally developed computer
modelling program that it calls the Pension Insurance Modelling System (SIMS). Separate models are used for the
single-employer program (SE-SIMS) and the multiemployer program (ME-SIMS). For more discussion of SIMS, see
Jeffrey R. Brown, Douglas J. Elliott, and T racy Gordon, et al., A Review of the Pension Benefit Guaranty Corporation
Pension Insurance Modeling System , Brookings Institution, September 11, 2013, http://www.brookings.edu/research/
papers/2013/09/11-review-pension-benefit-guaranty-corporation-pension. See PBGC Projections Report 2019, p. 1.
58 See PBGC Projections Report 2019, p. 1.
59 Plans are classified as “probable” if they are (1) terminated and underfunded but not yet receiving financial
assistance or (2) ongoing but expected to become insolvent within 10 years. See PBGC, PBGC Annual Report 2020, p.
60.
60 See Pension Benefit Guaranty Corporation, PBGC Insurance of Multiemployer Pension Plans, March 2016,
https://www.pbgc.gov/documents/Five-Year-Report -2016.pdf.
61 See PBGC Projections Report 2019, p. 8. PBGC’s likely insolvency in 2026 is a result of the projected insolvency in
2025 of one of the largest multiemployer DB pension plans. T his plan ’s application to reduce benefits was rejected by
the U.S. T reasury in May 2016. See Notice of Critical and Declining Status, Central States, Southeast and Southwest
Areas Pension Plan, at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/public-disclosure/status-
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In response to the increasing concerns of policymakers and stakeholders (such as participants,
participating employers, and plans), the Bipartisan Budget Act of 2018 (P.L. 115-123) created a
new joint select committee of the House and Senate: The Joint Select Committee on Solvency of
Multiemployer Pension Plans.62 The committee was tasked with formulating recommendations
and legislative language by November 30, 2018, that would “significantly improve the solvency
of multiemployer pension plans and the Pension Benefit Guaranty Corporation.”63 The committee
did not release a report containing recommendations or legislative language by the deadline.64
PBGC indicated that the effects of the Coronavirus Disease 2019 are uncertain, because plan
terminations and insolvencies may occur for several years after an economic downturn.65

notices/declining/2020/central-states-southeast -and-southwest -areas-pension-plan.pdf.
62 See CRS Report R45107, Joint Select Committee on Solvency of Multiemployer Pension Plans: Structure,
Procedures, and CRS Experts.
63 For more information on the policy issues relevant to the work of the committee, see CRS Report R45311, Policy
Options for Multiem ployer Defined Benefit Pension Plans.
64 See Joint Select Committee on Solvency of Multiemployer Pension Plans, “Hatch, Brown Commit to Continued
Work on Pension Crisis Past Nov. 30,” press release, November 29, 2018, https://www.pensions.senate.gov/content/
hatch-brown-commit -continued-work-pension-crisis-past-nov-30.
65 See PBGC, PBGC Annual Report 2020, p. 33.
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Appendix. Historical PBGC Premium Rates
Table A-1 provides historical data on the single-employer program premium levels.
Table A-1. PBGC Single-Employer Program Premium Levels
Flat-Rate
Variable-Rate
Termination

Authorizing Statute
Premium
Premium
Premium
September 2, 1974-1977
Employee Retirement Income
$1.00
-
-
Security Act of 1974
(ERISA; P.L. 93-406)a
1978-1985
Multiemployer Pension Plan
$2.60
-
-
Amendments Act of 1980
(MPPAA, P.L. 96-364)
1986-1987
Consolidated Omnibus
$8.50
-
-
Budget Reconciliation Act of
1985
(P.L. 99-272)
1988-1990
Omnibus Budget
$16.00
$6.00
-
Reconciliation Act of 1987
(P.L. 100-203)
1991-2005
Omnibus Budget
$19,00
$9.00
-
Reconciliation Act of 1990
(P.L. 101-508)
2006
Deficit Reduction Act of 2005
$30.00
$9.00
$1,250.00c
(P.L. 109-171)b
2007

$31.00
$9.00
$1,250.00
2008

$33.00
$9.00
$1,250.00
2009

$34.00
$9.00
$1,250.00
2010-2012

$35.00
$9.00
$1,250.00
2013
MAP-21 (P.L. 112-141)d
$42.00
$9.00
$1,250.00
2014

$49.00
$14.00
$1,250.00
2015
Continuing Appropriations
$57.00
$24.00
$1,250.00
Resolution, 2014 (P.L. 113-67)
2016

$64.00
$30.00
$1,250.00
2017
Bipartisan Budget Act of 2015
$1,250.00
(P.L. 114-74)e
$69.00
$34.00
2018

$74.00
$38.00
$1,250.00
2019f

$80.00
$43.00
$1,250.00
2020

$83.00
$45.00
$1,250.00
2021

$86.00
$46.00
$1,250.00
Source: Congressional Research Service.
a. The Employee Retirement Income Security Act of 1974 (ERISA; P.L. 93-406) established the initial premium
rate of $1.00 per participant.
b. The Deficit Reduction Act of 2005 (P.L. 109-171) adjusted the flat-rate premium annual y for increases in
the national wage index beginning in 2007.
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c. The Pension Protection Act of 2006 (PPA; P.L. 109-280) provided for a special termination premium of
$2,500 per participant for pension plans of commercial airlines that terminated within a five-year period that
began with the year that a commercial airline plan adopted funding rules made available to commercial
airlines in the PPA.
d. MAP-21 (P.L. 112-141) increased the variable-rate premium by $4 (after the 2013 level is adjusted for
changes in the national wage index) per $1,000 of unfunded benefits in 2014, and by another $5 (after the
2014 level is adjusted for changes in the national wage index) per $1,000 of unfunded vested benefits in
2015. The Continuing Appropriations Resolution, 2014 (P.L. 113-67) increased the variable-rate premium in
2015 by $10 (after the 2014 level is adjusted for changes in the national wage index) per $1,000 of unfunded
benefit and by another $5 in 2016 (after the 2015 premium is adjusted for changes in the national wage
index).
e. The Bipartisan Budget Act of 2015 (P.L. 114-74) increased the flat-rate premium to $69 in 2017, $74 in
2018, and $80 in 2019, and increased the variable-rate premium by $3 in 2017, an additional $4 in 2018, and
an additional $4 in 2019. After 2019, premiums are subject to indexing.
f.
Section 206 of the Setting Every Community Up for Retirement Enhancement Act, enacted as Division O of
P.L. 116-94, modified premiums for cooperative and smal employer charity (CSEC) plans. For plan years
beginning in 2019, CSEC pension plans—a type of single-employer plan sponsored by certain rural
cooperative and 501(c)(3) charities—pay a $19 flat-rate premium and a $9 per $1,000 unfunded vested
benefits variable rate premium. These premiums are not adjusted annual y for inflation.
Table A-2 provides historical data on the multiemployer program premium levels.
Table A-2. PBGC Multiemployer Program Premium Levels
Year
Authorizing Statute
Premium Rate
September 2, 1974-1980
Employee Retirement Income Security Act
$0.50
of 1974
(ERISA; P.L. 93-406)
September 1, 1979-September 26, 1980
Multiemployer Pension Plan Amendments
$0.50-$1.00a
Act of 1980
(MPPAA, P.L. 96-364)
September 27, 1980-September 26, 1984
$1.40
September 27, 1984-September 26, 1986
$1.80
September 27, 1986-September 26, 1988
$2.20
September 27, 1988-December 31, 2005

$2.60
2006-2007
Deficit Reduction Act of 2005 (P.L. 109-
$8.00b
171)
2008-2012

$9.00
2013
MAP-21 (P.L. 112-141)
$12.00
2014

$12.00
2015
The Multiemployer Pension Reform Act of
$26.00
2014 (P.L. 113-235)
2016

$27.00
2017

$28.00
2018

$28.00
2019

$29.00
2020

$30.00
2021

$31.00
Source: CRS and PBGC Premium Rates, at https://www.pbgc.gov/prac/prem/premium-rates.
Congressional Research Service

21

Pension Benefit Guaranty Corporation (PBGC): A Primer

a. $0.50 for plan year beginning in September 1979, growing gradual y to $1.00 for plan years beginning
September 1, 1980, to September 26, 1980.
b. From 2007 to 2012, this amount was adjusted annual y based on the national average wage index and
rounded to the nearest multiple of $1.

Author Information

John J. Topoleski
Elizabeth A. Myers
Specialist in Income Security
Analyst in Income Security

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Congressional Research Service
95-118 · VERSION 44 · UPDATED
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