Pension Benefit Guaranty Corporation (PBGC): A Primer

January 5, 2005 – February 7, 2023 95-118

Pension Benefit Guaranty Corporation
(PBGC): A Primer
Updated February 7, 2023
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, usually
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 is one that 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 FY2022, PBGC insured about 25,000 DB pension plans covering approximately 33 million
people. PBGC became the trustee of 32 newly terminated single-employer pension plans and
began providing financial assistance to an additional six multiemployer pension plans. At the end
of FY2022, 963,097 participants were receiving monthly benefits in the single-employer
program, and 5,031 single-employer pension plans were trusteed or pending trusteeship. PBGC
paid $7.1 billion in benefits to participants in the single-employer program in FY2022. In the
multiemployer program, 115 plans received $217 million in financial assistance in FY2022.
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 2023 and are trusteed by PBGC may receive up to
$81,000 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.
At the end of FY2022, PBGC had a total surplus of $37.7 billion, which consisted of a $36.6
billion surplus from the single-employer program and a $1.1 billion surplus from the
multiemployer program.
PBGC’s single-employer and multiemployer programs are funded by premiums set by Congress
and paid by the private sector employers that sponsor DB pension plans. Other sources of income
for the single-employer program are assets from terminated plans taken over by PBGC,
investment income, and recoveries collected from companies when they end underfunded pension
plans. Another source of income for the multiemployer program is investment income on its
revolving fund assets. The American Rescue Plan Act of 2021 (ARPA; P.L. 117-2) authorized the
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Pension Benefit Guaranty Corporation (PBGC): A Primer

Special Financial Assistance (SFA) program, which provides financial assistance to eligible
financially troubled multiemployer DB plans and represents a new source of financing outside of
PBGC’s revolving fund. SFA is administered by PBGC and financed by appropriations from
Congress. Due to SFA, PBGC estimated that its multiemployer program is likely to remain
solvent for the next 40 years.
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Appendixes
Appendix. Historical PBGC Premium Rates ................................................................................. 21

Contacts
Author Information ........................................................................................................................ 23

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, usually 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 FY2022, PBGC insured about 25,000 DB pension plans covering about 33 million people.2 It
paid or owed benefits to 1.6 million people.3 PBGC is the trustee of 5,100 single-employer plans.4
PBGC provided financial assistance to 91 multiemployer pensions.5 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.6 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.7
In previous years, PBGC had large deficits in its multiemployer program due to the projected
insolvencies of financially troubled multiemployer plans, which were projected to result in the
multiemployer program’s insolvency in 2025. Section 9704 in Title IX, Subtitle H, of the
American Rescue Plan Act of 2021 (ARPA, P.L. 117-2) authorized the Special Financial
Assistance (SFA) program, which provides financial assistance to eligible financially troubled
multiemployer DB pension plans.
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

1 These plans are authorized in §401(k) of the Internal Revenue Code.
2 See PBGC, PBGC Annual Report 2022, p. 25, at https://www.pbgc.gov/sites/default/files/documents/pbgc-annual-
report-2022.pdf.
3 PBGC, PBGC Annual Report 2022, p. 30.
4 PBGC, PBGC Annual Report 2022, p. 31.
5 PBGC, PBGC Annual Report 2022, p. 32.
6 See Pension Benefit Guaranty Study, PBGC’s Multiemployer Guarantee, March 2015, at https://www.pbgc.gov/
documents/2015-ME-Guarantee-Study-Final.pdf.
7 Pension Benefit Guaranty Study, PBGC’s Multiemployer Guarantee, March 2015.
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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
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.8
PBGC Financing
PBGC’s single-employer and multiemployer insurance programs are required by ERISA to be
self-supporting. These programs receive no appropriations from general revenue.9 Although SFA
provides assistance to multiemployer plans, it is accounted for separately from the traditional
financial assistance provided by PBGC’s multiemployer insurance program to insolvent plans.
Although ERISA states that the “United States is not liable for any obligation or liability incurred
by the corporation,”10 funds provided through the enactment of SFA are intended to ensure the
continued solvency of the multiemployer program. Some Members of Congress have expressed a
reluctance toward providing financial assistance to PBGC.11
The single-employer and multiemployer programs are funded by premiums set by Congress and
paid by the private sector employers that sponsor DB pension plans. Other sources of income for
the single-employer program are assets from terminated plans taken over by PBGC, investment
income, and recoveries collected from companies when they end underfunded pension plans. In
addition to premiums, the multiemployer program also receives investment income on its
revolving fund assets. The SFA program, which is financed by appropriations from Congress,
results in a new source of financing outside of PBGC’s revolving fund. 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.12

8 The President or board of directors can remove the PBGC director without cause.
9 Insurance programs refer to benefits paid to trusteed single-employer plans
10 See ERISA 4002 §1302(g)(2) and 29 U.S.C. 1302 §(g)(2).
11 For example, then-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, Examining 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 Multiemployer Pension System: What Reforms Should Policymakers Consider?, 113th
Cong., 1st sess., June 12, 2013. More recently, in 2021, Dr. Virginia Foxx, then-ranking member of the Committee on
Education and Labor (in the 118th Congress, chair of the Committee on Education and Workforce) and Rick Allen,
then-ranking member of the Subcommittee on Health, Employment, Labor, and Pensions, wrote in a comment letter to
PBGC’s interim final rule on SFA that the rule “implements the ill-conceived taxpayer-funded bailout of failing and
insolvent defined benefit multiemployer pension plans.” See https://www.pbgc.gov/sites/default/files/sfa-ifr-comment-
comm-ed-labor.pdf.
12 For an explanation of PBGC financing and the federal budget, see Congressional Budget Office (CBO), A Guide to
Understanding the Pension Benefit Guaranty Corporation, September 2005, at https://www.cbo.gov/sites/default/files/
109th-congress-2005-2006/reports/09-23-guidetopbgc.pdf.
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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 2023 are as follows:13
 Single-employer flat-rate premium: The sponsors of single-employer DB pension
plans pay an annual premium of $96 for each participant in the plan.14
 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 $52 for each $1,000 of unfunded vested benefits.15 There is
an annual per-participant limit of $652 for this premium.
 Single-employer termination premium: The sponsors of single-employer DB
pension plans that end in certain situations16 pay an annual premium of $1,250
per participant per year for three years following plan termination.17
 Multiemployer flat-rate premium: The sponsors of multiemployer DB pension
plans pay an annual premium of $35 for each participant in the plan in 2023.18
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 FY2021 and FY2022.
Table 1. Pension Benefit Guaranty Corporation Premium Income
(FY2021 and FY2022 by Type of Premium in Millions of Dollars)

FY2021
FY2022
Single-Employer

Flat-Rate Premium
$1,829
$1,821

Variable-Rate Premium
2,628
2,762

13 See PBGC, “Premium Rates,” at https://www.pbgc.gov/prac/prem/premium-rates.
14 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. This 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.
15 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.
16 The 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.
17 The termination premium was authorized in Deficit Reduction Act of 2005 (P.L. 109-171). The termination premium
is $2,500 for airlines that chose the funding relief available under §402 of the Pension Protection Act of 2006 (PPA;
P.L. 109-280) if the plan terminated within five years of choosing the funding relief.
18 A provision in P.L. 117-2 increased the multiemployer premium to $52 per participant beginning in 2031 and is to be
adjusted for increases in the national average wage index thereafter.
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FY2021
FY2022

Termination Premium
26
22
Multiemployer

Flat-Rate Premium
335
342
Source: PBGC, PBGC Annual Report 2022, Note 11: Premiums, at https://www.pbgc.gov/sites/default/files/
documents/pbgc-annual-report-2022.pdf.
Requirements for PBGC Coverage
PBGC covers only those DB plans that meet the qualification requirements of Section 401 of the
Internal Revenue Code (IRC).19 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;20
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 specifically 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.21
Pension Benefit Insurance Programs
PBGC’s single-employer and multiemployer insurance programs each 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

19 See 26 U.S.C. §401.
20 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.
21 See 29 U.S.C. §1321.
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multiemployer plan is one that 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.22 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. Generally, benefit
liabilities equal all benefits earned to date by plan participants, including vested and nonvested
benefits (which automatically become vested at the time of termination), plus certain early
retirement supplements and subsidies. Benefit liabilities also may include certain contingent
benefits.23 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.24 The asset reversion is included in the employer’s gross income
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

22 More information is available in CRS Report RS22624, The Pension Benefit Guaranty Corporation and Single-
Employer Plan Terminations.
23 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.
24 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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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
will be unable to continue in business outside the reorganization process and
approves the plan termination;
3. PBGC determines that termination is necessary to allow 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 will 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
 the long-run loss to PBGC with respect to the plan is expected to increase
unreasonably if the plan is not terminated.25
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 FY2022, PBGC became the trustee of 5,092 single-
employer DB pension plans. The number of single-employer plan terminations that result in
claims against PBGC is a relatively small fraction of all plan terminations. Most pension plan
terminations are standard terminations.
Table 2. Number of Standard and Trusteed Pension Plan Terminations

25 29 U.S.C. §1341.
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Number of Standard
Number of Trusteed
Fiscal Year
Termination Filings
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
51
2018
1,468
53
2019
1,500
29
2020
1,725
67
2021
1,574
42
2022
1,634
32
Total
150,186
5,100
Source: Pension Benefit Guaranty Corporation Pension Insurance Data Book, 2019, Table S-3, and PBGC, PBGC
Annual Report 2020, PBGC Annual Report 2021, and PBGC Annual Report 2022.
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. The number of trusteed terminations reported in
most recent years are subject to change upon trusteeship finalization.
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 shortfall. The shortfall 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.
Generally, 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
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of the contributing employer’s controlled group. Often, however, a plan undergoing a distress
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 will 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. Generally, only that part of the retirement benefit that is payable in
monthly installments (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.26
Maximum Benefits for Participants in Single-Employer Pension Plans
ERISA sets a maximum on the individual benefit amount that PBGC can guarantee.27
The ceiling for single-employer plans is adjusted annually for national wage growth. The
maximum pension guarantee is $81,000 a year for workers aged 65 in plans that terminate in
2023. This amount is adjusted annually and is decreased if a participant begins receiving the
benefit before the age of 65 (reflecting the fact that they will 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.28 The benefit is increased if a participant
begins receiving the benefit after the age of 65 (reflecting the fact that they will 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.

26 For example, PBGC pays 20% of a participant’s shutdown benefit if the benefit was adopted within one year prior to
plan termination. The 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 Terminated Single-Employer Plans; Limitations on Guaranteed Benefits; Shutdown and Similar Benefits,”
79 Federal Register 25667-25675, May 6, 2014.
27 The maximum benefit is different for participants in terminated single-employer pension plans compared with
participants in insolvent multiemployer pension plans.
28 A straight-life annuity pays the monthly benefit until the participant dies. A joint and 50% 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 2023
Benefit Begins at Age

60
65
70
Straight-Life Annuity
$52,650
$81,000
$134,460
Joint and 50% Survivor Annuity, Assuming Both
$47,385
$72,900
$121,014
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.29 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.30
Only “basic benefits” are guaranteed. These include benefits beginning at normal retirement age
(usually 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 FY2019 was $579.31 In a study released in 2019, PBGC indicated that
more than 80% of PBGC recipients in single-employer plans trusteed by PBGC received their full
benefits.32 Among participants whose benefits were reduced, the average reduction was 24% and
89% of the reductions in value of plan benefits were in 10 plans.
Assets of a terminated plan are allocated 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 (called Section 4022(c) benefits).
Benefit Payments in the Single-Employer Insurance Program
Table 4 shows that approximately 886,000 participants received monthly payments from PBGC
in FY2019 (the most recent year for which comprehensive data on benefit payments are

29 Further information on the maximum benefit is available in 29 C.F.R. §4022.23, Computation of Maximum
Guaranteeable Benefits.
30 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. The
monthly payment in a survivor’s annuity is typically less than the amount of the single life annuity.
31 See PBGC, Pension Insurance Data Book, 2019, Table S-24, at https://www.pbgc.gov/sites/default/files/2019-
pension-data-tables.pdf. Data for the average benefit in 2019 or 2021 are not available at the time of this report.
32 PBGC studied 500 single-employer plans that were terminated between 1988 and 2012. See PBGC, PBGC’s Single-
Employer Guarantee Outcomes, May 2019, at https://www.pbgc.gov/sites/default/files/2016-single-employer-guaranty-
study.pdf.
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available).33 The average monthly payment was $534 and the median monthly payment was $279.
Approximately 41,000 participants received lump-sum payments in FY2019, and the average
amount of the lump-sum payment was $2,481.34

33 See PBGC Pension Insurance Data Book, 2019, Tables S-20, at https://www.pbgc.gov/sites/default/files/2019-
pension-data-tables.pdf.
34 See PBGC Pension Insurance Data Book, 2019, Table S-20. The data book does not provide similar information for
multiemployer plans. In the multiemployer program, PBGC provides benefits to the plans, not directly to participants.
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Table 4. PBGC Benefit Payments and Payees, FY2004-FY2019
(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)
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
2019
5,917
886
534
279
103
41
2,481
555
Source: Pension Benefit Guaranty Corporation Pension Insurance Data Book, 2019, Table S-20.
Notes: Deferred payees are participants who are owed, but not yet receiving, benefits under the plan. Data for FY2020-FY2022 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 all 12 months in a year.
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Finances of the Single-Employer Insurance Program
Figure 1 displays the net financial position of PBGC’s single-employer program from FY1980 to
FY2022. In FY1996, PBGC showed a surplus in its single-employer program for the first time in
its history. That surplus was $9.7 billion in FY2000, helped by the strong performance of the
equity markets in the mid- and late 1990s. In FY2022, PBGC’s single-employer program showed
a surplus of $36.6 billion. The improvement in the financial condition of the single-employer
program is a result of several factors, such as investment income (there had not been an
investment loss from FY2009 to FY2021) and increase in premium income (premium income
was 2.2 times greater in FY2022 compared to FY2012).35
Figure 1. Financial Position of PBGC Single-Employer Insurance Program,
FY1980-FY2022
(Billions of Dollars)

Source: CRS using data from PBGC Pension Insurance Data Books and PBGC, Annual Report 2020 and 2022
Annual Report.
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

35 See the Appendix Historical PBGC Premium Rates for the history of PBGC premium rates. See also PBGC, 2019
Data Book, Table S-2 and PBGC Annual Report 2022, p. 31.
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determines, taking into account the plan’s recent and anticipated financial experience, that the
plan’s available resources will not be sufficient to pay benefits that come due in the next plan
year.
If it appears that available resources will not support the payment of benefits at the guaranteed
level, PBGC will provide the additional resources needed as a loan, which PBGC indicates are
rarely repaid.36 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. One
multiemployer plan has repaid any of its financial assistance.37
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.38 For a participant with 30 years of service, the guaranteed limit is
$12,870.39 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, PBGC projected that only 49% of participants would receive their full benefit payment.40
Among ongoing plans, the average benefit is almost twice as large as the average benefit in
terminated plans.41 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.42
Special Financial Assistance (SFA)
PBGC administers the SFA program authorized in Section 9704 in Title IX, Subtitle H, of ARPA
(P.L. 117-2). SFA provides financial assistance to eligible financially troubled multiemployer DB
pension plans.43 Section 9704 establishes a fund within the PBGC and appropriates from the

36 See PBGC, PBGC Annual Report 2020, p. 39.
37 See PBGC, 2018 Pension Insurance Data Tables, Table M-4, at https://www.pbgc.gov/sites/default/files/
2018_pension_data_tables.pdf.
38 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.
39 This is calculated as [30 × ((100% × $11) + (75% ×$33))] = $1,072.50 per month, which is $12,870 per year.
40 See PBGC, PBGC’s Multiemployer Guarantee, March 2015.
41 Ongoing plans exclude (1) plans receiving financial assistance and (2) terminated plans expected to receive financial
assistance.
42 The 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, at
https://www.pbgc.gov/documents/2015-ME-Guarantee-Study-Final.pdf. This study was conducted prior to the SFA
program, so it is possible that some participants who were projected to receive benefit cuts are in plans that are eligible
to apply for SFA.
43 For more information on SFA, see CRS In Focus IF11765, Special Financial Assistance to Multiemployer Plans and
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general fund “such amounts as are necessary” to provide special financial assistance to eligible
multiemployer DB plans and necessary administrative and operating expenses. The amount of
special financial assistance a plan can receive is the amount needed to pay participants’ full plan
benefits through the 2051 plan year. Unlike the financial assistance that insolvent multiemployer
plans receive, plans that receive SFA do not have to repay it.
As of February 6, 2023, PBGC approved SFA applications for 65 multiemployer plans covering
approximately 680,000 participants.44 The dollar amount of SFA for these approved plans is
approximately $45.8 billion.45
Finances of the Multiemployer Insurance Program
Table 5 provides data on the number of plans that have received financial assistance and SFA and
the annual amounts of the financial assistance and SFA from FY1995 to FY2022. In FY2022, 115
multiemployer plans received financial assistance.46 Approximately 94,000 multiemployer plan
participants received financial assistance in FY2022, and approximately 46,000 participants will
receive benefits in the future because they are not yet retired and are in plans that are currently
receiving financial assistance.47
In FY2022 (the first fiscal year in which SFA was provided to plans), 29 multiemployer plans
received $7.5 billion in SFA.48
Table 5. PBGC Multiemployer Insurance Program:
Financial Assistance and Special Financial Assistance to Pension Plans, FY1995-
FY2022
Total Amount of
Total Amount of
Number of Plans
Financial
Number of Plans
Special Financial
Receiving
Assistance
Receiving Special
Assistance
Financial
(Millions of
Financial
(Millions of
Year
Assistance
Dollars)
Assistance
Dollars)
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
-
-

CRS Report R46803, Multiemployer Defined Benefit Pension Plans Potentially Eligible for Special Financial
Assistance Under the American Rescue Plan Act.
44 Information on SFA applications is available at https://www.pbgc.gov/arp-sfa/sfa-applications.
45 CBO estimated that the total amount of SFA would be $90.4 billion. See CBO, Effect of the Pension Benefit
Guaranty Corporation’s Final Rule on Special Financial Assistance, September 30, 2022, at https://www.cbo.gov/
system/files/2022-09/58540-PBGC.pdf.
46 See PBGC, PBGC Annual Report 2022, p. 32.
47 See PBGC, PBGC Annual Report 2022, p. 2.
48 See PBGC, PBGC Annual Report 2022, p. 32.
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Total Amount of
Total Amount of
Number of Plans
Financial
Number of Plans
Special Financial
Receiving
Assistance
Receiving Special
Assistance
Financial
(Millions of
Financial
(Millions of
Year
Assistance
Dollars)
Assistance
Dollars)
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
-
-
2021
109
230.0
-
-
2022
115
226.0
29
$7,526
Source: PBGC Pension Insurance Data Books and FY2022 Annual Report.
Figure 2 indicates that the financial condition of the multiemployer insurance program had been
worsening in recent years. The deficit in the multiemployer insurance program increased from
$8.3 billion in FY2013 to $42.4 billion in FY2014 and $65.1 billion 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 multiemployer pension plans in financial distress. The deficit then decreased to
$53.9 billion in FY2018, increased to $65.2 billion in FY2019, and decreased to $63.7 billion 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).49 A provision in this law 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.50

49 See PBGC, PBGC Annual Report 2020, p. 39.
50 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
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The improvement in the FY2022 financial condition is a result of the enactment of SFA in ARPA
that provides financial assistance to eligible multiemployer plans in poor financial condition.
Prior to the enactment of ARPA, many plans were expected to receive financial assistance in the
future and thus contributed to the multiemployer program’s deficit. Under the SFA provision in
ARPA, many of these plans will likely receive SFA, resulting in lower multiemployer program
liabilities.
Figure 2. Financial Position of the Multiemployer Insurance Program of the Pension
Benefit Guaranty Corporation, FY1980-FY2022
(Billions of Dollars)

Source: CRS using data from PBGC Pension Insurance Data Books, Annual Report 2020 and 2022 Annual Report.
Current Financial Status of PBGC
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 FY2022, PBGC’s assets
were $127.9 billion, PBGC liabilities were $90.3 billion, and its net financial position was a
surplus of $37.6 billion.51

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 the Department of Labor.
51 See PBGC, 2022 Annual Report, page 30, at https://www.pbgc.gov/sites/default/files/documents/pbgc-annual-report-
2022.pdf.
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PBGC’s main assets are the value of its trust fund and revolving funds.52 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.53
Table 6 provides information on the net financial position of PBGC from FY1999 through
FY2022. In FY2021, PBGC had a surplus for the first time since FY2001.
Table 6. PBGC Single and Multiemployer Insurance Programs:
Combined Net Financial Position, FY1999-FY2022
(Billions of Dollars)
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
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

52 Other assets include securities lending collateral and receivables.
53 Other liabilities include payables. PBGC’s benefit obligations are spread out over many years in the future. These
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. The 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, Multiemployer
Defined Benefit (DB) Pension Plans: A Primer.
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Single-Employer
Multiemployer
Total PBGC
Fiscal Year
Program
Program
Surplus / Deficit
2018
2.4
-53.9
-51.4
2019
8.7
-65.2
-56.5
2020
15.5
-63.7
-48.3
2021
30.9
0.5
31.4
2022
36.6
1.1
37.6
Source: PBGC Pension Insurance Data Books and PBGC, PBGC Annual Report 2022, p. 30.
Note: Total surplus / deficit might not sum due to rounding.
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 billion. 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 FY2018.54
The multiemployer program had a surplus from FY1982 through FY2002, but PBGC reported
deficits from FY2003 through FY2020. PBGC had projected that the multiemployer program
would very likely have become insolvent in FY2026 or FY2027.55 However, the enactment of
federal financial assistance to the UMWA 1974 Pension Plan in the Further Consolidated
Appropriations Act of 2020 (P.L. 116-94) and of SFA in ARPA (P.L. 117-2) staves off the
program’s insolvency.56 Both the single-employer and multiemployer programs are on the
Government Accountability Office’s (GAO’s) list of high-risk government programs.57
Future Financial Condition
In its FY2021 Projections Report,58 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. The simulations estimated an average surplus of $53.3 billion in FY2031, and
there were no scenarios over the next 10 years in which the single-employer program would
become insolvent. In previous reports, PBGC had estimated that the multiemployer program
would likely run out of money in FY2026, but, as a result of the enactment of SFA, PBGC
estimated that the program is likely to remain solvent for the next 40 years.59

54 See PBGC, PBGC Annual Report 2020, p. 28.
55 See PBGC Projections Report 2019, p. 7, at https://www.pbgc.gov/sites/default/files/fy-2019-projections-report.pdf
and PBGC 2022 Annual Report.
56 PBGC’s 2021 Projections Report notes that, largely as a result of the SFA program, the multiemployer program is
likely to remain solvent for more than 40 years. See PBGC, “PBGC Releases FY2021 Projections Report,” press
release, September 9, 2022, at https://www.pbgc.gov/news/press/releases/pr22-34.
57 More information is available at http://www.gao.gov/highrisk/pension_benefit/why_did_study.
58 The Projections Report was formerly called the Exposure Report. It is available at https://www.pbgc.gov/sites/
default/files/documents/fy-2021-projections-report.pdf.
59 To 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 (PIMS). Separate models are used for the
single-employer program (SE-PIMS) and the multiemployer program (ME-PIMS). For more discussion of PIMS, see
Jeffrey R. Brown et al., A Review of the Pension Benefit Guaranty Corporation Pension Insurance Modeling System,
Brookings Institution, September 11, 2013, at https://www.brookings.edu/wp-content/uploads/2016/06/PBGC-Review-
Brown-Elliott-Gordon-Hammond-FINAL-09112013.pdf. See PBGC Projections Report 2019, p. 1.
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PBGC and the Federal Budget
PBGC’s budgetary cash flows are based on its premium income, interest income, SFA
appropriations, benefit outlays, and the interaction of PBGC’s trust and revolving funds. The trust
fund contains the assets of the pension plans of which PBGC becomes trustee and the returns on
the trust fund investments.60 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.61 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 asset allocations that depend on the funded
status of the PBGC’s single-employer program. The share allocated to equities ranges between
40% (when the funded ratio is 95% and below) and 15% (when the funded ratio is 120% and
higher), and the share allocated to fixed income ranges between 60% (when the funded ratio is
95% and below) and 85% (when the funded ratio is 120% and higher).62 Trust fund investments
totaled $68.4 billion at the end of FY2022.63
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.64
All revolving funds are invested in Treasury securities, though only certain revolving funds are
required by law to be invested in Treasury securities.65 The revolving funds’ assets at the end of
FY2022 were $2.4 billion for Fund 1, $3.1 billion for Fund 2, and $43.4 billion for Fund 7, for a
total of $48.9 billion.66

60 For more information, see CBO, A Guide to Understanding the Pension Benefit Guaranty Corporation, September
2005, at http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/66xx/doc6657/09-23-guidetopbgc.pdf.
61 When PBGC becomes trustee of a single-employer pension plan, the plan typically has assets in it. These assets are
transferred to PBGC trust fund. PBGC does not become trustee of multiemployer plans, so it does not take any
multiemployer plan assets.
62 See PBGC, “Pension Benefit Guaranty Corporation Investment Policy Statement—April 2019,” at
https://www.pbgc.gov/sites/default/files/april-2019-ips-pbgc.pdf.
63 See PBGC, 2022 Annual Report, p. 49.
64 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 Management Needs
Better Stewardship, GAO-11-271, June 2011, at http://www.gao.gov/new.items/d11271.pdf.
65 See PBGC, PBGC Annual Report 2022, p. 49.
66 See PBGC, PBGC Annual Report 2022, p. 49.
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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
not address the financial condition of PBGC, and may discourage employers from maintaining
their DB pension plans.67
Eighth Fund for SFA
ARPA established an eighth fund within PBGC and appropriates from the general fund “such
amounts as are necessary” for 10 years to provide SFA and associated administrative and
operating expenses. This eighth fund is the first time PBGC has had an appropriated fund.68
PBGC estimated that it would provide total SFA ranging from $74 billion to $91 billion.69
Smaller Asset Managers Program
In 2015, PBGC established a pilot program to allow smaller investment firms to compete for
contracts to manage portions of PBGC investments. The Smaller Assets Managers Program
(SAMP) was designed to increase the diversity of PBGC’s investment managers.70 In June 2016,
PBGC awarded five contracts to each manage $175 million of PBGC’s fixed income portfolio.71
Of the five firms selected, one was minority-owned, two were women-owned, and one was
minority woman-owned.72 After five years, each of the five smaller asset managers generated
returns that exceeded the established benchmark.73 In 2022, PBGC’s board of directors approved
making SAMP an ongoing program.

67 See, for example, Rep. Mark Pocan, “Pocan, Renacci Introduce Bipartisan Legislation to Eliminate Budget
Gimmick,” press release, April 15, 2016, at https://pocan.house.gov/media-center/press-releases/pocan-renacci-
introduce-bipartisan-legislation-to-eliminate-budget; and Interindustry Forecasting at the University of Maryland,
Increasing. Pension. Premiums: The Impact on Jobs and Economic Growth, May 2014, at https://documents.nam.org/
Nam.org_Web_Archive/www.nam.org/Data-and-Reports/Reports/Increasing-Pension-Premiums/Increasing-Pension-
Premiums—The-Impact-on-Jobs-and-Economic-Growth-(Full-Report).pdf.
68 See PBGC, PBGC Annual Report 2022, p. 67.
69 See PBGC, PBGC Issues Final Rule on Special Financial Assistance, at https://www.pbgc.gov/news/press/releases/
pr22-28.
70 More information is available in PBGC, Review of the PBGC Smaller Asset Manager Program, at
https://www.pbgc.gov/sites/default/files/documents/pbgc-smaller-asset-managers-pilot-program-final.pdf.
71 PBGC, Review of the PBGC Smaller Asset Manager Program, p. 2.
72 PBGC, Review of the PBGC Smaller Asset Manager Program, p. 3.
73 PBGC, Review of the PBGC Smaller Asset Manager Program, p. 5.
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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
$69.00
$34.00
$1,250.00
(P.L. 114-74)e
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
2022
-
$88.00
$48
$1,250.00
2023
-
$96.00
$52
$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.
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b. The Deficit Reduction Act of 2005 (P.L. 109-171) adjusted the flat-rate premium annually for increases in
the national wage index beginning in 2007.
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 small 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 annually 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
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Pension Benefit Guaranty Corporation (PBGC): A Primer

2021
-
$31.00
2022
-
$32.00
2023
-
$35.00
Source: CRS and PBGC Premium Rates, at https://www.pbgc.gov/prac/prem/premium-rates.
Note: A provision in P.L. 117-2 increased the multiemployer premium in 2031 to $52 per participant beginning
in 2031 and are to be adjusted for increases in the national average wage index thereafter.
a. $0.50 for plan year beginning in September 1979, growing gradually to $1.00 for plan years beginning
September 1, 1980, to September 26, 1980.
b. From 2007 to 2012 and since 2016, this amount has been adjusted annually 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

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
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its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
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