WASHINGTON, August 2, 2023 – The ERISA Industry Committee (ERIC) said today that the projected $63.3 billion surplus in ten years outlined in the Pension Benefit Guaranty Corporation’s (PBGC) just-released Fiscal Year 2022 Annual Projections Report should cause Congress to reexamine the premiums paid by companies that sponsor defined benefit pension plans.
“PBGC’s single-employer insurance program has been overfunded for years, yet the law provides for automatic annual premium increases, which impose expenses on retirement plan sponsors that are completely unnecessary,” said Andy Banducci, Senior Vice President for Retirement and Compensation Policy at ERIC. “Current premium levels are clearly inflated and altogether unnecessary for PBGC’s insurance program to be sustainable. Any additional increases are unwarranted and will not provide additional benefits or protections for employees.”
The “Annual Projections Report” provides ranges and estimates for the financial health of PBGC’s insurance programs ten years into the future. This year, PBGC projects a surplus of $63.6 billion by FY 2032 – an increase of more than $10 billion in the last year (in FY 2021, PBGC reported an average $53.3 billion surplus for FY 2031).
In addition to addressing premium levels, Banducci urged Congress to eliminate arcane budget scoring rules that have permitted the use of premium increases to “offset” spending proposals unrelated to the retirement system.
