PBGC Hails 2022 Successes, Welcomes New Advisory Committee Members

The Pension Benefit Guaranty Corporation (PBGC) in its annual report has noted positive developments that took place in the last year, and also is looking to the future with the naming of four members to its Advisory Committee. 
 

2022 Results 

In its Fiscal Year (FY) 2022 Annual Report, the PBGC reports that it made progress in a variety of areas. 

Insurance programs. “For the second year in a row, PBGC’s insurance programs are both reporting positive net financial positions,” PBGC Director Gordon Hartogensis said in a press release about the annual report. 

Assets and Liabilities

Program	Assets, End of FY 2022	Liabilities, End of FY 2022	Net Position
Single-employer program	$124.4 billion	$87.8 billion	+$36.6 billion
Multiemployer program	$3.5 billion	$2.4 billion	+$1.1 billion

 

And both the single-employer program and the multiemployer program showed continued improvement: 

Change in Net Positions

Program	FY 2021 Year End Balance	FY 2022 Year End Balance	Change, FY 2021-FY 2022
Single-employer program	+$30.9 billion	+$36.6 billion	+$5.7 billion
Multiemployer program	+$481 million	+$1.1 billion	+$577 million

 

The PBGC notes that the improvement in the Multiemployer Program is especially noteworthy. As recently as in 2019, the PBGC projected that the program would run out of money in FY 2026. Just three years later, however, it says that the Multiemployer Program is likely to remain solvent for more than 40 years. It attributes this dramatic shift to the enactment of the American Rescue Plan Act of 2021.

The PBGC also reports that in FY 2022, it provided $226 million in traditional financial assistance to 115 multiemployer plans covering 93,525 participants.

Implementation. The report says that in FY 2022, the PBGC made significant progress in implementing the Special Financial Assistance (SFA) Program. It also notes that the PBGC continued to improve the agency’s IT infrastructure, services, and cybersecurity.  

The SFA Program was established under the American Rescue Plan Act of 2021. The program provides funding assistance to severely underfunded multiemployer pension plans. The PBGC says that it is implementing the SFA Program by issuing regulations and guidance, developing internal controls to mitigate risks, and processing applications for financial assistance. 

During FY 2022, the PBGC paid $7.5 billion through the program.

“The agency remains committed to implementing the Special Financial Assistance Program and ensuring that millions of America’s workers, retirees, and their families receive the pension benefits they earned through many years of hard work,” Hartogensis said in the press release.

Advisory Committee Members Named

The PBGC has announced that four members have been named to serve on its Advisory Committee. The committee is a seven-member body appointed by the President of the United States to represent the interests of labor, employers and the public. Among its responsibilities is providing advice on investment policy and on other matters related to PBGC’s mission.

The appointments are:

Jeanmarie Grisi, who has been reappointed and will serve as the committee’s chair. She is head of global pensions at Nokia; previously, she was the U.S. chief investment officer of Alcatel-Lucent and served in a variety of retirement plan positions over 21 years. She represents the interests of employers.

Mike Jacobson, who served as administrator of the National Automatic Sprinkler Industry Funds from 1984 to 2020 and will represent the interests of the public.

Joe LoCicero, who is currently the chair of the Segal Group and, like Jacobson, will represent the interests of the public.

Kweku Obed, who is a managing director for Marquette Associates and serves on the firm’s board of directors; he will represent the interests of employers.