The Pension Benefit Guaranty Corp.’s multiemployer pension insurance program will run out of money by the end of 2025, according to a new report from the government agency in charge of taking over troubled plans such as the Central States Pension Fund.
The program’s annual deficit will increase from $59 billion to about $80 billion in fiscal year 2026. This means it’s unlikely that the PBGC would be able to bail out nearly 100 declining multiemployer pensions covering 1.2 million Americans. The Central States fund is the single-largest critically ill plan, exposing more than 250,000 active truck drivers and retirees to either benefit cuts or elimination.
“Most of the risk of the program running out of money falls during the years 2024 to 2026,” PBGC wrote. “It is more likely than not that the Multiemployer Program will deplete its assets by the end of fiscal 2025. The risk of program insolvency grows rapidly after 2025, exceeding 99% by 2036.”
Michael Scott, executive director of the National Coordinating Committee for Multiemployer Plans, said that when the U.S. Treasury Department rejected Central States’ application to reduce benefits, it triggered “a long set of significantly more negative consequences for everyone involved at Central States [and] other multiemployer plans.”