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PBGC insuring fewer single-employer pension plans

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The number of single-employer pension plans insured by the Pension Benefit Guaranty Corp. continues to tumble.

In 2014, the agency insured 22,344 employer plans, a drop of more than 1,000 plans compared with the 23,399 plans it insured in 2013, the PBGC reported in its latest Data Book released Tuesday.

Last year’s drop in covered plans is the seventh consecutive year in which the agency has seen a fall in the number of employer plans it insures.

The decrease is the result of several factors, including employers drifting away from defined benefit plans, as well as organizations shutting down and folding their pension plans.

Many reasons have been cited for employer moves away from defined benefit plans, including less corporate tolerance of the risks — such as unpredictable required plan contributions due to factors such as fluctuating interest rates and investment results — that are inherent with sponsoring a defined benefit plan.

The move away from defined benefit plans has been sharpest among smaller employers. For example, in 1985, at the peak of defined benefit plan sponsorship, the PBGC insured 22,069 plans with between 25 and 99 participants. Last year, the agency insured just 3,872 plans of that size.

The number of participants in single-employer plans insured by the PBGC also has fallen, though the decline has not been as sharp as the drop in the number of insured plans.

Last year, PBGC-insured single-employer plans had 30,926,000 participants, a drop of nearly 1 million enrollees compared with 31,900,000 participants in 2013 and a decline of close to 3.6 million from 2004, when PBGC-insured plans had 34,523,000 participants.

Employers with plans insured by the PBGC this year pay a flat-rate premium of $57 per plan participant, with an additional premium — $24 per $1,000 of unfunded vested benefits — paid by employers with underfunded plans.