PENSION BENEFIT GUARANTY CORPORATION i FY 202 2 | PROJECTIONS REPORT

Th dehySecre
 

PENSION BENEFIT GUARANTY CORPORATION ii FY 202 2 | PROJECTIONS REPORT

TABLE OF CONTENTS

EXECUTIVE SUMMARY.............................................................................................................. 1

Multiemployer Program................................................................................................................... 2

Single-Employer Program ............................................................................................................... 3

About This Report ........................................................................................................................... 4

Wide Range of Possible Outcomes ...............................................................................................................5

Financial Obligations .......................................................................................................................................6

About the PIMS Models..................................................................................................................................7

MULTIEMPLOYER PROGRAM .................................................................................................. 8

Multiemployer Program Overview .................................................................................................. 8

American Rescue Plan Act of 2021................................................................................................... 9

Multiemployer Program Solvency ..................................................................................................13

Multiemployer Projections of Net Financial Position....................................................................17

Variability in Multiemployer Program Financial Position .............................................................19

New Claims......................................................................................................................................................20

Premium Income ............................................................................................................................................21

Investment Outcomes ...................................................................................................................................21

Multiemployer Reconciliation of FY 2021 Projections to FY 2022 Projections ............................. 22

Sensitivity of Changes to the Multiemployer Model ..................................................................... 24

Discount Rate..................................................................................................................................................24

SINGLE-EMPLOYER PROGRAM ............................................................................................. 25

Single-Employer Program Overview ............................................................................................. 25

Single-Employer Projections of Net Financial Position................................................................ 26

Variability in Single-Employer Financial Position........................................................................ 27

Bankruptcy and New Claims........................................................................................................................28

Premium Income ............................................................................................................................................30

Investment Outcomes ...................................................................................................................................30

Single-Employer Reconciliation of FY 2021 Projections to FY 2022 Projections...........................31

Sensitivity of Changes to Single-Employer Model’s Discount Rate ............................................. 33

Sensitivity of Changes to Single-Employer Model’s Assumed Plan De-Risking Activity............. 33

Single-Employer Stress Test Scenario........................................................................................... 34

Single-Employer Plan Universe: Projected Underfunding............................................................ 37

STATEMENT OF ACTUARIAL OPINION................................................................................41

APPENDIX ................................................................................................................................... 42

Overview of PIMS.......................................................................................................................... 42

Future Outcomes Are Expressed in Present Value Terms......................................................................42

How Projections Compare to PBGC’s Financial Statement Liabilities.................................................42

Capital Market Assumptions.........................................................................................................................43

ME-PIMS....................................................................................................................................... 45

ME-PIMS — Overview.................................................................................................................................45

ME-PIMS — Data .........................................................................................................................................46

ME-PIMS — General Methodology...........................................................................................................47

ME-PIMS — Plan Sponsor Behavior With Respect to MPRA..............................................................48

ME-PIMS — Cash Flow Development .....................................................................................................48

ME-PIMS — Assumptions...........................................................................................................................49

SE-PIMS ........................................................................................................................................ 54

SE-PIMS — Overview..................................................................................................................................54

SE-PIMS — Data...........................................................................................................................................54

SE-PIMS — General Methodology ............................................................................................................55
 

PENSION BENEFIT GUARANTY CORPORATION iii FY 202 2 | PROJECTIONS REPORT

SE-PIMS — Assumptions............................................................................................................................56

Sample Statistics from FY 2022 Runs in ME-PIMS and SE-PIMS ............................................... 62

Changes from the Prior Year ......................................................................................................... 64

FIGURES

Figure 1 – PBGC Projected Mean Net Financial Position at the End of FY 2032 ............................................................. 1

Figure 2 – Projected Change in Key Financial Results ($ billions).......................................................................................... 9

Figure 3 – SFA Application Status as of March 13, 2023 ....................................................................................................... 10

Figure 4 – Reconciliation of Changes in Total SFA Estimate ............................................................................................... 11

Figure 5 – Stochastic Range of Projected SFA Distributions................................................................................................ 12

Figure 6 – PBGC Multiemployer Fund Assets, Traditional Financial Assistance Payments, and Premiums by 

Fiscal Year ................................................................................................................................................................ 15

Figure 7 – Projected Assets of PBGC Multiemployer Program............................................................................................ 16

Figure 8 – Multiemployer Program Projected Net Financial Position ................................................................................. 18

Figure 9 – Potential FY 2032 Multiemployer Program Net Financial Position.................................................................. 19

Figure 10 – Variability in FY 2032 Multiemployer Net Financial Position ......................................................................... 20

Figure 11 – Reconciliation of Changes in Multiemployer Projection Results ...................................................................... 22

Figure 12 – Sensitivity of Net Financial Position to Discount Rate Changes Present Value at the end of FY 2022 

($ billions).................................................................................................................................................................. 24

Figure 13 – Single-Employer Program Projected Net Financial Position ........................................................................... 26

Figure 14 – Potential FY 2032 Single-Employer Program Net Financial Position............................................................ 27

Figure 15 – Variability in 2032 Single-Employer Net Financial Position ............................................................................ 28

Figure 16 – Single-Employer Program Net New Claims........................................................................................................ 29

Figure 17 – Reconciliation of Changes in Single-Employer Projection Results................................................................. 31

Figure 18 – Sensitivity to Discount Rate Changes in Single-Employer Results ................................................................. 33

Figure 19 – Sensitivity to Increases in Plan De-Risking Activity........................................................................................... 34

Figure 20 – PBGC Single-Employer Program Assets and Liabilities by Fiscal Year under Stress Testa ...................... 36

Figure 21 – Projected Changes to PBGC Claims and Premiums under Stress Test.......................................................... 37

Figure 22 – PBGC-Insured Single-Employer Plan Underfunding........................................................................................ 38

Figure 23 – PBGC-Insured Single-Employer Plan Underfunding........................................................................................ 39

Figure A-1 Arithmetic Means, Standard Deviations, and Correlations of Key Financial Market Values..................... 62

Figure A-2 Arithmetic Means and Standard Deviations of Market Rates Derived from Projected Long-Term 

Treasury Yields........................................................................................................................................................ 62

Figure A-3 FY 2022 Model Projected Plan Returns............................................................................................................... 63

Figure A-4 Projected Annual Bankruptcy Probabilitiesa........................................................................................................ 63

Figure A-5 Annual Rate of Plans’ Projected Insolvency........................................................................................................ 63

Figure A-6 Economic Assumptions Changes for FY 2022 ...............................................................................................635
 

PENSION BENEFIT GUARANTY CORPORATION iv FY 202 2 | PROJECTIONS REPORT

FREQUENTLY USED ABBREVIATIONS

ARP American Rescue Plan Act of 2021

ERISA Employee Retirement Income Security Act of 1974, as amended

FY Fiscal Year

IIJA Infrastructure Investment and Jobs Act of 2021

ME Multiemployer

MP-2021 Mortality Projection − 2021 Mortality Improvement Scale

MPRA Multiemployer Pension Reform Act of 2014

PBGC Pension Benefit Guaranty Corporation

PIMS Pension Insurance Modeling System

RP-2014 Retirement Plans − 2014 Mortality Table

SE Single-Employer

SFA Special Financial Assistance

VBL Vested Benefit Liability

VRP Variable Rate Premium
 

PENSION BENEFIT GUARANTY CORPORATION 1 FY 202 2 | PROJECTIONS REPORT

EXECUTIVE SUMMARY

The Pension Benefit Guaranty Corporation (PBGC or Corporation) insures against the loss of participants’ 

pension benefits in private-sector pension plans. PBGC operates two separate insurance programs — one for 

multiemployer defined benefit pension plans and one for single-employer defined benefit pension plans — 

that are legally separate and operationally and financially independent. The two programs provide different 

benefit guarantees and utilize different funding mechanisms. This report primarily includes 10-year 

projections, ending with FY 2032 (September 30, 2032), of the financial status of both programs under a 

range of future financial scenarios, plus additional projections beyond 10 years for the Multiemployer 

Program. 

PBGC’s Multiemployer Program is likely to remain solvent for more than 40 years, similar to the projection 

in last year’s Projections Report. More specifically, the stochastic projections show the Multiemployer 

Program remaining solvent more than 40 years out in 60 percent of projected scenarios, compared to 54 

percent in last year’s report. However, both reports show a high degree of uncertainty, with the most 

pessimistic downside scenarios continuing to show a risk of insolvency in the mid-2030s. Projections of 

Multiemployer Program solvency are highly dependent on the solvency of plans that have or will receive 

Special Financial Assistance (SFA) and the increase in the number of scenarios in which the Multiemployer 

Program remains solvent over the next 40 years is due primarily to an improvement in solvency outcomes for 

these plans. Some of these plans have or will receive larger SFA amounts than previously expected due to 

2022 asset losses but are also projected to have higher future rates of asset returns than projected in last year’s 

model.

The projected FY 2032 net financial position of the Multiemployer Program is positive in 69 percent of 

model scenarios, with a median value of positive $3.9 billion, but the mean net position is negative $7.1 

billion. The Single-Employer Program is projected to remain in a positive net financial position over the next 

decade in nearly all the modeled scenarios. 

Figure 1 summarizes the main results of this report. 

Figure 1 – PBGC Projected Mean Net Financial Position at the End of FY 2032 

Present Value at the end of FY 2022 ($ billions)

Multiemployer Program Single-Employer Program

Mean ($7.1)a $63.6b

Median $3.9 $62.5

15th to 85th Percentile ($21.2) - $4.6 $45.6 - $80.7

a) ($7.1) billion projected mean net financial position consists of $5.6 billion in assets and $12.7 billion in liabilities. While the mean of 

all scenarios shows a negative net position for FY 2032, the majority of scenarios project a positive net position for FY 2032. 

b) $63.6 billion projected mean net financial position consists of $117.5 billion in assets and $53.9 billion in liabilities. 

PBGC’s insurance programs protect participant pension benefits up to the level of PBGC’s guarantees, which 

are defined by law. However, plan-level benefits may exceed the PBGC guarantee, causing participants to lose 
 

PENSION BENEFIT GUARANTY CORPORATION 2 FY 202 2 | PROJECTIONS REPORT

a portion of their accrued benefits. It is important to note that even under scenarios where both Programs 

remain solvent indefinitely, many participants may face benefit reductions to the PBGC guaranteed level 

upon termination of an underfunded single-employer plan or the insolvency of a multiemployer plan.

MULTIEMPLOYER PROGRAM

American Rescue Plan Act of 2021 (ARP)

The SFA Program was enacted on March 11, 2021, as part of the American Rescue Plan Act of 2021 (ARP). 

The SFA Program provides funding to severely underfunded multiemployer pension plans and enables the 

plans to pay benefits, without reduction, for many years into the future. The SFA Program is funded by an 

appropriation of Treasury general revenues. Prior to the enactment of ARP, PBGC’s Multiemployer Program 

was expected to become insolvent by 2026. The SFA Program will likely keep PBGC’s Multiemployer 

Program solvent for at least 40 years.

ARP enables eligible multiemployer plans to apply to PBGC for SFA. Eligibility is limited to financially 

troubled plans based on specific criteria set by statute. An eligible plan’s SFA is the amount required for the 

plan to project to be able to pay benefits due through plan year 2051, calculated by the plan using specified 

assumptions generally defined by statute and PBGC regulations. Upon approval of an eligible plan’s 

application, PBGC pays SFA to the plan. SFA payments are not subject to repayment to PBGC. Through 

March 11, 2023, PBGC has approved $45.8 billion in SFA.

PBGC’s mean estimate of total SFA projected to be paid under ARP is $79.7 billion to be distributed to 211

plans.0F

1 Several factors could impact the number of eligible plans and the amount of SFA paid. PBGC’s 

stochastic estimates range from 184 plans receiving a total of $78.6 billion in SFA at the first percentile to 234

plans receiving a total of $81.9 billion at the 99th percentile. The mean total SFA decreased by $3.0 billion 

from the amount estimated in last year’s report, and the range between the first and 99th percentile estimates 

decreased from $34.2 billion in last year’s report to $3.3 billion in this year’s report. The decrease in total 

projected SFA and the significant decrease in the range of projected SFA is due primarily to the fact that the 

majority of eligible plans have submitted applications (whether approved or not) or have set their SFA 

measurement date (via a lock-in application), such that PBGC has additional information to use in developing 

its projections.1F

2

Projected Net Financial Position (Assets vs. Liabilities)

The Multiemployer Program projections, displayed as present values as of September 30, 2022, show a

decline in the mean net financial position (i.e., the average of all the scenarios modeled) of $8.2 billion – from 

1 Under ARP, plans have until December 31, 2025 to file an initial application and until December 31, 2026 to file a revised 

application. Plan eligibility is determined based on statutory criteria for plan status at enactment and during plan years 2020 through 

2022. 

2 The $3.3 billion range of SFA between the first and 99th percentiles captures only the variability of potential future economic 

outcomes and does not capture potential unexpected differences in plan data and assumptions used in plan applications for SFA. 

Therefore, the $3.3 billion range may be understated and the aggregate SFA amount could reasonably fall outside the $78.6 billion to 

$81.9 billion range.
 

PENSION BENEFIT GUARANTY CORPORATION 3 FY 202 2 | PROJECTIONS REPORT

positive $1.1 billion (the actual reported and audited net position on September 30, 2022) to a projected 

negative $7.1 billion on September 30, 2032.

PBGC’s Multiemployer Program generally provides financial assistance only after a plan becomes insolvent, 

but plans are booked as future claims when they are projected to become insolvent within the next 10 years 

(see Financial Obligations below). Accordingly, the projected net position as of September 30, 2032, includes 

claims for plans expected to become insolvent by September 30, 2042. The SFA Program is likely to protect

currently ongoing, solvent plans from becoming insolvent prior to September 30, 2032, so the liability for 

future claims reported in the net position as of September 30, 2022, is small. However, in unfavorable

scenarios, some currently ongoing, solvent plans are projected to become insolvent prior to September 30, 

2042, which introduces claims and decreases the projected net position as of September 30, 2032.

Projected Solvency (Ability to Pay Full Guaranteed Benefits)

PBGC’s Multiemployer Program is expected to stay solvent during the 10-year projection period ending 

September 30, 2032, because of the SFA Program. In most projection scenarios, the SFA provided to eligible 

plans delays the insolvency of those plans, and thus of PBGC’s Multiemployer Program, by more than 40 

years in the future. The most pessimistic of the 500 stochastic scenarios projects the Multiemployer Program

to go insolvent in FY 2035, while optimistic scenarios project it to remain solvent indefinitely. Sixty percent 

of scenarios result in solvency that will extend past FY 2062. This high degree of uncertainty about whether 

and when the Multiemployer Program will run out of money is driven by several variables, such as plans’ 

future asset performance, contribution income, and the actual level of future benefit payments.

Methods and Assumptions

The Multiemployer Program projections model is substantially the same as the one used last year, but reflects

new plan data and updated economic assumptions.2F

3 Additionally, the model incorporates updates to:

(1) the assumptions for plan asset allocations and returns,

(2) the contribution rate increase assumption, 

(3) the projected withdrawal liability assumption, and 

(4) the projected future rates of mortality.

Further description of these changes, along with their impact on the projection results, are detailed in the 

Multiemployer Reconciliation of FY 2021 Projections to FY 2022 Projections and in the Appendix.

SINGLE-EMPLOYER PROGRAM 

Projected Net Financial Position (Assets vs. Liabilities)

The projection shows the net financial position in the Single-Employer Program growing from $36.6 billion, 

the actual reported net financial position as of September 30, 2022, to an estimated mean of $63.6 billion on 

September 30, 2032 (on a present value basis as of September 30, 2022). The Single-Employer Program’s net 

3 New plan data includes data from SFA applications (including lock-in applications) and available funding (zone) status certification 

data for plan years 2020-2022.
 

PENSION BENEFIT GUARANTY CORPORATION 4 FY 202 2 | PROJECTIONS REPORT

position increased by $5.7 billion in FY 2022, which exceeded the mean projection in the FY 2021

Projections Report, primarily due to a decrease in liabilities resulting from rising interest rates that exceeded 

the decrease in assets due to rising interest rates and poor equity returns. Thus, the initial net position for 

these FY 2022 projections (i.e., the actual net financial position as of September 30, 2022) is higher than what

was projected in the FY 2021 report. 

As the net position of the Single-Employer Program improves, the potential for a negative net position in the 

future decreases, even in scenarios with very high projected claims. Still, existing underfunding is more acute 

in plans sponsored by companies with the highest risk of financial distress, and any downturn in the economy 

increases both underfunding and the probability of claims to PBGC. PBGC’s FY 2022 Annual Report shows 

that plans sponsored by employers with below-investment-grade credit ratings had an aggregate underfunding 

of $52.0 billion when measured using plan termination assumptions as of December 31, 2021. This is down

from the $105.4 billion in aggregate underfunding reported in the FY 2021 Annual Report as of December 

31, 2020. This Projections Report includes a new 10-year stochastic projection of total underfunding of 

PBGC-insured single-employer plans (see Figure 22 and Figure 23).

This year’s report also includes additional stochastic modeling to show an illustrative stress test scenario in 

which a significant market downturn is coupled with a level of claims that resembles the highest period of 

claims ever experienced in the Single-Employer Program. In this hypothetical scenario, the Single-Employer 

Program nearly falls into deficit due to the initial period of high claims but gradually regains a strong positive

net position.

Methods and Assumptions

The Single-Employer Program projections model is substantially the same as the one used last year, but

reflects new plan data and updated economic assumptions. Additionally, the model incorporates:

(1) certain retirement provisions included in Division T of the Consolidated Appropriations Act, 2023, 

which was passed on December 29, 2022 (referred to in this report as “SECURE 2.0”),3F

4

(2) a new assumption for bulk annuity purchases that are not part of a standard termination, and

(3) an updated mortality table for determining PBGC liabilities.

Further description of these changes, along with their impact on the projection results, are detailed in the

Single-Employer Reconciliation of FY 2021 Projections to FY 2022 Projections and in the Appendix.

ABOUT THIS REPORT

PBGC’s annual Projections Report is required by section 4008 of the Employee Retirement Income Security 

Act, as amended (ERISA) to be an “actuarial evaluation of the expected operations and status of [PBGC’s] 

funds.” The purpose of the report is to provide an actuarial evaluation of the future financial status of 

PBGC’s Multiemployer and Single-Employer Programs. It does so by projecting solvency (ability to make 

required payments) and net financial position (balance sheet assets minus liabilities) for the two programs in a 

4 The retirement provisions include Sec. 335 “Corrections of Mortality Tables” and Sec. 349 “Termination of Variable Rate Premium 

Indexing” under Division T.
 

PENSION BENEFIT GUARANTY CORPORATION 5 FY 202 2 | PROJECTIONS REPORT

variety of simulated future conditions. Projected net financial position is determined on a present value basis

as of September 30, 2022. A negative net position does not imply a projected insolvency. 

The results in this report were developed based on PBGC and plan data available on or before September 30, 

2022, economic data as of December 31, 2022, and SFA application activity through March 13, 2023.4F

5 The 

projections start with PBGC’s FY 2022 Annual Report and forecast results under a range of future economic 

scenarios.5F

6 The projections reflect current law, including the effects of ARP, the Infrastructure Investment 

and Jobs Act (IIJA), and SECURE 2.0, and assume no future changes in the law. 

SFA is funded by appropriations of general revenues through periodic transfers from the Treasury 

Department. This report provides estimates for the aggregate amount of SFA to be distributed by PBGC but 

does not show SFA outlays on an annual basis. The timing of PBGC SFA payments to eligible plans depends 

on the timing of plans’ SFA applications and PBGC approvals.

PBGC uses two stochastic models to develop the projections in this report: the Multiemployer Pension

Insurance Modeling System (ME-PIMS) and the Single-Employer Pension Insurance Modeling System (SEPIMS). Both systems use probabilistic distributions of investment returns, interest rates, and other variables 

to estimate a range of possible future outcomes. This report uses averages and ranges to summarize the

results of the stochastic simulations.

The projections shown are estimates, not predictions. They reflect a reasonable range of values that result 

from assumptions about many factors including:

• Inflation and wage growth. 

• Interest rates (e.g., 30-Year Treasury yields, corporate bond yields). 

• Equity returns. 

• Plan sponsor decisions about contributions. 

• Multiemployer plan applications under the SFA Program. 

In addition, many aspects of the individual plans and the complex rules that govern the private employmentbased pension system in the United States are simplified or disregarded to create a working model. The 

actual results that ultimately occur in future years will vary, potentially significantly, from the mean 

projections in this report.

Wide Range of Possible Outcomes 

To illustrate the uncertainty of future outcomes, this report shows a range of results associated with a given 

set of assumptions. These include the mean (i.e., average) and median (i.e., middle) values, as well as 

percentile results along the distribution of outcomes. To demonstrate potential variation, the 85th percentile 

5 The use of economic data as of December 31st following the measurement date improves the model’s projection of single-employer 

variable rate premium revenue in the following year because most plans’ variable rate premium requirements are based on funding 

levels as of January 1st. 

6 The financial statements in the FY 2022 Annual Report were prepared in conformity with accounting principles generally accepted 

in the United States of America (U.S. GAAP) and utilize data and assumptions available as of September 30, 2022 (the end of FY 

2022).
 

PENSION BENEFIT GUARANTY CORPORATION 6 FY 202 2 | PROJECTIONS REPORT

(15 percent of the outcomes are higher [more favorable]), the median value (50th percentile), and the 15th

percentile (15 percent of outcomes are lower [less favorable]) are shown. During a period of 10 or more 

years, it is likely that results will at times fall outside this 15th – 85th percentile range. The report also shows 

results for the 1st and 99th percentiles to provide a sense of the broad range of potential outcomes.

Financial Obligations 

The report presents two types of financial measures: 

• Liabilities – the present value of the projected guaranteed retirement benefits provided by PBGC for 

the lifetime of participants and their beneficiaries. PBGC’s liabilities are compared to its assets to 

determine a net position.

• Cash flows – the benefit payments or financial assistance payments (traditional and special) expected 

to be disbursed by PBGC during each year of the projection period. Cash flows provide the basis for 

examining PBGC solvency.6F

7

Claims are newly recorded liabilities reduced by any associated plan assets and cash recoveries from plan 

sponsors for a plan that PBGC takes over.7F

8 Claims are recorded when the payment of guaranteed benefit 

amounts is deemed “probable”.8F

9 Claims occur only when a plan does not have enough assets to pay benefits, 

up to the level guaranteed by PBGC. PBGC’s liabilities include amounts for claims where PBGC is already 

providing assistance and estimated amounts for probable claims yet to be incurred.

The insurable event giving rise to a claim and the coverage provided is different for the Single-Employer 

Program and the Multiemployer Program.

• Single-Employer Program – The insurable event is termination of an underfunded plan, generally

where the sponsor is in financial distress (e.g., bankruptcy of a company that sponsors a plan without 

enough assets to cover all future benefits up to the level guaranteed by PBGC).9F

10

• Multiemployer Program – The insurable event is plan insolvency, typically the drawdown of all assets 

in the plan such that there is not enough money to pay full benefits for the next year. For accounting 

purposes, multiemployer claims are booked as probable losses when a plan is projected to be within 

10 years of insolvency.

Discussions of PBGC’s net position reflect a comparison of liabilities to assets as of a certain date. The PIMS 

models estimate liabilities and assets on PBGC’s books in the future in different economic scenarios. 

“Benefit payments” in the Single-Employer Program and “financial assistance” in the Multiemployer Program

mean the amount PBGC is projected to pay to participants or a multiemployer plan during that year, 

respectively, regardless of when a plan failed. The solvency projection of each PBGC program is based on the 

sufficiency of assets, investment returns, and premiums to meet PBGC’s benefit payment/financial assistance

7 Traditional financial assistance is paid to plans that run out of money in order to pay guaranteed benefits under ERISA section 4261. 

SFA is paid to eligible ongoing plans under ERISA section 4262.

8 Asset recoveries are only made in single-employer claims events and are not applicable for the Multiemployer Program.

9 Based on the definition under ASC 450 “Contingencies.”

10 Terminations that result in claims on the Single-Employer Program can be a “distress” termination initiated by the plan 

administrator when the plan sponsor and its controlled group meet certain conditions of financial distress or, alternatively, an 

“involuntary” termination initiated by PBGC.
 

PENSION BENEFIT GUARANTY CORPORATION 7 FY 202 2 | PROJECTIONS REPORT

obligations and expenses for a particular year. This report uses the term “insolvent” to mean lacking the 

funds to pay benefits/assistance and expenses for a year. PBGC can have a negative net position but still not 

be insolvent by this definition.

About the PIMS Models 

The PIMS models are unique and complex. They were designed specifically for estimating the information in 

this report and other related analyses. The models are regularly revised to reflect changing laws, changes in 

anticipated plan sponsor behavior, and changes in other actuarial assumptions. 

While both ME-PIMS and SE-PIMS simulate some demographic and economic factors at least 20 years into 

the future, they do not model all longer-term sources of uncertainty affecting the pension system.10F

11

The estimated Multiemployer Program deficits and financial assistance shown in this report assume that 

PBGC will provide financial assistance in accordance with the current level of guaranteed benefits. This 

evaluation assumes no changes in current law with respect to guaranteed benefit levels after September 30, 

2022, for both multiemployer plans and single-employer plans.

11 For more information on PIMS, including links to user publications and peer review papers, see the PIMS web page 

https://www.pbgc.gov/about/projections-report/pension-insurance-modeling-system
 

PENSION BENEFIT GUARANTY CORPORATION 8 FY 202 2 | PROJECTIONS REPORT

MULTIEMPLOYER PROGRAM

MULTIEMPLOYER PROGRAM OVERVIEW

Multiemployer pension plans are maintained pursuant to one or more collective bargaining agreements 

between at least one labor organization and more than one employer that are generally in the same industry or 

members of a trade association. PBGC’s Multiemployer Program covers approximately 11.2 million 

participants in about 1,360 plans. 

The Multiemployer Program is legally distinct from, and operates differently than, PBGC’s Single-Employer 

Program. When a multiemployer plan becomes insolvent, which occurs when a plan has insufficient funds to 

pay full benefits, PBGC does not take over the administration of the plan. Rather, PBGC provides traditional

financial assistance directly to the plan to cover participants’ guaranteed benefits and plan administrative

expenses. This financial assistance is provided as loans to plans.

By statute, the features and obligations of the Multiemployer Program and the Single-Employer Program are 

separate and distinct. For instance, multiemployer plans’ PBGC premium rates are lower than those for 

single-employer plans and are based solely on participant count. The amount and structure of the PBGC 

benefit guarantees provided under each program also differ significantly, and the guaranteed benefit amount 

is generally much lower for multiemployer plans. Further, Multiemployer Program assets are separate from 

Single-Employer Program assets, and assets from one program cannot be used to fund obligations of the 

other program.

In the decade following the financial crisis of 2008, a sizable segment of multiemployer plans faced near-term 

insolvency due to severe underfunding. ARP, enacted in March 2021, provides significant monetary relief to 

the most financially distressed multiemployer plans, thereby extending the projected solvency of these plans.

This improves the financial status of the Multiemployer Program.

Figure 2 shows a minor improvement in the projected FY 2032 financial condition of the Multiemployer 

Program from FY 2021 to FY 2022. The updates made to the FY 2022 ME-PIMS model reflect significant 

changes in data, assumptions, and economic conditions, which are described in greater detail below. 

However, because these updates largely offset one another, there is only a modest net impact on the 

projected net position and solvency outcomes.
 

PENSION BENEFIT GUARANTY CORPORATION 9 FY 202 2 | PROJECTIONS REPORT

Figure 2 – Projected Change in Key Financial Results ($ billions)

FY 2021 

Projections

FY 2022 

Projections

Expected FY 2032 Mean Net Financial Position –

present value at the end of FY 2022 ($7.3)a ($7.1)

Median Projected Year of PBGC Insolvency After 2062b After 2062b

Mean Projected Total SFA Outlays $82.7 $79.7c

a) The expected FY 2032 mean net financial position based on the FY 2021 projections calculated in the ME-PIMS model (used in 

the FY 2021 Projections Report), with the FY 2031 mean net financial position adjusted to reflect the passage of time. This is 

shown in Figure 11 of this report.

b) The median projected year of PBGC insolvency, based on both FY 2021 and FY 2022 projections, is outside ME-PIMS model’s 

40-year projection period.

c) The $79.7 billion mean projected SFA includes $70.0 billion in approved or requested SFA based on application activity through 

March 13, 2023. The remaining $9.7 billion is estimated using the ME-PIMS model. 

AMERICAN RESCUE PLAN ACT OF 2021

ARP established section 4262 of ERISA under which SFA is provided to eligible multiemployer plans.11F

12, 12F13

Eligible plans can apply to PBGC for SFA in the amount required for the plan to pay all benefits due through 

the end of the last plan year ending in 2051, based on a deterministic projection subject to certain prescribed 

assumptions and methods.13F

14 For plans that adopted a benefit suspension under MPRA (ERISA section 

305(e)(9)), or for eligible insolvent plans that suspended benefits (under ERISA section 4245(a)), the SFA 

includes make-up payments of suspended benefits for participants and beneficiaries who are in pay status at 

the time SFA is paid, and suspended benefits must be reinstated for all participants as of the effective date of 

the SFA payment. For eligible insolvent plans, the SFA also includes the amount needed to repay the loan 

from PBGC for the traditional financial assistance paid during the period of the plan’s insolvency. 

Plans that receive SFA continue to be covered under PBGC’s Multiemployer Program, subject to the rules 

and the benefit guarantee for insolvent multiemployer plans. The receipt of SFA does not impact a plan’s 

ability to apply for traditional financial assistance payments under section 4261 of ERISA if the plan becomes 

insolvent in the future. By receiving SFA, these plans agree to abide by certain restrictions and conditions 

required by statute and PBGC’s SFA regulation.

Under section 4262.10 of PBGC’s SFA regulation, specified groups of plans were granted temporary priority 

status through March 11, 2023, to file an SFA application. The regulation designates priority group status 

based on either a plan’s projected insolvency date, whether any benefit suspensions had already been enacted, 

or the size of the plan. All other plans eligible for SFA that do not meet the criteria for any priority groups 

12 ARP includes additional provisions described in sections 9701 through 9703 that provide multiemployer plans with temporary 

funding relief. These provisions are expected to have minimal impact on PBGC’s projection results and were not modeled in MEPIMS for purposes of this report. 

13 Eligibility for SFA is limited by law to certain financially distressed multiemployer plans; refer to ERISA section 4262(b) and section 

4262.3 of the SFA regulation for more information. 

14 For plans that adopted a benefit suspension under MPRA (ERISA section 305(e)(9)), the SFA determination is subject to additional 

calculation procedures under section 4262.4(a)(2) of the SFA regulation. 
 

PENSION BENEFIT GUARANTY CORPORATION 10 FY 202 2 | PROJECTIONS REPORT

were first allowed to apply for SFA beginning March 13, 2023 (first business day after the priority group 

application window closed), subject to PBGC’s available capacity to review new applications. Because PBGC 

has limited capacity to review applications, an SFA Waiting List was formed on March 13, 2023, to establish 

an order of review for non-priority group plans (including priority group plans that did not file for SFA 

before expiration of their priority group status on March 11, 2023). Ninety-nine plans applied for SFA and 

went on the list on the first day.

For purposes of the projections summarized in this report, the FY 2022 ME-PIMS model uses the latest SFA 

amounts approved or requested in SFA applications as of March 11, 2023. As of that date, approximately 

$45.8 billion in total SFA has been approved for 41 eligible plans.14F

15 This amount includes $35.8 billion 

approved and paid to the Central States Teamsters Plan on January 12, 2023. Additionally, as of March 11, 

2023, there were 44 applications under review by PBGC, requesting a total of approximately $23.1 billion in 

SFA. Figure 3 below provides a summary of application activity through March 11, 2023, and includes the 

number of plans that requested to join the SFA Waiting List on March 13, 2023. 

Figure 3 – SFA Application Status as of March 13, 2023

Approved Under 

Review

SFA Waiting 

List

Number of Applications 69 44 N/A

Number of Plansa 41 37 99

Aggregate SFA Amountb

(approved or requested) 

$45.8 

billion

$23.1 

billion N/A

Aggregate Participant Counta 553,067 865,343 N/A

a) The number of plans and the aggregate participant count shown exclude supplemented applications. This explains why the 

number of plans shown is less than the number of applications shown.

b) The amount of SFA for approved plans shows the amount paid, including traditional financial assistance loan repayments and 

interest to the payment date. The amount of SFA for plans under review shows the amount requested, which excludes any 

applicable loan repayments and interest to the payment date.

As noted above, for purposes of the projections summarized in this report, the FY 2022 ME-PIMS model 

uses the latest SFA amounts approved or requested in SFA applications as of March 11, 2023, and does not 

vary these amounts stochastically. The SFA amounts requested for applications under review at this time are 

subject to change should these applications be subsequently withdrawn or denied, but the requested amount 

is likely to be closer to the final approved amount than an SFA amount otherwise estimated by PBGC. 

The FY 2022 ME-PIMS model calculates estimated SFA amounts for plans expected to be eligible for SFA 

that have not yet applied as of March 11, 2023. Although these estimated SFA amounts can vary by stochastic 

15 Includes interest to the SFA payment date and repayments of section 4261 financial assistance loans to PBGC, as well as amounts 

approved under 28 supplemented applications. (Supplemented applications are described in section 4262.4(g)(6) and (8) of PBGC’s

SFA regulation). 
 

PENSION BENEFIT GUARANTY CORPORATION 11 FY 202 2 | PROJECTIONS REPORT

trial, the model does not vary a plan’s starting asset value or interest rates if the plan submitted a lock-in 

application on March 13, 2023.

PBGC now estimates the total amount of SFA to be paid out under the program to be approximately $79.7 

billion. This is a decrease of $3.0 billion from the $82.7 billion estimated in last year’s report. Figure 4

provides a detailed reconciliation of the changes from FY 2021 to FY 2022 in the estimate of total SFA 

payable to eligible multiemployer plans. 

Figure 4 – Reconciliation of Changes in Total SFA Estimate

Nominal Cost of SFA Payable to Eligible Multiemployer Plans ($ billions)

1. Mean Total SFA from FY 2021 Projections Report $82.7

2. Changes

a) New Plan Data (including from SFA applications) (2.5)

b) New Economic Data (including Economic Assumption Changes) 2.6

c) Model Improvements 0.1

d) Other Assumption Changes (3.2)

e) Total Changes [(2a)+(2b)+(2c)+(2d)] ($3.0)

3. Mean Total SFA [(1) + (2e)] $79.7

Note: The order of changes impacts the magnitude of each individual change but not the sum of all changes.

Explanations of the changes in the total SFA shown in Figure 4 are:

• New Plan Data – The FY 2022 ME-PIMS model reflects new plan data available from 2020 Form 

5500 filings.15F

16 The model also includes SFA amounts (either approved or requested16F17) for plans that 

submitted SFA applications as of March 11, 2023, and reflects lock-in applications submitted on

March 13, 2023. Additionally, the model now reflects zone status certification data through plan year 

2022, which allows for improved projections of SFA eligibility. The combined effect of the new data 

is a decrease in the mean SFA of $2.5 billion. 

• New Economic Data (Including Economic Assumption Changes) – The determination of SFA is highly 

sensitive to existing plan asset values and interest rates as of the SFA measurement date. Due to 

unfavorable asset returns from December 31, 2021, through December 31, 2022,17F

18 plans that apply 

after 2022 are projected to have a lower level of plan assets as of year-end 2022 compared to last 

year’s projections. This is partially offset by the increase in the SFA and non-SFA interest rates used 

to determine the SFA amount. A large portion of these economic impacts on SFA is included within 

16 Due to the potential distorting impact of the COVID-19 pandemic on 2020 contributions, the FY 2022 ME-PIMS model projects 

future plan contribution income based on 2019 per capita contribution levels.

17 For applications not approved as of March 11, 2023, the most recently available requested SFA amount (under review or 

withdrawn) was used, with interest to the estimated payment date and repayment of section 4261 financial assistance loans to PBGC. 

18 The S&P 500 index returned -19.64% during calendar year 2022 and the interest rate caps for the SFA and non-SFA interest rates 

increased by 85 and 55 basis points, respectively. 
 

PENSION BENEFIT GUARANTY CORPORATION 12 FY 202 2 | PROJECTIONS REPORT

the “New Plan Data” row based on the amounts requested in SFA applications submitted to PBGC. 

This increased mean total SFA by $2.6 billion.

• Model Improvements – Due to the sensitivity of SFA estimates to changes in existing plan asset values, 

the ME-PIMS model was updated to improve the projection of assets from the amount reported in 

the Form 5500 Schedule H data to the earlier of 2023 and the assumed SFA measurement date using 

plan-specific asset allocation data from the Form 5500 Schedule R data. In many cases, this resulted 

in lower existing plan asset values that increase the SFA calculation. Additionally, various minor 

programming refinements were made to the ME-PIMS model in conjunction with this report. The 

combined effect of these updates increased the mean total SFA by $0.1 billion. 

• Other Assumption Changes – Various assumption changes were reflected in the ME-PIMS model that 

impacted SFA estimates. These modifications include updates to (1) the asset allocations and return 

assumptions for multiemployer plans used to project future asset returns beginning in 2023, (2) 

contribution rate increase assumptions, (3) projected withdrawal liability payment assumptions, and 

(4) the mortality table and improvement scale for determining plan cash flows. Reflecting these 

changes decreased the mean total SFA by $3.2 billion. 

For plans that have not already applied for SFA, ME-PIMS models plan eligibility and estimates SFA 

amounts in 500 stochastic scenarios.18F

19 The SFA projections included in this report reflect newly available 

zone status certification data for all multiemployer plans through the 2022 plan year that narrow the estimated 

range of plans expected to be eligible for SFA.19F

20 Although certain plans are already expected to be eligible for 

SFA based on existing plan certifications, additional plans could be identified as eligible as more information 

becomes available to PBGC. Figure 5 summarizes the updated stochastic range of projected SFA 

distributions. 

Figure 5 – Stochastic Range of Projected SFA Distributions

(Stochastic variations based on economic assumptions only) 

Estimated Number

of Plansa

Estimated Total SFA

($ billions)b, c

99th Percentile 234 $81.9

85th Percentile 225 $80.6

Mean 211 $79.7

50th Percentile (Median) 211 $79.5

15th Percentile 195 $78.9

1st Percentile 184 $78.6

19 SFA amounts for each eligible plan are estimated stochastically with the exception of plans that have submitted an application as of

March 11, 2023. For eligible plans that have submitted an application to PBGC, the amount requested in the latest application (either

approved or under review) is used.

20 The plan data in ME-PIMS for this report is primarily based on 2020 Form 5500 filings, but now includes zone status certification 

data from 2020-2022. Eligibility for SFA is projected for each individual plan through 2022 based on the zone status data as well as

model assumptions pertaining to funded status and demographic changes. 
 

PENSION BENEFIT GUARANTY CORPORATION 13 FY 202 2 | PROJECTIONS REPORT

a) The estimated number of plans excludes plans that may be eligible for SFA but do not require additional funds 

to be able to pay all benefits and expenses through 2051.

b) The estimated SFA includes $70.0 billion attributable to applications submitted to PBGC as of March 11, 2023

(including withdrawn applications), which includes estimated interest and financial assistance loan repayments,

that does not vary by scenario. The stochastic variation shown is for non-priority group plans only and ranges 

from $8.6 billion at the 1st percentile to $11.9 billion at the 99th percentile.

c) The range of results only captures the variability of potential economic outcomes and does not capture 

unexpected differences in plan data and assumptions used in plan applications for SFA.

The range of outcomes from the 1st percentile to the 99th percentile has decreased significantly from last 

year’s projection, which reported a range from $66.2 billion to $100.4 billion payable to between 140 and 234

plans. This is primarily because the updated projections include the latest amounts requested by plans in SFA 

applications submitted to PBGC, which do not vary stochastically in the FY 2022 ME-PIMS model. The 

$70.0 billion in SFA that was either approved, under review, or withdrawn as of March 11, 2023, amounts to

over 85 percent of the $79.7 billion in projected mean SFA, which leaves a much smaller amount of SFA that 

is subject to stochastic variation in the model.20F

21

It is important to note that the stochastic range of SFA in Figure 5 only captures the variability of potential 

economic outcomes and does not capture unexpected differences in plan data and assumptions used in plan 

applications for SFA. This means that the ME-PIMS model does not capture the full range of uncertainty in 

the aggregate SFA projection. Therefore, the aggregate SFA amount remains uncertain and could reasonably 

fall outside the $78.6 billion to $81.9 billion range, primarily due to the following:

• ME-PIMS generally relies on publicly available plan-level information that is typically 2-3 years old as 

of the date of the report and does not include sufficiently detailed information about demographic 

data, expected plan benefit payments, and expected contribution income for direct use in the model.

• Plan sponsors and actuaries can change certain assumptions (other than the interest rate) for 

purposes of determining SFA if any previous assumptions are no longer reasonable.

• Plan experience through the SFA application date will impact the amount of SFA that is requested.

• Some plans may need to submit a revised application with an updated SFA amount.

• Eligibility for SFA must be demonstrated by each plan, so the total group of eligible plans is not 

known with certainty.

MULTIEMPLOYER PROGRAM SOLVENCY

ARP will delay and may potentially avert the insolvency of PBGC’s Multiemployer Program. Similar to last

year’s report, the current ME-PIMS model projects that the Multiemployer Program will remain solvent at 

least through 2062, the end of the ME-PIMS 40-year projection period, in more than half of the scenarios. 

However, if plan experience is unfavorable relative to the assumptions used, plans may become insolvent 

earlier than expected and, in turn, accelerate the insolvency of the Multiemployer Program. While the focus of 

this report is a 10-year projection, a 40-year PBGC solvency analysis is included to show the range of 

potential longer-term solvency scenarios. 

21 The $70.0 billion includes estimated interest to the assumed payment date as well as traditional financial assistance loan repayments.
 

PENSION BENEFIT GUARANTY CORPORATION 14 FY 202 2 | PROJECTIONS REPORT

An illustration of PBGC’s multiemployer fund balance provides insight into the factors that influence the 

Multiemployer Program solvency projection. Figure 6 compares PBGC’s Multiemployer Program assets as 

of the end of each fiscal year to the projected premium income and projected average traditional financial 

assistance payments for each fiscal year.21F

22 The mean projected annual premium income exceeds the mean 

projected annual traditional financial assistance payments each year until FY 2040, at which time the mean 

value of PBGC’s projected multiemployer fund balance begins to decrease sharply as plans begin to go 

insolvent and start drawing traditional financial assistance from PBGC’s Multiemployer Program. Between 

one-fifth to one-third of this mean annual projected traditional financial assistance is expected to be provided 

to plans that previously received SFA. The mean projected asset balance is shown in green and the bars 

illustrating the mean annual traditional financial assistance payments include both favorable scenarios in

which plans remain solvent and unfavorable scenarios in which plans begin receiving financial assistance

earlier than expected.

As illustrated in Figure 6, there is a wide range in the projected estimates of the solvency of the 

Multiemployer Program. The mean asset value drops to zero in FY 2058, which is a 3-year improvement over 

last year’s mean projection of FY 2055. Similar to last year’s report, this year’s median projection results in the 

Multiemployer Program remaining solvent beyond FY 2062, the end of the 40-year projection period. The 

higher traditional financial assistance payments in the worst scenarios have a larger influence on the mean 

result because they are large enough to deplete the modest level of PBGC reserve assets, even when averaged 

with the smaller traditional financial assistance payments from the favorable scenarios. In the median 

projection, the acceleration of PBGC traditional financial assistance payments begins at a later point than in

the mean results.

The primary driver of the improvement in the projected solvency of the Multiemployer Program is the 

significant increase in expected future plan asset returns due to the sharp rise in interest rates during the 2022 

calendar year. The rise in interest rates, in conjunction with poor equity returns, contributed to large plan 

asset losses during 2022. Plans ineligible for SFA were significantly impacted by these losses, but most plans 

that receive SFA recover these losses as part of the SFA calculation. On a going forward basis, the higher 

interest rates are expected to generate higher yields and equity returns that would bolster future asset 

performance for all plans. For SFA plans, these higher returns exceed the level of the interest rate increase 

used in the development of the SFA amount, which improves plan solvency outcomes.22F

23 Overall, the 

updated model projects an improvement in plan solvency outcomes that in turn extends PBGC’s solvency.

22 Assets are shown as of a point in time – the end of the fiscal year – and compared with the cash flow generated due to premiums 

and financial assistance for that following year. Items of lesser significance, including investment income and administrative expenses, 

are not shown. PBGC’s actual and projected outlays for SFA are reflected in the projected timing of individual plan insolvencies but 

are not illustrated in Figure 6, which shows a projection of assets and cash flows of PBGC’s traditional insurance program for 

multiemployer plans. 

23 The higher interest rates have a greater impact on projected future asset returns used in the plan’s solvency projection after the 

receipt of SFA than on the interest rates used in the SFA calculation, which are averaged over 24 months. Other factors that lowered 

SFA amounts from last year’s projections, such as new data from applications submitted to PBGC, have a lesser impact on the 

model’s plan solvency outcomes. This is because with new data, the adverse impact on a plan’s projected solvency due to a lower SFA 

amount is largely offset by the favorable impact on the plan’s projected solvency due to the updated projected cash flows that resulted 

in the lower SFA amount.
 

PENSION BENEFIT GUARANTY CORPORATION 15 FY 202 2 | PROJECTIONS REPORT

Figure 6 – PBGC Multiemployer Fund Assets, Traditional Financial Assistance Payments,

and Premiums by Fiscal Year

Figure 6 shows PBGC’s multiemployer fund balance at three levels of certainty. In the 25th percentile results, 

PBGC’s multiemployer fund balance is projected to be depleted in FY 2050. In the 50th and 75th percentile 

results, PBGC’s multiemployer fund balance is projected to remain solvent beyond FY 2062. Figure 6 also 

shows that the projected annual traditional financial assistance payments are slightly lower than those shown 

in last year’s report, and that more of these payments are expected to be paid to plans that do not receive 

SFA. This shift is largely attributed to the lower funded level of these plans due to 2022 investment losses 

that are not recovered through SFA. The 2022 investment losses are not expected to significantly increase the 

number of plans eligible for SFA because the eligibility criteria must be satisfied during plan years 2020 to 

2022.

The projected solvency of the Multiemployer Program over this extended period is highly uncertain 

and subject to variable outcomes. The median solvency projection period for Multiemployer Program 

assets is over 40 years and is subject to a wide range experience over that long period of time. Figure 7

illustrates the wide distribution and variability of these outcomes.23F

24

24 PBGC assets shown in Figure 6 and Figure 7 exclude the SFA Program funds, given their pass-through structure.

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

$22

$24

$26

2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056 2058 2060 2062

Billons of Dollars

(Results in Nominal Dollars)

Assets at End of Year (Mean) Regular Financial Assistance (Non SFA Plans)

Regular Financial Assistance (SFA Plans) Premiums

Assets at End of Year (25th Percentile) Assets at End of Year (50th Percentile)

Assets at End of Year (75th Percentile)
 

PENSION BENEFIT GUARANTY CORPORATION 16 FY 202 2 | PROJECTIONS REPORT

Figure 7 – Projected Assets of PBGC Multiemployer Program 

(Mean and percentile scenarios)

At the 1st percentile, Multiemployer Program assets are depleted during FY 2037, the same year projected in

last year’s report.24F

25 In these scenarios, there are unfavorable investment returns in the years closely following 

SFA payments. In these scenarios, asset returns underperform compared to the deterministic projections

included in the SFA applications, resulting in plan insolvency before 2051. While plan assets incurred large 

investment losses in 2022, many plans that have already been approved for SFA submitted SFA applications 

with measurement dates after the downturn so that these investment losses were recovered in the SFA 

calculations. As a result, the worst-case scenarios in this report are similar to last year’s report.

In most scenarios, the Multiemployer Program remains solvent beyond FY 2062. Under these scenarios, 

financial markets avoid unfavorable investment returns in the decade following SFA payments, allowing these 

plans to remain solvent past 2051. These scenarios also often include periods of higher premium revenues, 

which are indexed to wage growth, and low claims.25F

26

Although investment returns play a significant role in driving the wide range of stochastic outcomes, 

additional factors contribute to the uncertainty of the Multiemployer Program’s solvency. One such factor is 

the level of future employer contributions to ongoing plans, which is driven by both increases to contribution 

rates and changes in the units of work that are the basis of contributions (e.g., hours or shifts of work

performed). Changes to plan demographics, future benefit accruals, and liability gains/losses also play an 

important role.

25 In the worst scenario out of 500 scenarios, PBGC is projected to run out of money during FY 2035.

26 ME-PIMS does not assume that plans implement any benefit increases for past service.

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 2051 2053 2055 2057 2059 2061

Billions of Dollars

PBGC Multiemployer Program assets as of the end of each fiscal year

Projected mean 99th - 85th 85th - 50th

50th - 15th 15th - 1st Actual (historical dollars)
 

PENSION BENEFIT GUARANTY CORPORATION 17 FY 202 2 | PROJECTIONS REPORT

MULTIEMPLOYER PROJECTIONS OF NET FINANCIAL POSITION 

The new projections show a moderate decline in the Multiemployer Program’s mean net financial position at 

the end of the projection period, from negative $5.1 billion at the end of FY 2031 in last year’s report to 

negative $7.1 billion at the end of FY 2032 in this year’s report. 

Last year’s report projected that the mean net position would gradually decline from positive $481 million as 

of September 30, 2021, to an estimated negative $5.1 billion at the end of FY 2031. The Multiemployer 

Program’s actual FY 2022 net position improved to positive $1.1 billion as of September 30, 2022. This year’s 

projection shows a gradual decline in the mean net position over the next 10 years to negative $7.1 billion. 

Figure 8 shows the actual net position for the Multiemployer Program for FY 2013 through FY 2022, and 

selected ranges of projected net positions for the following 10 years. Although the mean projected net 

position as of FY 2032 is negative, most projection scenarios show a modest positive net position. The mean

net position is lower than the median because the range of projected outcomes is unevenly distributed. The 

magnitude of potential deficits in the worst scenarios is significantly greater than the magnitude of potential 

positive net positions in the most favorable scenarios. Under the worst scenarios, severe market losses 

accelerate potential insolvencies for plans that receive SFA as well as for plans that do not receive SFA. Such 

market losses lead to a high level of new PBGC claims and a substantial negative net position. The potential 

for financial upside is much more limited. In favorable scenarios, PBGC is generally not expected to incur 

any new claims by the end of FY 2032. However, the low level of premiums paid by multiemployer plans do 

not significantly improve the Multiemployer Program’s net position.

As in the past, these projections assume that PBGC maintains its financial assistance at current benefit 

guarantee levels. The projected net position is the present value of future financial assistance, less assets, plus 

any unfunded amounts for prior years carried forward with interest. The adjustment for unfunded liabilities 

reflects the current schedule of guarantees and financial assistance in years prior to the projection date.
 

PENSION BENEFIT GUARANTY CORPORATION 18 FY 202 2 | PROJECTIONS REPORT

Figure 8 – Multiemployer Program Projected Net Financial Position

(Mean and Percentile Scenarios)

Figure 9 shows the full range of projected outcomes for the net position of the Multiemployer Program in 

FY 2032. This includes the scenarios that fall below the 1st percentile and above the 99th percentile. For each 

value of PBGC’s projected net position along the horizontal axis, the height of the line shows the frequency 

of that net position.

A significant majority of scenarios reflect only a modest positive or negative net position by the end of FY 

2032. However, the long, negative tail of the distribution illustrates the wide range of possible deficit 

outcomes that is consistent with the wide distribution shown in Figure 8 under the 1st to 15th percentile 

results. These unfavorable outcomes in the left tail have a low probability before FY 2032, but large negative 

net positions would become more likely if the projection were extended beyond FY 2032 (as the projection 

year approaches 2051).26F

27

27 Section 4262(j)(1) of ERISA requires SFA to be the amount necessary for the plan to pay all benefits through 2051. As a result, the 

incidence of new PBGC claims is expected to increase over time as the 10-year measurement period for purposes of classifying 

probable losses approaches 2051.

($110)

($100)

($90)

($80)

($70)

($60)

($50)

($40)

($30)

($20)

($10)

$0

$10

2013 2015 2017 2019 2021 2023 2025 2027 2029 2031

Billions of Dollars

Historical Experience FY 2013-2022 and PV 2023-2032 Projections

Projected Mean 99th - 85th 85th - 50th

50th - 15th 15th - 1st Actual (historical dollars)

69% probability of a 

positive net position in 

the ME Program at the 

end of FY 2032
 

PENSION BENEFIT GUARANTY CORPORATION 19 FY 202 2 | PROJECTIONS REPORT

Figure 9 – Potential FY 2032 Multiemployer Program Net Financial Position

The Multiemployer Program remains exposed to significant risk going forward. Many plans and industries 

continue to face ongoing challenges such as fewer active workers and declining contributions. Although the 

SFA will bolster the financial position of eligible plans, future developments in some industries that sponsor 

these plans could limit their sustainability, leaving workers and retirees in poorly funded plans exposed to 

continued risks to the security of their benefits, and risks of loss for the multiemployer system.

VARIABILITY IN MULTIEMPLOYER PROGRAM FINANCIAL POSITION

As described above, there is uncertainty in PBGC’s Multiemployer Program projections. Figure 10 shows the 

mean net financial position and liabilities, along with the results for the 15th to 85th and 1st to 99th percentiles 

and the range of outcomes for factors that have a significant impact on the FY 2032 net financial position. 

The considerations related to each factor are explored in the rest of this section.

Mean ($7.1)

15% Probability Net Financial Position 

is better than $4.6

15% Probability Net 

Financial Position is 

worse than ($21.2)

Median $3.9

0

50

100

150

200

250

300

($190) ($170) ($150) ($130) ($110) ($90) ($70) ($50) ($30) ($10) $10

Number of simulations

(out of 500)

Billions of Dollars (Present Value) 
 

PENSION BENEFIT GUARANTY CORPORATION 20 FY 202 2 | PROJECTIONS REPORT

Figure 10 – Variability in FY 2032 Multiemployer Net Financial Position

Present Value at the end of FY 2022 ($ billions)

Mean

15th – 85th percentile

range

1st – 99th percentile

range

PBGC net financial position

1. FY 2022 actual $1.1 $1.1 $1.1

2. FY 2032 projected ($7.1)a ($21.2) - $4.6 ($102.4) - $5.0 

Present value of financial activity expected during FY 2023-2032 

3. New claimsb ($12.1) ($28.0) – ($0.1) ($102.7) – ($0.0)

4. Premiumsc $4.1 $4.0 - $4.2 $3.9 – $4.3 

5. Asset/Liability gain/(loss) ($0.2) ($1.4) - $0.1 ($7.0) - $12.0 

6. Traditional (non-SFA) 

financial assistance payments $1.6 $1.5 - $1.7 $1.4 - $2.0 

a) If expressed in nominal terms, the mean projected net financial position for FY 2032 is negative $9.3 billion. 

b) New claims are the present value of future financial assistance at the time plan insolvency becomes probable by 2032. 

Approximately 30 percent of new claims are projected to come from plans expected to receive SFA.

c) Premiums plus $3.5 billion in assets as of September 30, 2022, are available to make periodic, traditional financial assistance

payments to insolvent plans during the projection period.

Figure 10 shows the present value of estimates of PBGC’s net position at the end of the 10-year projection in 

this report. The variability in results comes primarily from uncertainty around future claims, and to a smaller 

degree the uncertainty around premium income and investment returns on PBGC assets. Within the 15th to 

85th percentile range of outcomes, the Multiemployer Program’s present value of projected financial position in 

FY 2032 varies by $25.8 billion (discounted to September 30, 2022).

New Claims

In the Multiemployer Program, a new claim is booked when an ongoing plan expects to exhaust plan assets 

and require traditional financial assistance within the following 10 years.27F

28 A plan that exhausts its assets may 

terminate via mass withdrawal but is not required to do so. For modeling purposes, ME-PIMS assumes that 

60 percent of plans that go insolvent terminate through mass withdrawal and the remaining 40 percent of 

plans remain ongoing. The amount of the claim is the present value of all future financial assistance payments 

expected to be made to the plan. The financial assistance payments are estimated by calculating the difference 

between projected annual plan outlays (i.e., benefit payments at the PBGC guarantee level and plan 

administrative expenses) and projected annual plan income (i.e., employer contributions and withdrawal 

liability payments) in each future year following the exhaustion of plan assets. Net new claims are offset by 

the value of liabilities removed from the books if a plan’s financial condition improves and financial 

assistance is no longer expected to be needed within a ten-year timeframe.

28 A new claim can also be generated when an underfunded plan terminates via mass withdrawal, but in the ME-PIMS model no plans 

are assumed to go through mass withdrawal prior to insolvency. 
 

PENSION BENEFIT GUARANTY CORPORATION 21 FY 202 2 | PROJECTIONS REPORT

As shown in Figure 10 above, the mean present value of net new claims is about $12.1 billion over the next 

10 years. While the median level of net new claims during this period is only $0.5 billion, it reaches $102.7

billion at the 1st percentile scenario. This demonstrates that in the most unfavorable scenarios the 

Multiemployer Program’s financial position could revert back to its pre-ARP levels. 

The enactment of ARP in 2021 helped financially troubled multiemployer plans that had been booked as 

liabilities or may have generated new claims in the coming years. Consistent with Figure 8 and Figure 9, few

new claims are projected in the next ten years because SFA is expected to forestall plan insolvencies beyond 

FY 2042 even in many scenarios where returns are unfavorable. However, in scenarios with very poor 

outcomes, many plans that were “unbooked” following the enactment of ARP are projected to become 

“rebooked” by FY 2032, which drives up the mean claims amount. The two most significant risk factors for 

plans becoming “rebooked” are:

• Unfavorable investment returns: Unfavorable asset performance for both SFA and non-SFA assets, 

particularly during the initial projection years, will accelerate plan insolvencies. Financially troubled 

plans have limited capacity to recoup large losses when the annual cash outflows are a large 

percentage of the remaining assets. Asset performance is likely to be correlated between plans, so 

lower investment returns could have a significant detrimental impact on the solvency of all plans in 

the program and thus PBGC’s future net position. 

• Lower-than-expected future contribution income: multiemployer contribution income is driven by 

the size of the workforce as measured by Contribution Base Units (CBUs) and contribution rate(s). 

CBU experience is impacted by several factors, such as local and national labor market conditions, 

industry outlook, non-union competition, local business conditions, technology, productivity and job 

automation, and employer withdrawals. These factors are difficult to predict over long time horizons. 

The level of CBUs could deviate significantly from the plan’s projections in its SFA application (and 

from the assumptions used in ME-PIMS). A decline in contribution income could accelerate a plan’s 

insolvency and generate a new PBGC claim.

Premium Income 

PBGC premium rates are set by Congress. Unlike the premium rates for the Single-Employer Program, 

premium levels in the Multiemployer Program do not vary based on a plan’s funded position. The 

Multiemployer Program has only a flat rate premium that is determined based on a plan’s participant count 

and future indexation based on the National Average Wage Index. Consequently, there is little variability in 

expected multiemployer premium income.

As shown in Figure 10 above, the mean present value of premium income is about $4.1 billion over the next 

10 years and varies by only $0.4 billion between the 1st and 99th percentile outcomes. 

Investment Outcomes

Since the 1980’s, PBGC does not trustee multiemployer plans. Nearly all of the assets of the Multiemployer 

Program are held in a Revolving Fund, which collects premium income and pays out Financial Assistance 

loans under Section 4261. By law, the Revolving Fund assets must be invested in U.S. Treasuries.28F

29 Because 

there are no investments in return-seeking assets, the range of future projected return outcomes for most

29 This excludes a portion of assets that must be held in non-interest bearing securities based on requirements under MPRA.
 

PENSION BENEFIT GUARANTY CORPORATION 22 FY 202 2 | PROJECTIONS REPORT

scenarios is limited. The projected returns are dependent on the Treasury yields projected in ME-PIMS. The

$19 billion range in the asset/liability gain/(loss) between the 1st and 99th percentiles is driven by scenarios 

with extreme changes in interest rates over the next ten years, and the corresponding impact on the present 

value of PBGC liabilities. 

MULTIEMPLOYER RECONCILIATION OF FY 2021 PROJECTIONS TO 

FY 2022 PROJECTIONS

Figure 11 provides a detailed reconciliation of the changes in estimates of the Multiemployer Program’s net 

financial position from last year’s FY 2021 projections to this year’s FY 2022 projections. ME-PIMS 

projections of PBGC’s multiemployer obligations result in a mean present value of negative $7.1 billion for 

FY 2032. This is a decline in net financial position of $2.0 billion from the previous projection of negative 

$5.1 billion for FY 2031. As shown by row 4 of Figure 11, the estimated itemized impacts of changes to the 

model on the projected FY 2032 net position largely cancel each other out. The $2.0 billion reduction in the 

net position is driven primarily by the passage of time. 

Figure 11 – Reconciliation of Changes in Multiemployer Projection Results

Present Value at the end of FY 2022 ($ billions)

1. FY 2031 Mean Net Financial Position from FY 2021 Projections Report ($5.1) 

2. Passage of Time (2.2) 

3. Expected FY 2032 Mean Net Financial Position [(1) + (2)] ($7.3) 

4. Changes 

a) New Plan Data (including from SFA applications) (1.1) 

b) New Economic Data (including Economic Assumption Changes) 3.4 

c) Model Improvements 0.1 

d) Other Assumption Changes (2.2) 

e) Total Changes [(4a)+(4b)+(4c)+(4d)] $0.2 

5. FY 2032 Mean Net Financial Position [(3) + (4e)] ($7.1) 

6. Adjustment from Present Value to Nominal Value (2.2) 

7. Nominal Value of FY 2032 Mean Net Financial Position [(5) + (6)] ($9.3) 

Note: The order of changes impacts the magnitude of each individual change but not the sum of all changes.
 

PENSION BENEFIT GUARANTY CORPORATION 23 FY 202 2 | PROJECTIONS REPORT

Explanations of the changes in the mean net position shown in Figure 11 are:

Passage of Time – The FY 2021 report projected PBGC’s net position in FY 2031 and presented the results 

valued in 2021 dollars. To compare this with the FY 2022 report, which projects to FY 2032 with values 

reported in 2022 dollars, the FY 2021 projections are rolled forward to project one additional year with one 

less year of discounting. In addition, the FY 2022 projection includes one additional year of projected new 

insolvencies compared to the FY 2021 projection (i.e., those in the FY 2022 projection are projected to 

become insolvent through FY 2042, whereas the FY 2021 projection only includes projected insolvencies 

through FY 2041). The effect of the roll forward from 2021 to 2022 is a reduction of $2.2 billion in the 

projected net position.

New Plan Data – Changes in the starting data between FY 2021 and FY 2022 reflect new plan data provided 

on plans’ Forms 5500.29F

30 The FY 2022 data also includes data from SFA applications submitted as of March 

13, 2023, including SFA amounts as well as projected benefit payments and withdrawal liability income. For 

plans that submitted a lock-in application, the model estimates SFA based on plan information as of 

December 31, 2022.30F

31 Additionally, the model now reflects zone status certification data through plan year 

2022, which allows for improved projections of SFA eligibility. The combined effect of the new data is a 

decrease in the projected net position of $1.1 billion.

New Economic Data (Including Economic Assumption Changes) – The different economic climate in 

FY 2022 compared to FY 2021 results in changes to the ME-PIMS economic assumptions. Plan assets 

experienced poor returns and losses on fixed income investments resulting from rising interest rates during 

calendar year 2022. Plans that apply for SFA after 2022 can recover those losses, whereas the likelihood of 

insolvency increases for plans that do not receive SFA. Overall, there is an improvement in the projected net 

position driven by higher projected future asset returns. Higher interest rates increase expected future returns, 

particularly within the first 10 years of the projection. The combined impact of the new economic data and 

assumptions is an increase in the projected net position of $3.4 billion.

Model Improvements – Various programming refinements were made to the ME-PIMS model in 

conjunction with this report. The combined effect of these updates increases the projected net position by

$0.1 billion.

Other Assumption Changes – Modifications to assumptions include an update to (1) asset allocations and 

return assumptions, (2) contribution rate increase assumptions, (3) projected withdrawal liability payment 

assumptions, and (4) the mortality table and improvement scale for determining plan cash flows. Details 

about each of these assumption changes can be found in the Changes from the Prior Year section of the 

Appendix. Reflecting these changes decreases the projected net position by $2.2 billion.

30 Due to the potential distorting impact of the COVID-19 pandemic on 2020 contributions, the FY 2022 ME-PIMS model projects 

future plan contribution income based on 2019 per capita contribution levels.

31 Information about the SFA Waiting List and lock-in applications can be found here: https://www.pbgc.gov/arp-sfa/sfaapplication-guidance-non-priority-group-plans
 

PENSION BENEFIT GUARANTY CORPORATION 24 FY 202 2 | PROJECTIONS REPORT

SENSITIVITY OF CHANGES TO THE MULTIEMPLOYER MODEL 

Discount Rate 

The sensitivity information provided below relates to the discount rate used to calculate the present value of 

PBGC’s projected traditional financial assistance payments. Only the discount rate for calculating PBGC 

liability values was changed; no other related variables, such as inflation or asset returns, are changed in the 

sensitivity calculations below. The information is presented as present values in FY 2022, but the rate used to 

discount the projected FY 2032 net financial position back to FY 2022 is not changed for this sensitivity 

analysis.

Figure 12 – Sensitivity of Net Financial Position to Discount Rate Changes

Present Value at the end of FY 2022 ($ billions)

+50 Basis Points Baseline -50 Basis Points

FY 2032 Multiemployer Net 

Financial Position ($5.5) ($7.1) ($9.0)

If market prices for annuities were based on discount rates 50 basis points higher than in the baseline

projections, the mean present value of the FY 2032 Multiemployer Program net position would improve by 

$1.6 billion. Discount rates 50 basis points lower would worsen the mean net position by $1.9 billion in FY 

2032. 
 

PENSION BENEFIT GUARANTY CORPORATION 25 FY 202 2 | PROJECTIONS REPORT

SINGLE-EMPLOYER PROGRAM

SINGLE-EMPLOYER PROGRAM OVERVIEW

PBGC’s Single-Employer Program covers defined benefit pension plans that generally are sponsored by a 

single private-sector employer. The Single-Employer Program covers about 22.3 million participants in about 

23,800 pension plans. The Single-Employer Program’s financial status has evolved from historical deficits to a 

positive net financial position projected to grow over the next 10 years. None of this year’s projected 

scenarios result in PBGC’s Single-Employer Program running out of money within the next 10 years. The 

projected growth in the net financial position over the upcoming 10-year period is due primarily to expected 

premium revenue exceeding the cost of expected claims. 

The information in this report starts with PBGC’s existing assets and liabilities as of September 30, 2022.

However, because the variable rate premium (VRP) for the majority of single-employer plans is based on 

interest rates and assets as of January 1, the projection incorporates actual economic and PBGC financial 

experience for the quarter ending December 31, 2022. SE-PIMS is used to project:

• Future premium income,

• Assets and liabilities for single-employer plans that may become future PBGC claims and increase 

PBGC’s net benefit obligations (assets include plan assets and additional assets that may be recovered 

from the sponsors of terminating plans),

• Liabilities for plans currently trusteed by PBGC, and

• Future investment income on PBGC assets, based on PBGC’s investment policy and asset 

allocations.

The projections include the impact of the following retirement provisions included in SECURE 2.0:

• A freeze in the dollar amount of variable premium rate at $52 per $1,000 of unfunded vested benefits 

for all plan years beginning after calendar year 2023, and

• A cap of 0.78 percent for the rate of annual mortality improvement assumed beyond a plan’s 

valuation date, for purposes of minimum funding valuation dates occurring during or after 2024.

This also reduces the measurement of liabilities used to determine VRPs. 

Both of these provisions result in a reduction in VRP revenue in the projections, as well as a reduction in 

projected plan contributions.31F

32 However, the impact is modest and does not meaningfully change the 

expected improvement in the net financial position over the upcoming 10-year period. More information

about how these SECURE 2.0 provisions affect PBGC projected funded status is provided in the discussion 

following Figure 17 of this Report.

32 SE-PIMS assumes plan contributions are driven in part by the plan sponsor’s desire to reduce or avoid paying PBGC premiums. A 

reduction in premium levels therefore reduces assumed contributions.
 

PENSION BENEFIT GUARANTY CORPORATION 26 FY 202 2 | PROJECTIONS REPORT

SINGLE-EMPLOYER PROJECTIONS OF NET FINANCIAL POSITION

The FY 2022 projections show that the Single-Employer Program net financial position is likely to continue 

to improve. This pattern is similar to the projection reported last year. 

Figure 13 shows PBGC’s actual net position for FY 2013 to FY 2022 and selected ranges of projected net 

positions for the next 10 years. As shown in the FY 2022 Single-Employer Program financial statements, 

assets of $124.4 billion and liabilities of $87.8 billion result in a positive net position of $36.6 billion at the 

beginning of the projection period. The widening cone of results shows that the uncertainty around the net 

position grows in the future. This year’s mean projected present value net position in FY 2032 is $63.6 billion, 

an increase of $10.3 billion from the comparable numbers in the FY 2021 report. Expressed in nominal 

terms, the mean projected net position in FY 2032 is $87.3 billion. 

Figure 13 – Single-Employer Program Projected Net Financial Position

(Mean and Percentile Scenarios)

PBGC’s net position is projected to improve over the 10-year period because premiums are projected to 

exceed expected claims, as they have in the recent past. 

Figure 14 shows the full range of the 5,000 outcomes projected by the model for PBGC’s Single-Employer 

Program’s financial position for FY 2032. This includes the scenarios that fall below the 1st percentile and 

above the 99th percentile. For the Single-Employer Program projection, there is only one scenario that results 

in a negative net position. For each value of PBGC’s projected net position along the horizontal axis, the 

height of the curve shows how many paths have that net position as a result. The higher the curve, the more 

($40)

($20)

$0

$20

$40

$60

$80

$100

$120

Billions of Dollars

Historical Experience FY 2013-2022 and PV 2023-2032 Projections

Projected Mean 99% - 85% 85% - 50%

50% - 15% 15% - 1% Actual (Historic Dollars)
 

PENSION BENEFIT GUARANTY CORPORATION 27 FY 202 2 | PROJECTIONS REPORT

simulations have results at that point in the distribution. The further any point is to the right of the curve, the 

better the financial position associated with that point. 

Figure 14 – Potential FY 2032 Single-Employer Program Net Financial Position

Vertical lines on the graph show the present value of PBGC’s projected FY 2032 net position at the 15th and 

85th percentiles and the mean and median values of projected net positions. The median is a $62.5 billion 

positive net position in FY 2032, while the mean is a $63.6 billion positive net position. The potential range 

of results for the FY 2032 net position ranges from negative $11.2 billion to positive $136.7 billion.

VARIABILITY IN SINGLE-EMPLOYER FINANCIAL POSITION

As described above, there is uncertainty in PBGC’s Single-Employer Program projections. Figure 15 shows 

the mean net financial position and liabilities, along with the results for the 15th to 85th and 1st to 99th

percentiles and the range of outcomes for factors that have a significant impact on the FY 2032 net financial 

position. The considerations related to each factor are explored in the rest of this section.

Mean $63.6

15% Probability Net 

Financial Position is better 

than $80.7

15% Probability Net 

Financial Position is 

worse than $45.6

Median $62.5

0

200

400

600

800

1000

1200

1400

($20) $0 $20 $40 $60 $80 $100 $120 $140

Number of simulations

(out of 500)

Billions of Dollars (Present Value) 
 

PENSION BENEFIT GUARANTY CORPORATION 28 FY 202 2 | PROJECTIONS REPORT

Figure 15 – Variability in 2032 Single-Employer Net Financial Position

Present Value at the end of FY 2022 ($ billions)

Mean

15th – 85th

percentile range

1st – 99th

percentile range

PBGC net financial position

1. FY 2022 actual $36.6 $36.6 $36.6 

2. FY 2032 projected $63.6a $45.6 - $80.7 $26.7 - $111.7

Present Value of financial activity expected during FY 2023 – FY 2032

3. New claims ($6.3) ($11.7) - ($1.3) ($28.3) - ($0.0)

4. Premiumsb $32.2 $24.9 - $40.8 $22.2 - $54.8

5. Asset/Liability gain/(loss) $1.2 ($17.3) - $18.4 ($34.4) - $51.7

6. Benefits paid $66.5 $61.1 - $72.0 $56.3 - $89.1

a) If expressed in nominal terms, the mean projected net financial position for FY 2032 is $87.3 billion

b) $32.2 billion mean premium income is the sum of $17.7 billion in flat-rate premium income and $14.5 billion in variable-rate 

premium income. The variability in premium income is largely attributable to VRPs. 

Figure 15 shows the present value of PBGC’s estimated net position at the end of the 10-year projection in 

this report. The variability in results comes from the uncertainty around future claims and premium income, 

which fluctuate with changes in plans’ underfunding, and investment returns on the portion of PBGC assets 

not matched to PBGC’s benefit liabilities. Within the 15th to 85th percentile range of outcomes, the SingleEmployer Program’s present value of projected financial position in FY 2032 varies by $35.1 billion 

(discounted to September 30, 2022).

Bankruptcy and New Claims 

When companies in bankruptcy or financial distress terminate their underfunded plans, that underfunding is 

the basis for a new PBGC claim. A claim is the excess of the present value of the plan benefits that PBGC is 

expected to pay over the value of the plan’s assets and any recovery from the sponsoring firm. A “new claim” 

is the claim for a plan that was not included in the most recent financial statements.32F

33 Figure 15 shows the 

mean and the range of outcomes for new claims.

In Figure 16, the full shaded area represents the 1st to 99th percentile level of claims and the inner banded 

areas shown in dark green and dark blue represent the range of outcomes between the 15th to 85th

percentiles.33F

34 The projections displayed for net new claims are for each year’s results, so patterns in the 

33 No specific determination of future “probable” claims is included in the projections for single-employer plans because the model 

does not attempt to predict future short-term PBGC accounting classifications of troubled plans that are close to terminating but have 

not yet terminated. 

34 The figure does not include claims for plans currently booked by PBGC, but not yet terminated (“Probable” plans). Since these 

plans had not terminated as of September 30, 2022, their claims are not included in the historic claims and they are excluded from the 

projections of future claims (since they are reflected in the balance sheet values that are projected forward in PIMS).
 

PENSION BENEFIT GUARANTY CORPORATION 29 FY 202 2 | PROJECTIONS REPORT

amount of variability reflect long-term trends rather than cumulative effects. The projections show a 

downward trend in expected claims over the 10-year period, largely due to a projected improvement in plan 

funding resulting from expected plan contributions and projected plan asset returns exceeding growth in plan 

liabilities. The very high level of claims at the 99th percentile is related to economic crisis scenarios where both 

the volume of bankruptcies and the amount of pension underfunding increase significantly at around the same 

time. Scenarios with low levels of claims are the result of favorable economic projections, which reduce both 

plan underfunding and the likelihood of plan sponsor bankruptcies. 

Figure 16 – Single-Employer Program Net New Claims

(Mean and Percentile Scenarios)

Figure 15 and Figure 16 both show a low level of projected claims in favorable projection scenarios (less 

than $1.3 billion total from FY 2023 to FY 2032 at the 15th percentile). This claims level is significantly 

smaller than claims historically incurred by PBGC even during periods of low incurred claims. This is 

primarily due to better plan funded levels and the assumption that well-funded plans will terminate via 

standard terminations rather than generate PBGC claims. The level of claims in the worst-case scenarios 

(approximately $28.3 billion total from FY 2023 to FY 2032 at the 99th percentile) is approximately $8.3 

billion lower than the Single-Employer Program’s net position at September 30, 2022.34F

35

35 The $28.3 billion is the 99th percentile of cumulative claims over the ten-year period and not the sum of ten individual years of 99th

percentile claims levels.

$0

$1

$2

$3

$4

$5

$6

$7

$8

Billions of Dollars

Historical Experience FY 2013-2022 and FY 2023-2032 Projections

Projected Mean 99% - 85% 85% - 50%

50% - 15% 15% - 1% Actual (Historic Dollars)
 

PENSION BENEFIT GUARANTY CORPORATION 30 FY 202 2 | PROJECTIONS REPORT

Premium Income 

PBGC’s premium structure and levels are set by Congress, but VRP income varies based on changes in 

single-employer plan underfunding and fixed rate premium income due to changes in the number of plan 

participants. For example, fixed rate premiums typically decrease when plans pay lump sums or transfer plan 

liabilities for some participants by purchasing group annuity contracts from an insurance company. VRPs 

increase when plan underfunding increases, for example, due to investment losses or declines in interest rates. 

Even though additional premium revenue improves PBGC’s net position, higher VRPs are associated with 

downside scenarios where asset returns are low and/or interest rates decrease, both of which increase plan 

underfunding. In other words, when the size of potential claims increases, premiums also increase, and vice 

versa, which reduces the ultimate impact of interest rates and investment returns on PBGC’s future net 

position. The combined effect of PBGC’s liability-driven investment strategy and the premium structure 

helps dampen volatility and mitigate risks in the Single-Employer Program.

Many single-employer plans have experienced significant drops in both plan asset and liability levels during 

2022 as large interest rate increases lowered the value of plan liabilities, fixed income, equity, and other 

investments. The combined impact of these asset and liability movements did not result in significant changes 

to the funded status for many plans. 

The freeze of the dollar amount of variable premium rate at $52 per $1,000 of unfunded vested benefits, 

included as part of the SECURE 2.0 retirement provisions, results in a modest reduction in projected future 

premium revenue. However, this new provision does not fundamentally change how the premium structure 

dampens volatility for the Single-Employer Program.

Investment Outcomes 

When PBGC trustees a single-employer plan, the plan’s assets are transferred to PBGC’s Trust Fund, as are 

any additional assets recovered from the sponsor during bankruptcy proceedings. Premium income received 

is invested in PBGC’s Revolving Fund, which is invested in Treasury securities. The total pool of SingleEmployer Program assets is invested according to PBGC’s investment policy, which employs a liability-driven 

strategy where most of the change in liability due to interest rate changes will be mirrored by changes in the 

asset value. Thus, although the investment returns for PBGC’s assets are somewhat volatile, positive

investment returns tend to offset increases in the value of PBGC’s liabilities, and negative investment returns 

tend to offset decreases in the value of PBGC’s liabilities. PBGC’s investment policy limits return seeking 

investments to no more than 15% of total assets.

Figure 15 shows the asset/liability gain, which reflects all factors that impact PBGC’s net financial position 

other than premium income and claims. This includes the difference between projected investment income 

and the change in PBGC’s liability due to interest rates. The numbers represent the range of cumulative 

outcomes that lie between the 15th and 85th percentiles and the 1st and 99th percentiles. For the 10-year 

projection period, the outcome ranges from a loss of $17.3 billion to a gain of $18.4 billion in the 15th to 85th

percentiles, expressed as present values discounted to 2022. SE-PIMS projects a mean asset/liability gain of

$1.2 billion.
 

PENSION BENEFIT GUARANTY CORPORATION 31 FY 202 2 | PROJECTIONS REPORT

SINGLE-EMPLOYER RECONCILIATION OF FY 2021 PROJECTIONS TO 

FY 2022 PROJECTIONS

Figure 17 provides a detailed reconciliation of the projection results due to changes in the model and data 

from last year’s projections to the FY 2022 projections. The mean projected position at the end of the 

projection period has increased by about $10.3 billion, to a present value of projected net position of $63.6

billion. This results from an expected $3.4 billion increase expected solely due to the passage of time, along 

with various somewhat offsetting changes due to updated data and changes to the SE-PIMS model that 

increase the mean net position by $6.9 billion. 

Figure 17 – Reconciliation of Changes in Single-Employer Projection Results

Present value at the end of FY 2022 ($ billions)

1. FY 2031 Mean Net Financial Position from FY 2021 Projections Report $53.3 

2. Passage of Time 3.4

3. Expected FY 2032 Mean Net Financial Position [(1) + (2)] $56.7 

4. Changes

a) New Plan, Sponsor, and PBGC Data 0.9

b) New Economic Data (including Economic Assumption Changes) 9.8 

c) Model Improvements (1.7)

d) Other Assumption Changes (1.4) 

e) Legislative Changes (0.7)

f) Total Changes [(4a)+(4b)+(4c)+(4d) +(4e)] $6.9

5. FY 2032 Mean Net Financial Position [(3) + (4f)] $63.6

6. Adjustment from Present Value to Nominal Value 23.7

7. Nominal Value of FY 2032 Mean Net Financial Position [(5) + (6)] $87.3

Note: The order of changes impacts the magnitude of each individual change but not the sum of all changes.

Passage of Time. The FY 2021 report projected PBGC’s net position in FY 2031 and presented the results 

valued in 2021 dollars. To compare with the FY 2022 report, which projects to FY 2032 with values reported 

in 2022 dollars, the FY 2021 projections are rolled forward to project one additional year with one less year of 

discounting. The effect of the roll forward is an increase of $3.4 billion in the projected net position. 

Plan, Sponsor, and PBGC Data. Between the FY 2021 and FY 2022 Annual Reports, PBGC’s net position

improved more than was projected with FY 2021 SE-PIMS, primarily due to lower claims and higher 

premiums experienced during FY 2021 as well as a reduction in existing liabilities that exceeded the reduction 

in existing PBGC assets. Some of the reduction in existing liabilities was due to the updated mortality table 

used in the FY 2022 Annual Report. Also, SE-PIMS is now estimating and including premium receivables as

assets as of September 30, 2032, which increases the projected net position. Partially offsetting the positive
 

PENSION BENEFIT GUARANTY CORPORATION 32 FY 202 2 | PROJECTIONS REPORT

impact of the changes above, updated single-employer plan and plan sponsor data results in an increase in

projected claims. The combination of these updates increases the projected net position by $0.9 billion. 

New Economic Data (Including Economic Assumption Changes). The different economic climate in 

FY 2022 compared to FY 2021 resulted in changes to the economic assumptions and has a significant impact 

on the projections. The combination of very poor equity returns, and large interest rate increases in 2022 

caused a significant decrease in plan assets and liabilities. Plan funding levels improved in 2022, but VRPs for 

2023 are expected to increase due to use of 24-month average interest rates (the “alternative premium 

funding target”) by many plans. Higher interest rates in the early years of the projection also lead to higher 

expected asset returns on both PBGC and plan assets. However, the FY 2022 SE-PIMS model assumes that 

the higher starting interest rates will trend down, whereas interest rates started low and trended up in the FY 

2021 model. As rates trend down, plan liabilities increase more than plan assets pushing up both projected 

claims and projected VRP revenue. Mean projected premiums increase more than claims because of the level 

of premium rates. Mean projected PBGC assets increase more than PBGC liabilities as interest rates drop 

because PBGC has fully hedged its interest rate risk but is projected to maintain a 15% allocation to higher 

returning assets even at the highest funded levels. The reference used to develop the long-term inflation and 

wage increase assumptions was updated to use expectations from the Congressional Budget Office (CBO) 

rather than the Social Security Administration, but this change had little impact on the results. The net effect 

of these changes was a $9.8 billion increase in the projected net position. 

Model Improvements. Several improvements have been made to the modeling for this year’s report. The 

changes include updates to the calculation of projected VRPs, a refinement in the timing of benefit payments, 

an adjustment for premium receipts expected following calendar year-end, and updates to how mortality is 

modeled within PIMS. The combined effect of these changes is a $1.7 billion decrease in the projected net 

position.

Other Assumption Changes. The FY 2022 SE-PIMS model was enhanced to incorporate an assumption 

for bulk annuity purchases (“buyouts”). Previously, the only de-risking activity modeled by SE-PIMS was an 

assumption for standard terminations, which continues to be included in the model. This update had little 

impact on projected claims but caused a modest reduction in projected premium income. 

Also, as discussed in the “Plan, Sponsor, and PBGC Data” paragraph above, the FY 2022 Annual Report 

reflected a preliminary mortality experience study conducted by PBGC. That experience study was later 

updated and resulted in some changes that were not yet reflected in either the FY 2022 Annual Report or 

PBGC’s December 31, 2022, financial information. To value liabilities after December 31, 2022, and to 

project mortality experience for participants in PBGC trusteed plans, SE-PIMS uses assumptions based on an 

update to the recent mortality experience study. The change in PBGC’s liabilities from using the updated 

mortality assumptions was not significant. 

The combined effect of these changes is a $1.4 billion decrease in the projected net position.

Legislative Changes. The SECURE 2.0 retirement provisions include the freeze in the VRP rate at $52 per 

$1,000 of unfunded vested benefits for plan years beginning after 2023. This provision reduces projected 

VRP revenue from plan sponsors with projected unfunded liabilities not subject to the annual per-participant 
 

PENSION BENEFIT GUARANTY CORPORATION 33 FY 202 2 | PROJECTIONS REPORT

VRP cap. For valuation dates occurring during or after 2024, the SECURE 2.0 provisions also include a cap 

of 0.78% for the assumed rate of annual mortality improvement for plan years after a plan’s valuation date, 

for purposes of minimum funding valuations and unfunded liabilities used to determine VRPs. This provision 

is projected to slightly lower future plan contributions as well as VRP revenue. In total, the combined impact 

of these changes is a $0.7 billion decrease in the projected net position, primarily due to the VRP rate freeze.

SENSITIVITY OF CHANGES TO SINGLE-EMPLOYER MODEL’S 

DISCOUNT RATE

The sensitivity information provided below relates to the discount rate for PBGC obligations. Only the 

discount rate for calculating PBGC liability values is changed; no other related variables, such as inflation or 

asset returns, are changed in the sensitivity calculations. The information is presented as present values in 

2022, but the rate used to discount the projected FY 2032 net financial position back to 2022 is not changed 

for this sensitivity analysis.

Figure 18 – Sensitivity to Discount Rate Changes in Single-Employer Results

Present Value at the end of FY 2022 ($ billions)

+50 Basis Points Baseline -50 Basis Points

FY 2032 Single-Employer 

Net Financial Position $66.1 $63.6 $60.6

If market prices for annuities were based on discount rates 50 basis points higher than in the base projections, 

the mean present value of the FY 2032 Single-Employer Program net position would improve by $2.5 billion. 

Discount rates 50 basis points lower would decrease the mean present value of the net position by $3.0

billion. 

SENSITIVITY OF CHANGES TO SINGLE-EMPLOYER MODEL’S 

ASSUMED PLAN DE-RISKING ACTIVITY

Figure 19 shows the estimated impact to the projected financial position if the assumed level of certain plan 

de-risking actions were doubled. These de-risking actions include retiree bulk annuity purchases and voluntary 

standard terminations modeled by SE-PIMS. For bulk annuity purchases, the baseline model assumes in each 

year that there will be an 8% chance that a plan above 80% funded will undergo a bulk retiree annuity buyout transaction to transfer 40% of its retiree liability to an insurance company. Voluntary standard 

terminations are modeled using parameters from an econometric analysis, based on the funded level of the 

plan, participant count, and whether the plan continues to offer future benefit accruals. Additional details 

about these baseline assumptions are described in the Appendix of this report. The sensitivity scenarios are 
 

PENSION BENEFIT GUARANTY CORPORATION 34 FY 202 2 | PROJECTIONS REPORT

shown both in isolation and in combination and include the estimated aggregate reduction in participants 

attributable to these events.35F

36 

Figure 19 – Sensitivity to Increases in Plan De-Risking Activity

Present Value at the end of FY 2022 ($ billions)

Mean Results: FY 2023 – FY 2032

2023-2032

Participant 

Reductiona

(millions)

2023-2032

Premiums 

Received

2023-2032

New 

Claims 

Incurred

FY 2032 

Mean Net 

Financial 

Position

1. Baseline report results 2.3 $32.2 ($6.3) $63.6

2. Double the assumed retiree 

annuity purchases only 3.8 $31.4 ($6.7) $62.4

3. Double the assumed voluntary 

standard terminations only 3.0 $31.6 ($6.2) $63.2

4. Double both the assumed retiree 

annuity purchases and voluntary 

standard terminations 

4.3 $30.9 ($6.6) $62.0

a) Includes only participant reductions related to assumed voluntary standard plan terminations and bulk retiree annuity purchases, 

and not participant reductions related to other causes such as demographic changes or lump sums windows

The results shown in Figure 19 above illustrate that elevated plan de-risking activity does not have a 

significant impact on the projected financial health of the Single-Employer Program. The ten-year cumulative 

decrease in projected premium income due to a reduced participant count is less than $2 billion in each 

sensitivity scenario. The increased retiree bulk annuity purchases result in a small (less than $1 billion)

increase in claims due to plans dropping below 80 percent funded after de-risking which triggers a claim upon 

projected bankruptcy in SE-PIMS. 

SINGLE-EMPLOYER STRESS TEST SCENARIO

Nearly all scenarios in the current SE-PIMS model project a positive net position in FY 2032. The variability 

in future net position is dampened because decreases in plan funding positions associated with high claim 

amounts also result in increases in VRP revenue. However, SE-PIMS may not capture all types of extreme 

events that PBGC could face in the future. Thus, it is informative to consider extreme events that may pose 

risks to the financial health of the Single-Employer Program. The following describes PBGC’s modeling 

approach and summary projection results for an illustrative example designed to stress test the financial 

resiliency of the Single-Employer Program.

36 The assumption for retiree annuity purchases was doubled by changing only the percentage of retirees assumed to be included in a 

transaction from 40% to 80%. The assumption for voluntary standard terminations was doubled by changing only the intercept term 

in the regression formula from the econometric analysis referenced in this report’s Appendix from -2.838 to -2.100.
 

PENSION BENEFIT GUARANTY CORPORATION 35 FY 202 2 | PROJECTIONS REPORT

Annual claims incurred by the Single-Employer Program have not exceeded $1.7 billion in a single year since 

2009. Claims typically follow bankruptcies which often spike during and after recessions. For example, the 

highest period of claims for the Single-Employer Program was 2001 to 2006, following the 2000-2002 

recession, when single-employer claims totaled $28.2 billion.36F

37 Approximately two-thirds of this amount 

($18.9 billion) is attributable to 6 of the 10 largest claims events in PBGC’s history.37F

38 The magnitude of the 

total claims during this 6-year period, adjusted to reflect the same percentage of overall liabilities in today’s 

single-employer universe of plans, would be $35 billion (roughly comparable to the level of PBGC's positive 

net position as of September 30, 2022). 

The illustrative stress test scenario was designed to represent a similar high-claims event with a market 

downturn and elevated rates of bankruptcy. The scenario includes a one-time 33.5% drop in equity values for 

PBGC and plan assets (resulting in a 20 percent reduction in the median asset return for plans in the first year 

of the projection) and increases in bankruptcy rates such that PBGC incurs more than $35 billion in new 

claims from FY 2023 through FY 2028.38F

39 The claims are concentrated in the first several years of the 

projection, similar to concentrated multi-year periods of claims in the past. All other model assumptions and 

methods in SE-PIMS remain unchanged from the primary run described in this report.

Figure 20 shows the mean projection of assets and liabilities in nominal terms of PBGC’s Single-Employer 

Program under both the stress test (dotted lines) and the baseline assumptions used for the rest of this report 

(solid lines). The margin between PBGC assets (dotted green line) and liability (dotted orange line) during the 

first two years of the projection shows a significant decrease in the positive net position, from PBGC’s actual

starting net position of $36.6 billion in FY 2022. This initial drop is primarily due to the influx of new claims 

early in the period, as nearly two-thirds of plan sponsors with a B+ or lower rating go bankrupt in the first 

two years of the projection. Unfavorable performance in PBGC’s trusteed asset pool in the first year of the 

projection also contributes to the decline. After that, the Single-Employer Program’s mean net position

improves each year due to higher variable-rate premium income resulting from lower plan funded levels 

following the initial asset decline. Additionally, the projected claims decrease as the number of plan sponsors 

with a B+ or lower rating quickly diminishes.

37 Annual historical claims for the Single-Employer Program are shown in Table S-4 of PBGC’s 2020 Data Tables.

38 These 10 firms are shown in Table S-5 of PBGC’s 2020 Data Tables.

39 For modeling purposes, a -20% plan asset return was generated by assuming a -33.5% return on equities and the claims level was 

generated by assuming that plan sponsors with a credit rating of B+ or lower have a 40% probability of bankruptcy in each year of the 

projection. The objective of the modeling is not to identify or predict the most likely type of scenario under which bankruptcies may 

occur, but to produce a total level of claims close to $40 billion during the first five years of the projection period. This level of claims

is larger than any scenario in PBGC’s baseline stochastic modeling and is consistent with PBGC’s 2001-2006 high-claims event, 

adjusted for the change in total liabilities in the single-employer universe.
 

PENSION BENEFIT GUARANTY CORPORATION 36 FY 202 2 | PROJECTIONS REPORT

Figure 20 – PBGC Single-Employer Program Assets and Liabilities 

by Fiscal Year under Stress Testa

a) The “Stress Test” assumes for all stochastic scenarios: (1) a 33.5% drop in equity values resulting in a 20% reduction in median 

plan asset returns in the first projection year; and (2) a 40 percent probability of bankruptcy in each projection year for firms with 

bond ratings of B+ or lower. All other assumptions and methods are consistent with those modeled under SE-PIMS and described 

in the Appendix.

Despite the unfavorable experience during the first couple years of the projection period (the large equity 

drop coupled with significant bankruptcy events), Single-Employer Program assets increase by roughly $65

billion in the first several years of the projection period. This is primarily due to the influx of assets from 

newly trusteed plans. PBGC would also take on liabilities that exceed the level of these assets. After the first 

several years, the Single-Employer Program’s liabilities drop as PBGC makes benefit payments. 

Corresponding Single-Employer Program assets are only projected to level out as premiums from ongoing 

plans offset benefit payments to participants in trusteed plans. 

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

Billons of Dollars

(Mean Results in Nominal Dollars)

PBGC Assets (stressed) PBGC Liability (stressed)

PBGC Assets (Baseline) PBGC Liability (Baseline)
 

PENSION BENEFIT GUARANTY CORPORATION 37 FY 202 2 | PROJECTIONS REPORT

Figure 21 – Projected Changes to PBGC Claims and Premiums under Stress 

Present Value at the end of FY 2022 ($ billions)

Mean Results –

FY 2023 – FY 2032 Baseline Stress Test Increase

New claims ($6.3) ($40.9) ($34.6) 

Premiums $32.2 $46.9 $14.7

Present Value of FY 2032 Net Position $63.6 $30.3 ($33.3)

Figure 21 summarizes the difference in ten-year total projected premiums and claims between the baseline 

SE-PIMS run and the stress test. The $34.6 billion increase in claims is more than double the $14.7 billion 

increase in premiums during this period, which reduces the FY 2032 net position by roughly $20 billion.39F

40

However, Figure 21 also shows that projected premiums would still be expected to exceed projected claims 

from FY 2023 through FY 2032.

The stress test scenario described in this report section is illustrative and not intended to be predictive of 

future experience. Despite the resemblance to actual experience in 2001 to 2006, a future event of this 

magnitude is unlikely. The scenario is intended to provide insight into the financial resiliency of the SingleEmployer Program even in extreme circumstances. 

SINGLE-EMPLOYER PLAN UNIVERSE: PROJECTED UNDERFUNDING 

A key indicator of risk exposure for PBGC is the level of aggregate underfunding in the single-employer plan 

universe. As previously discussed in this report, high levels of underfunding increase VRP revenue. However, 

plans that are underfunded also pose risks of new claims. The aggregate level of underfunding thereby serves 

as an important measure of PBGC’s total risk exposure, particularly in light of a major event that dramatically 

increases the rate of bankruptcies.

The following exhibits illustrate selected ranges of stochastic outcomes for projected aggregate underfunding 

for single-employer plans. Figure 22 presents a ten-year stochastic projection of plan underfunding based on 

the same baseline assumptions that are used in this report for purposes of projecting the PBGC singleemployer program’s net financial position. Figure 23 presents a ten-year stochastic projection of plan 

underfunding using most of these same baseline assumptions, except that plan sponsors are assumed to only 

contribute the minimum amount required by law. 

40 Additionally, there is a $13.4 billion decrease in the projected net position due to PBGC asset/liability losses, caused in large part by 

investment losses resulting from the assumed 33.5% decline in equities.
 

PENSION BENEFIT GUARANTY CORPORATION 38 FY 202 2 | PROJECTIONS REPORT

 Figure 22 – PBGC-Insured Single-Employer Plan Underfunding

 Plan Termination Basis: SE-PIMS Baseline

 (Mean and Percentile Scenarios)

Note: The estimated historical levels of underfunding from 2013 through 2019 are determined based on the methodology used in 

Table S-44 of PBGC’s 2020 Data Tables; i.e., adjusting plan liabilities reported on Form 5500 filings to estimate the liabilities on a 

plan termination basis. The projected levels of underfunding on and after 2023 are estimated using SE-PIMS, which utilizes a 

different calculation methodology to estimate underfunding on a plan termination basis. There are no values shown from 2020 

through 2022 because Form 5500 data for these plan years is not available at the time of this analysis.

In 2019, based on Table S-44 of PBGC’s 2020 Data Tables, system-wide underfunding in single-employer 

plans is estimated to have totaled nearly $500 billion. By the end of 2022, as projected by SE-PIMS, 

underfunding is estimated to have dropped to below $50 billion. The improved funding levels are primarily 

attributable to favorable asset returns and high levels of sponsor contributions made since 2017, as well as the 

significant rise in interest rates in 2022. The mean and median projections in Figure 22 above show an initial 

reduction of nearly $100 billion in estimated funded levels from the end of 2022 to the end of 2023, followed 

by projected steady improvement thereafter. The initial reduction in funded levels is primarily due to the 

PIMS model assuming a significant decrease in interest rates in 2023.40F

41 Funding levels are subsequently 

projected to improve over the remainder of the projection period as asset returns outpace liability growth and 

plans contribute above minimum funding requirements.

41 A downward trend in interest rates is assumed during the projection period as described in the Appendix. PIMS assumes changes 

in rates are steeper in the early years of the projection. 

 $(800)

 $(700)

 $(600)

 $(500)

 $(400)

 $(300)

 $(200)

 $(100)

 $-

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

Billions of Dollars

99th - 85th 85th - 50th

50th - 15th 15th - 1st

Estimated Historical Projected Mean

1st Percentile level of underfunding 

at the end of 2023 is $285 billion

Median level of underfunding 

at the end of 2023 is $102 billion
 

PENSION BENEFIT GUARANTY CORPORATION 39 FY 202 2 | PROJECTIONS REPORT

Both the mean and median levels of projected underfunding illustrated in Figure 22 show significant and 

sustained improvement in the projected financial status of single-employer plans from recent years. By the 

end of the 10-year projection period, the level of underfunding is once again projected to fall to 

approximately $50 billion. Additionally, the full range of stochastic outcomes shows only a minimal likelihood 

of returning to higher levels of underfunding, with a less than 1 percent chance of reaching $400 billion in 

aggregate underfunding over the next ten years. Overall, Figure 22 shows that using PBGC’s baseline

assumption for employer contribution behavior, PBGC’s risk exposure is projected to be generally 

constrained and explains the modest level of future claims projected in this report.

Under extreme economic conditions, it is possible that plan sponsors may be unwilling or unable to 

contribute more than the minimum required. Figure 23 below illustrates a similar ten-year stochastic 

projection of aggregate plan underfunding based on the same baseline assumptions used in Figure 22 except 

that sponsors are assumed to contribute only the minimum amount required under the law.

Figure 23 – PBGC-Insured Single-Employer Plan Underfunding

Plan Termination Basis: Assuming Plans Contribute Only the Minimum Required Amount

(Mean and Percentile Scenarios)

Note: The estimated historical levels of underfunding from 2013 through 2019 are determined based on the methodology used in 

Table S-44 of PBGC’s 2020 Data Tables; i.e., adjusting plan liabilities reported on Form 5500 filings to estimate the liabilities on a 

plan termination basis. The projected levels of underfunding on and after 2023 are estimated using SE-PIMS, which utilizes a 

different calculation methodology to estimate underfunding on a plan termination basis. There are no values shown from 2020 

through 2022 because Form 5500 data for these plan years is not available at the time of this analysis.

Compared to the baseline projections in Figure 22, the results in Figure 23 show roughly double the level of 

projected underfunding in the mean and median outcomes. Additionally, the range of outcomes is 

significantly wider under unfavorable projection scenarios. Aggregate underfunding reaches $400 billion in 

more than 15 percent of scenarios and can reach approximately $750 billion at the 1st percentile. Therefore, 

 $(800)

 $(700)

 $(600)

 $(500)

 $(400)

 $(300)

 $(200)

 $(100)

 $-

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

Billions of Dollars

99th - 85th 85th - 50th 50th - 15th

15th - 1st Estimated Historical Projected Mean

Median level of underfunding 

at the end of 2023 is $187 billion

1st Percentile level of underfunding 

at the end of 2023 is $441 billion
 

PENSION BENEFIT GUARANTY CORPORATION 40 FY 202 2 | PROJECTIONS REPORT

the results in Figure 23 serve as a useful point of reference when evaluating the sensitivity of PBGC’s future 

risk exposure to employer contribution behavior.
 

PENSION BENEFIT GUARANTY CORPORATION 41 FY 202 2 | PROJECTIONS REPORT

STATEMENT OF ACTUARIAL OPINION

We, the undersigned, certify that this actuarial evaluation has been prepared in accordance with generally accepted 

actuarial principles and practices and, subject to the disclaimers herein, to the best of our knowledge, fairly reflects 

the possible distribution of projected outcomes relative to the operations and status of the Corporation’s SingleEmployer Program and Multiemployer Program as of September 30, 2022. 

In preparing this evaluation, we have relied upon information provided to us regarding plan and participant data, 

plan sponsor financial information, historic asset yield and bankruptcy information and other matters. We have 

reviewed this information for reasonableness as appropriate based on the purpose of the evaluation. The 

responsibility for the source information obtained from Forms 5500 and elsewhere rests with the preparers of 

these data.

Additionally, we have relied on actuaries, programmers, and modelers from PBGC as well as external contractors 

to maintain, enhance, and run the PIMS models in order to generate the results used in this report. This includes 

additional reliance on PBGC actuaries and economists to help develop the assumptions and methods used within 

the PIMS models. 

Subject to the disclaimers herein, in our opinions, 

(1) The techniques and methodology used are generally acceptable within the actuarial profession.

(2) The assumptions used are appropriate for the purposes of this report. 

(3) The resulting evaluation represents a reasonable estimate of the possible distribution of projected outcomes 

relative to the operations and status of these programs. 

The undersigned are available to discuss the material in this report.

I, Theodore A. Goldman, am the Director of PBGC’s Policy, Research and Analysis Department (PRAD). I am a 

Member of the American Academy of Actuaries, a Fellow of the Society of Actuaries, and an Enrolled Actuary. I 

meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained 

in this report.

I, Kevin M. Muse, am an actuary in PBGC’s Policy, Research and Analysis Department (PRAD). I am a Fellow of 

the Society of Actuaries and an Enrolled Actuary. I meet the Qualification Standards of the American Academy of 

Actuaries to render the actuarial opinion contained in this report.

I, R. Evan Inglis, am the Chief Policy Actuary in PBGC’s Policy, Research and Analysis Department (PRAD). I am 

a Member of the American Academy of Actuaries, a Fellow of the Society of Actuaries, and an Enrolled Actuary. I 

meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained 

in this report.

 Theodore A. Goldman, FSA, EA, MAAA Kevin M. Muse, FSA, EA

Director, Policy, Research and Analysis Department, PBGC PIMS Division Manager, Policy, Research, and Analysis Department, PBGC

R. Evan Inglis, FSA, EA, CFA, MAAA

Chief Policy Actuary, Policy, Research and Analysis Department, PBGC
 

PENSION BENEFIT GUARANTY CORPORATION 42 FY 202 2 | PROJECTIONS REPORT

APPENDIX

OVERVIEW OF PIMS

The analysis in this report uses ME-PIMS and SE-PIMS, which model pension plans based on estimated data. 

They use data reported by multiemployer plans and a sample of single-employer pension plans to model the 

future funding status of the universe of private sector pension plans. Both models project long-term financial 

outcomes by running many simulations, each modeling year-by-year changes over 20 years into the future. 

Each simulation starts with known facts about the economy, the universe of PBGC-insured plans, and 

PBGC’s financial position. The models then introduce random year-by-year changes (within certain bounds) 

to simulate economic fluctuations, producing 500 simulations for alternate economic paths through time. 

Within a simulation, each plan’s outcomes from one year form the following year’s starting point for that 

plan, and so on. The models recognize that all single-employer plan sponsors have some chance of 

bankruptcy, that all multiemployer plans have some chance of insolvency, and that these probabilities change 

over time depending on a variety of factors.

Neither PIMS model attempts to model all plan sponsor behavior. However, each model does anticipate 

certain responses in some key areas. ME-PIMS reflects anticipated employer and plan sponsor behavior 

through contribution rate assumptions related to zone status, MPRA applications, and SFA-related 

assumptions. SE-PIMS reflects anticipated plan sponsor behavior related to contributions, standard 

terminations, and bulk annuity purchases for retirees. Plan sponsor behavior is inherently difficult to model 

and can change in unforeseeable ways as conditions change. This is a limitation of the PIMS models which 

could be material if certain plan sponsor actions deviate significantly from the assumptions used in the model.

PBGC is not aware of any material inconsistencies among the assumptions used in the PIMS models, nor of 

any unreasonable output resulting from the aggregation of assumptions.

Future Outcomes Are Expressed in Present Value Terms 

This report expresses future outcomes in present value terms (i.e., discounted back to the end of FY 2022), 

but shows nominal values in certain figures (values discounted to the end of FY 2032 or any intervening year 

are described as “nominal values” in this report). Results are explicitly noted as expressed in nominal or 

present value terms. Present values increase when interest rates go down and vice versa.

The uncertainty in future interest rates is modeled in both versions of PIMS. Therefore, interest rates change 

in each year in each simulation. Each simulation’s outcomes are discounted based on the 30-year Treasury

bond yields projected for that simulation, regardless of whether the underlying simulated cash flows are 

generated from holdings of equities, corporate bonds, or U.S. Treasury bonds.

How Projections Compare to PBGC’s Financial Statement Liabilities 

PIMS treats the most recent PBGC financial statement liabilities as the starting point and estimates how they 

may vary in the future, adding the effects of projected new claims, benefit payments, and asset returns. The 

projections of future financial statement information in this report explicitly determine liabilities for plans that 
 

PENSION BENEFIT GUARANTY CORPORATION 43 FY 202 2 | PROJECTIONS REPORT

are projected to be “probable for financial assistance” (multiemployer), but not for plans that are “probable 

to terminate” (single-employer). 

Capital Market Assumptions 

The following economic variables are stochastically projected in both versions of PIMS:

Interest Rates, Stock Returns, and Related Variables. These variables are determined by the underlying 

means, standard deviations, and correlation matrix established for the PIMS projections (see Figure A-1).

Related variables include inflation, wage growth, and increases in benefits for flat-dollar plans.

• Interest rates are represented by the 30-year Treasury yield. They are modeled as correlated over time 

and with an underlying trend based on the difference, at the start of the simulation, between the 30-

year Treasury yield and the expected rate of future inflation. For the 10-year period ending December 

31, 2022, monthly values of the 30-year Treasury yield averaged 72 basis points higher than the 

breakeven inflation rate on 30-year Treasury inflation indexed securities. The trend incorporated in the 

model adjusts the distribution of projected Treasury yields such that the median projected yield 

approaches this 72-basis point spread over the median projected inflation rate. The inflation 

assumption for this year’s report is based on CBO’s 10-Year Economic Projections released in 

February 2023.41F

42 Each year’s median PIMS inflation rate is modeled to align with the corresponding 

rate from the CBO projection through 2033 (the last year of the CBO projection), up to an ultimate 

median rate of 2.30%. Incorporating the 72-basis point spread between inflation and the 30-year 

Treasury yield, this results in the projected median value of the ultimate 30-year Treasury yield 

trending toward 3.02%. The trend rate is estimated using data from the period 1993-2021. The 

Treasury yield for a given period is expected to be equal to the yield for the prior period, plus the 

underlying trend adjustment, and plus or minus a randomly generated amount. The underlying trend 

for this year’s report results in a projection of generally falling interest rates, but at any point on a 

given projected path, interest rates can either rise or fall depending on the randomly generated 

component of interest rate changes.

• Corporate bond yields and stock returns are modeled based on risk premiums. Credit spreads on 

investment-grade corporate bonds, relative to 30-year Treasury yields, are assumed to regress toward 

their historical mean values with no stochastic variation. Excess stock returns, relative to 30-year 

Treasury returns, are assumed to be independent from one period to the next. To determine a 

simulated sequence of excess stock returns, the model randomly draws returns from a distribution that 

reflects historical experience going back to 1926. Stock returns are more likely to be high when the 

Treasury yield is falling and vice versa. The random draws affecting the bond yields and stock returns 

use correlations based on historical data.42F

43

42 The inflation assumption is based specifically on the Consumer Price Index, All Urban Consumers (CPI-U), available here: 

https://www.cbo.gov/system/files/2023-02/51135-2023-02-Economic-Projections.xlsx

43 The analysis is based on data from 1973 to 2007. This assumption was subsequently reviewed by PBGC in conjunction with the FY 

2020 Projections Report; it was determined that the estimate derived in that time frame is still representative of current correlation 

rates. 
 

PENSION BENEFIT GUARANTY CORPORATION 44 FY 202 2 | PROJECTIONS REPORT

• Annual wage growth is assumed to have two components, inflation (as described above) and a fixed 

productivity growth factor applied to each PIMS projected year. The productivity growth factor is 

derived from the relationship between inflation and average real wage growth over the projection 

period reported in CBO’s 10-Year Economic Projections.43F

44 Average real wage growth for a given year 

is calculated from CBO’s projections as the growth in wages and salaries (plus proprietor’s income) 

divided by civilian employment, less inflation.

• The random draws affecting the bond yields and stock returns are correlated according to an estimate 

derived from historical data.44F

45 Stock returns are more likely to be high when the Treasury yield is 

falling and vice versa. Credit spreads on investment-grade corporate bonds are modeled to regress 

toward their historical mean values.

PIMS Representation of Plan Asset Allocation. The asset allocation for all plans is represented by a 

combination of three economic variables available in both SE-PIMS and ME-PIMS (S&P 500 Return, 30-

Year Treasury Return, and 30-Year Treasury Yield). The SE-PIMS allocation is based on an internal study of 

historical asset returns among large plans that estimated the mixture of the three available economic variables 

that best fit those historical returns, with returns adjusted down by 2.5 basis points. The ME-PIMS allocation 

is based on an internal analysis of plan allocations from Form 5500 data that uses characteristics of the asset 

classes, such as expected returns, correlations, and estimated durations, to fit the data to the three available 

economic variables.45F

46 The representation of the plan asset allocation used in SE-PIMS and ME-PIMS is 

shown in the table below.

Representation of Plan Asset Allocation

S&P 500

Return

30-Year 

Treasury 

Return

30-Year 

Treasury 

Yield

SE-PIMS 48% 22% 30% 

ME-PIMS* 73% 12% 15% 

* Except for the largest plan to receive SFA, where the assumed asset allocation is 100% fixed 

income, which is represented by a 15%/40%/45% allocation to the factors above

Adjustment to Asset Allocation for Plans with SFA. Plans that receive SFA are assumed to reallocate their 

non-SFA assets to get as close as possible to a “policy” allocation roughly equal to the average allocation 

from the most recent Form 5500 Schedule R. The policy allocation target is shown below. 

44 The CBO’s 10-Year Economic Projections are available here: https://www.cbo.gov/system/files/2023-02/51135-2023-02-

Economic-Projections.xlsx. 

45 The analysis is based on data from 1973 to 2007. This assumption was subsequently reviewed by PBGC in conjunction with the FY 

2020 Projections Report; it was determined that the estimate derived in that time frame is still representative of current correlation 

rates. 

46 PBGC updated this internal analysis based on more recent Form 5500 filing data. The updated analysis resulted in an increase to the 

allocation to S&P 500 Return and decreases to the allocations to the 30-Year Treasury Return and 30-Year Treasury Yield. 
 

PENSION BENEFIT GUARANTY CORPORATION 45 FY 202 2 | PROJECTIONS REPORT

Assumed Policy Allocation Target for Plans with SFA* 

Asset Class Target Policy 

Allocation %

Equity 48%

Other Return-Seeking Assets 32%

Investment Grade Fixed Income 20%

* Except for the largest plan to receive SFA, for which the target is assumed to be

100% fixed income

Plans with SFA assets are assumed to invest the maximum allowable SFA assets in equities – 33% of SFA 

allocated to U.S. equity securities and 67% to investment grade fixed income. ME-PIMS determines the 

allocation of non-SFA assets such that the overall allocation is as close as possible to the “policy” allocation 

shown above. The ME-PIMS representation using three economic variables is then modified to represent this 

adjusted allocation of assets. This modification of the PIMS representation of asset allocation is done each 

year in the projection until the plan has depleted all its SFA funds, which are assumed to be used first to pay 

out benefit payments and plan expenses. 

PIMS Projection of PBGC Single-Employer Program Assets. PBGC Single-Employer Program assets 

are modeled separately for the revolving fund and the trust fund. Revolving fund assets are modeled to be 

invested entirely in U.S. Treasuries, as required by law. Trust fund assets are assumed to consist of the SingleEmployer Program’s entire 15% allocation to return-seeking assets (which results in the allocation to returnseeking assets within the trust fund itself exceeding 15%), with the remainder of the fund invested in U.S. 

corporate bonds. Returns on return-seeking assets are represented by the “S&P 500 Return” economic 

variable. Returns on U.S. Treasuries are determined based on the 30-year Treasury yield and future changes to 

the yield. Returns on U.S. corporate bonds are based on assumptions for the mean and variance, as well as

correlations to other returns. The mean and variance are estimated from historical spreads above 30-year 

Treasury returns, and the correlations are estimated from historic U.S. corporate bond returns, S&P 500 

returns, and 30-year Treasury returns. 

PIMS Projection of PBGC Multiemployer Program Assets. PBGC Multiemployer Program assets are 

assumed to be invested entirely in U.S. Treasuries, as required by law. The assumed return is determined 

based on the yield and changes in the yield of 30-year Treasuries. 

ME-PIMS

ME-PIMS — Overview 

Each fiscal year-end, PBGC analyzes insured large (over 35,000 participants) and medium (between 2,500 and 

35,000 participants) multiemployer plans to identify those ongoing plans that might become claims against

the Multiemployer Program. In determining whether a plan should be recorded in PBGC’s year-end financial 

statements, PBGC evaluates whether the plan is likely to become insolvent within the next 10 years in which 

case it is labeled “probable” and booked as a liability and income statement expense. In addition, PBGC 
 

PENSION BENEFIT GUARANTY CORPORATION 46 FY 202 2 | PROJECTIONS REPORT

discloses the aggregate dollar amount of those multiemployer plans projected to become insolvent within the 

next 11 to 20 years, which are labeled “reasonably possible”. 

To estimate future claims against the Multiemployer Program that are not already booked in the current 

financial statements, ME-PIMS projects, separately for each simulation, a plan’s funding status, cash flow, 

asset base, and change in the contribution base, to determine whether that plan would be booked as a liability 

according to the criteria described above. 

ARP has been reflected in the FY 2022 ME-PIMS projections by assuming that all plans that become eligible 

for SFA under section 4262(b) of ERISA by the 2022 plan year will apply for and receive SFA payments. 

Current estimates of projected SFA payments are not shown in this report as obligations of PBGC nor are 

the payments included in the cash flow exhibits (unless specifically noted). However, plan solvency forecasts, 

projected PBGC liabilities, and traditional financial assistance reflect actual and estimated SFA payments to 

eligible and approved plans. 

ME-PIMS — Data 

The model uses Form 5500 data for each plan in the universe of multiemployer plans, including terminated 

and insolvent plans. Selected numeric entries from Schedules MB, R, and H/I are downloaded from the 

Form 5500 datasets to the PIMS database. 

A sample of plans for which PBGC has complete data, information on plan provisions, demographics of 

active workers, and plan assumptions as to future demographic changes is used to impute data to other plans 

of similar size, demographics, or industry, as appropriate. A brief description of the methodology follows: 

• Plans in the current year’s ME-PIMS database are categorized into major industries. 

• Within each industry, the 25th percentile, the 75th percentile, and the median active-to-inactive ratios 

are determined.

• For each plan not in the sample, the downloaded data is extended by imputing plan provisions, 

census information, and assumptions from the closest match to the 25th percentile, the 75th

percentile, or median active-to-inactive ratio.

• The set of sample plans and the closest matches were updated from the prior year.

Contributing employers’ information is not generally available and thus not used in this model; all 

contribution information used in this report is on a plan level.

Data is reviewed for outliers and missing fields. Data on critical and declining zone status plans is 

supplemented with participant notices and other information available to PBGC. The FY 2022 ME-PIMS 

model utilizes zone status certification data provided by the IRS for plan years 2020 through 2022.

Data on withdrawal liability payments. For plans that have applied to PBGC for SFA, the model uses the 

projected withdrawal liability payments included in the calculation of SFA. Otherwise, for plans with greater 

than 5,000 participants, withdrawal liability payment data was obtained from the 2020 Schedule MB 

attachments. For critical and declining plans with a greater than 20% change in contributions, market value of 

assets, actuarial value of assets, total liabilities, current liability normal costs, benefit payments, or total 
 

PENSION BENEFIT GUARANTY CORPORATION 47 FY 202 2 | PROJECTIONS REPORT

headcounts compared to last year, data was obtained from the 2020 Schedule MB attachments or audit 

statements. For plans with less than 5,000 participants or plans otherwise not reviewed, an average of the 

larger plans noted above was used to estimate the withdrawal liability payments. This average was calculated 

separately for construction industry plans vs “other” plans – with “other” plans further categorized between 

green/endangered status plans and critical (including declining) status plans.

Data on regular ongoing employer contributions. For all plans, a per capita contribution rate based on 

the total contributions less withdrawal liability payments (whether actual or modeled) is calculated based on 

average active participant counts. Due to the potential distortion from the COVID-19 pandemic on 

Contribution Base Units (CBUs), the initial per capita contribution rate used to develop estimated 

contributions in future projection years is based on 2019 plan year data. 

Data used from SFA applications. For plans that have applied to PBGC for SFA, some of the cash flow 

data provided in Template 4 of the application was used in ME-PIMS for the FY 2022 projections. This 

includes projected benefit payments for retirees and terminated vested participants, which were extrapolated 

beyond plan year 2051 and calibrated to the current liability reported in the 2020 Schedule MB filing. It also 

includes the projected aggregate withdrawal liability payments. In addition to data from applications, the 

model incorporates data from the SFA Waiting List and lock-in applications to improve the estimated timing 

and amount of SFA payments for non-priority group plans.

Plans that have already been booked in PBGC’s financial statements. PBGC collects additional data for 

these plans, which is subject to confidential treatment requests under 29 CFR 4901.24. This information is 

used to supplement/override the data treatment described above.

ME-PIMS — General Methodology 

ME-PIMS projects PBGC’s potential financial position by combining simulated claims with simulated paths 

for premiums, expenses, PBGC’s investment returns, and changes in PBGC liability; that is, the present value 

of benefits and expenses payable pursuant to claims recognized by PBGC. The probability of any particular 

outcome is estimated by dividing the number of simulations with that outcome by 500, the number of

economic simulations for multiemployer plans.

In each simulation, the model generates 40-year projections for each plan under each of the 500 economic 

scenarios. The model first generates future benefit payment streams and future normal cost streams from a 

simulated census. These cash flow streams are then projected forward year by year, assuming experience 

matches the events modeled along each simulated path and that the demographics of future hires are the 

same as the current active distribution. Projected benefit accruals are adjusted to reflect assumed benefit 

formula changes (e.g., to a 1% of contribution formula or the removal of early retirement subsidies upon a 

plan entering critical status) and active population changes. 

There is typically a long lag between PBGC’s booking of a multiemployer plan and the start of PBGC’s 

financial assistance payments. Payments from PBGC begin only after the plan has depleted its assets. In MEPIMS’ simulation of the Multiemployer Program, a plan can be booked as a probable claim in one year of a 

projection and then, if the plan’s condition improves sufficiently in the simulation, it can become “unbooked” (in the model) in a later year. Conversely, a plan’s condition can deteriorate further following the 

booking.
 

PENSION BENEFIT GUARANTY CORPORATION 48 FY 202 2 | PROJECTIONS REPORT

ME-PIMS — Plan Sponsor Behavior With Respect to MPRA 

Multiemployer funding rules create situations where plans may make decisions based on funded status, 

projected insolvency, or other factors. These behavioral adaptations are modeled to a limited extent in MEPIMS.

The model assumes that plans in critical status will increase contribution rates and make other plan changes. 

These assumptions are different for critical status plans that are projected to receive SFA or to “exhaust all 

reasonable measures” in the future. All critical and declining status plans are assumed to have exhausted all 

reasonable measures.

The model also reflects suspensions of benefits and partitions for plans projected to be critical and declining 

after 2022 based on the simulated financial status of the plan in each simulation. Plans that are critical and

declining and do not receive SFA prior to 2030 are assumed to make a one-time decision in 2030 whether to 

apply for benefit suspensions and/or partitions based on the model’s assumptions regarding partition and 

benefit suspension probabilities. Plans projected to receive a partition remain in partition status throughout 

the projections. Plans that receive SFA are not eligible to apply for a benefit suspension or partition under 

MPRA. 

See the ME-PIMS Assumptions section below regarding Benefit Suspensions and Partition for further 

details.

ME-PIMS models SFA but does not separately model other forms of PBGC financial assistance, such as 

facilitated merger assistance.

ME-PIMS — Cash Flow Development 

ME-PIMS uses information reported on the Form 5500 to develop benefit payment projections by current 

participant status, which are calibrated to each plan’s reported current liability and benefit payments, as well 

as its normal cost. 

Active participant scatters and decrement assumptions were collected for approximately 900 plans for the FY 

2022 report. The model utilizes this data to simulate active census data for the remaining multiemployer plans 

based on industry and the plan’s active-to-inactive ratio. Cash flows for actives are generated based on the 

decrement for each of the active age and service cell combinations.

For inactive participants, a different process is used since inactive participant age/service data is not available 

for all plans. A simplified calibration process extrapolates inactive participants from a census distribution of a 

large multiemployer plan using each plan’s estimated accrual rates and inactive participant count. Across-theboard shifts in the largest multiemployer plan’s inactive census distribution by age and service are then 

applied to match the current liability reported on Schedule MB of Form 5500. This is done separately for 

terminated vested participants and for in-pay retirees and beneficiaries.

For plans that have applied to PBGC for SFA, the projected benefit payments for retirees and terminated 

vested participants provided in Template 4 of the application were used in the cash flow development 

process. The projected benefit payments were extrapolated beyond plan year 2051 and subsequently adjusted 
 

PENSION BENEFIT GUARANTY CORPORATION 49 FY 202 2 | PROJECTIONS REPORT

on a pro rata basis across all projection years to calibrate to the current liability reported in the 2020 Schedule 

MB filing.

ME-PIMS — Assumptions 

In addition to the economic variables described above, the modeling of changes to plan active populations is

stochastically projected:

Plan Demographics. Starting with the plan’s active participant population data from the Form 5500 

(grouped by age and service bands), the distribution of active participants for each plan in the future varies 

according to that plan’s actuarial assumptions regarding retirement, disability, and termination of 

employment. Age and service also vary over time due to hiring assumptions that are determined separately in 

each scenario of the projections. Hiring patterns vary with stochastic projections; the general assumption is 

that a plan’s historical hiring distribution continues and hiring occurs so that the size of the active population 

continues at the same trend after plan decrements (retirement, termination of employment, disability) take 

place. 

ME-PIMS does not currently assume industry-specific employment trends. The model incorporates annual 

variability, with the assumed rate of decline in the active multiemployer population depending on the plan’s 

zone status. The mean net decrease in the active multiemployer population per year across all simulated 

scenarios is as follows:

• Green Zone (Neither Endangered nor Critical) plans – 1.0%

• Endangered plans – 2.5%

• Critical plans – 3.0%

• Critical and Declining plans – 5.1%

These assumptions were developed based on a 2021 study of Form 5500 data spanning from 2010 through 

2019.

The following non-stochastic assumptions are also used in ME-PIMS projections:

Mortality. The model uses the Pri-2012 Blue Collar Mortality Table, projected to 2030 for retirees and 

beneficiaries and to 2037 for active and terminated vested participants with the MP-2021 Improvement Scale.

This table is the same table used in PBGC’s September 30, 2022, financial statements, and is based on a 

mortality experience study of PBGC-insured participants.

Additional temporary adjustments are assumed for anticipated excess mortality as follows: 2020: 18%, 2021: 

16%, 2022: 12%, 2023: 5%, 2024: 4%, 2025: 3%, 2026: 2%, 2027: 1%, 2028 and beyond: 0%. This 

assumption is based on the same mortality experience study of PBGC-insured participants, but was adopted 

after PBGC’s September 30, 2022, financial statements.

Credit Balances. Each plan’s credit balance is increased each year by the plan’s valuation interest rate and 

increased/decreased by the amount by which modeled contributions are greater/less than the minimum 

otherwise required.
 

PENSION BENEFIT GUARANTY CORPORATION 50 FY 202 2 | PROJECTIONS REPORT

Per Capita Contribution Rate Increases. The annual estimated per capita contribution growth rate is 

projected as follows:

• Green Zone (Neither Endangered nor Critical) plans – Assumes a rate of increase based on a target 

rate, with the increases capped at 5.0% per year for 12 years. The target rate, when multiplied by the 

active participant count, equals the normal cost plus a 12-year amortization of unfunded liabilities 

(ignoring credit balances) in three years from each projected valuation anniversary date. The current 

contribution rate is assumed to increase levelly over three years to achieve the target rate, subject to 

the maximum increase rates noted. Per capita contribution growth is lowered to national average 

wage increases (NAWI) after 12 years (or the cumulative cap is hit).

• Endangered plans – Assumes that plans implement a funding improvement plan that includes 

contribution rate increases estimated to avoid a funding deficiency and achieve a 33% better funded 

ratio in 10 years, with a maximum 8% per year increase in per capita contribution growth for up to 

12 years. Per capita contribution growth is lowered to inflation after 12 years, or when the cumulative 

cap is hit.

• Critical plans (except for those projected to receive SFA) – Assumes that plans implement a 

rehabilitation plan that includes contribution rate increases estimated to eliminate the funding 

deficiency and bring the plan to 80% funded in 10 years, with a maximum of 8% per year increase in 

per capita contribution growth for up to 12 years. Per capita growth is lowered to inflation after 12 

years, or when the cumulative cap is hit.

• Critical and Declining plans (except for those projected to receive SFA) – Assumes a flat 2.5% per 

year increase.

• Plans projected to receive SFA – Future contribution rates are assumed to remain level for 15 years, 

and then increase by NAWI thereafter.

Per capita contributions for all plans will be further limited to a multiple of the 2019 baseline per capita 

contribution (based on contributions divided by active participant count from the 2019 Schedule MB), after 

which inflation/wage growth becomes the underlying increase rate. The multiple is assumed to be 1.25 for 

plans that receive SFA, 1.50 for plans that are currently in Endangered or Critical status that do not receive 

SFA, and 2.00 for all other plans.

The above contribution rate increases apply until the plan is projected to become insolvent within 10 years;

no future increases are applied thereafter.

These assumptions were developed based on an analysis of historical Form 5500 Schedule MB data from 

2009 to 2018, as well as professional judgment related to the cumulative level of contribution rate increases 

that are deemed to be sustainable for plans.

Plan administrative expenses: Expenses are calculated as prior year administrative expenses, excluding 

investment expenses, increased by 2% per year, and capped at a percentage of each year’s projected benefits 

(the cap ranges from 6% to 15%, depending on plan size). The increase in the flat rate premium to $52 in 

2031 (an increase of approximately $7) is added to the above-calculated expense starting in 2031. This 

assumption is consistent with PBGC’s assumptions guidance for SFA calculations.
 

PENSION BENEFIT GUARANTY CORPORATION 51 FY 202 2 | PROJECTIONS REPORT

Benefit Improvements. For green zone plans with a flat dollar benefit formula, benefit increases are 

assumed to track changes in wages over time. Only future service benefits are increased – no past service 

benefit improvements are assumed. 

Benefit Improvement Restriction. It is assumed that critical and endangered status plans do not adopt 

future benefit improvements due to restrictions under Rehabilitation Plans or Funding Improvement Plans, 

respectively.

Withdrawal Liability Payments. For currently terminated and insolvent plans and certain previouslybooked plans, a schedule of payments is received from the plan administrators – such payment schedules are 

then discounted for the possibility of non-payment (predominately due to the potential bankruptcy of a 

withdrawn employer). The scheduled payments are assumed to “decay” by 2% per year. For all other plans, 

the prior year actual or modeled withdrawal liability payments are assumed to decline by 30% in the first year 

(recognizing the one-time nature of lump sum settlements of withdrawal liability that are or may be included 

in the total withdrawal liability payments) and phase-out over 15 years. Future withdrawals are modeled, and 

such payments are assumed to phase-out over 20 years. These assumptions were based on internal studies 

conducted by PBGC based on the payment information for terminated and insolvent plans.

Mass Withdrawal. In the model, no plans are assumed to go through mass withdrawal prior to insolvency. 

Upon insolvency, 60% of plans are assumed to go through mass withdrawal; the remaining 40% of plans are 

assumed to remain ongoing. These percentages are based on recent experience. In the case of mass 

withdrawal, initial year payment assessments by the plan from withdrawn employers are estimated at 120% of 

the most recent projected year regular contributions, with an adjustment to remove contribution rate 

increases made after 2014 while the plan is in Endangered or Critical Status. It is assumed that only 70% of 

employers will commence withdrawal liability payments in the first year. After the first year, withdrawal 

liability payments are assumed to decay over 20 years from the first year. The assumptions about mass 

withdrawal liability payments were based on studies conducted by PBGC from the payment information for 

terminated and insolvent plans and specific payment information. In the case of an ongoing insolvent plan, 

contributions are assumed to decline by 10% (from the prior year) in the first year of insolvency, and then 

decrease by 5% per year thereafter.

PBGC Premiums. Premiums are paid in accordance with current law (including the increase in the flat rate 

premium to $52 in 2031 under ARP) out of plan assets. There is no allowance for write-offs of uncollectable 

premiums or for the fact that a portion of the premium collected is not credited with interest under MPRA.

Discounting Future Claims. Future claims are valued using a single-equivalent interest discount factor 

(under each scenario) that models the curve of interest factors described in PBGC’s financial statements 

(using the simulated long-term corporate bond rate generated for the particular year and economic path 

minus 68 basis points). Those factors are based on a survey of private-sector annuity market prices, and the 

68 basis-point adjustment was developed based on internal analysis of the relationship between the long-term 

corporate bond rate and the single-equivalent interest discount factor.

Assumptions about Benefit Suspensions and Partitions. By law, plans receiving SFA are not permitted to 

implement suspensions or partitions. For non-SFA plans, it is assumed that there is a 12% likelihood that a 

critical and declining status plan (if it is projected to meet the long-term insolvency test without a partition) 

will apply for suspension alone; and a 3% likelihood that it will apply for both a benefit suspension and a 

partition (if it is also projected to pass the long term loss test, it is assumed that it can also pass the “non-
 

PENSION BENEFIT GUARANTY CORPORATION 52 FY 202 2 | PROJECTIONS REPORT

impairment test”). The test is done only in 2030. These probabilities were estimated based on the ratio of 

plans with approved MPRA applications to the total number of eligible plans from 2016 to 2020. The 

determination of benefit suspension and partition amounts is based on the following process and 

assumptions:

• In a partition, the guaranteed portion of benefits for some participants is spun off to a separate, 

insolvent plan, for which PBGC will provide financial assistance. PIMS uses the input cash flows to 

calculate the maximum suspension level (110% of PBGC’s guarantee, with special protections for 

certain retirees).

• The assumed average return on plan assets used in MPRA solvency tests is 5%.

• Plans that have gone through a benefit suspension will be re-tested every five years. Deterioration in 

financial conditions will allow plans to further suspend benefits up to a limit of 110% of PBGC’s 

guarantee. To be conservative, a lower asset return of 4.5% is used to test for suspension percentage 

changes.

Assumptions specific to SFA determination: The FY 2022 ME-PIMS projection assumes that all plans 

that become eligible for SFA by the 2022 plan year will apply. Plans that are very close to meeting the 

eligibility criteria under ERISA section 4262(b) based on information currently available may become eligible 

based on actual circumstances that arise in their 2022 plan years. To account for this possibility, ME-PIMS 

uses modified eligibility criteria:

• For purposes of determining a plan’s zone status for SFA eligibility (only if a plan’s zone status for a 

particular year is not included in the data for plan years 2020 through 2022 as provided by the IRS):

o Projected contributions are reduced by 5% per year for the first two years, and

o The solvency threshold for determining critical and declining status is changed to 25 years 

instead of 20 years.

• The threshold for modified funding percentage is changed to 45% instead of 40%.

For plans that have submitted an application to PBGC as of March 11, 2023, but have not yet been approved, 

payment is assumed to be made in calendar year 2023. For plans that have not yet applied for SFA but are 

expected to be eligible, the assumed timing of SFA application submissions is based on the SFA Waiting List 

posted on PBGC’s website as of March 13, 2023, as follows: the first 10 plans on the list are assumed to be 

paid in calendar year 2023, the next 44 plans are assumed to be paid in calendar year 2024, and all other plans 

are assumed to be paid in calendar year 2025. For modeling simplicity, all SFA applications are assumed to be 

approved in the first filing.

ME-PIMS only estimates SFA amounts stochastically for plans that have not yet applied to PBGC as of 

March 11, 2023. For plans that have already applied, ME-PIMS uses the amount requested in the most recent 

application, whether or not the application has been approved, with interest to the assumed payment date.

For plans that have not yet applied to PBGC as of March 11, 2023, ME-PIMS is programmed to replicate a 

plan’s SFA application in each model scenario under which the plan is projected to be eligible for SFA. The 

initial data used as the basis for the application’s SFA calculation is based on the ME-PIMS stochastic 

projection to the assumed application date (which is March 2023 for applicable plans that submitted lock-in 
 

PENSION BENEFIT GUARANTY CORPORATION 53 FY 202 2 | PROJECTIONS REPORT

applications by March 13, 2023). The SFA is then calculated using a deterministic projection based on 

assumptions as follows:

• Interest Rates:

o For non-SFA assets, the lesser of 5.85% or the interest rate shown on the 2019 Schedule MB. 

The 5.85% rate is rounded based on the third segment rate as of December 31, 2022, plus 200 

basis points (per ERISA section 4262(e)(3)).

o For SFA assets, the lesser of 3.75% or the interest rate shown on the 2019 Schedule MB. The 

3.75% rate is rounded based on the average of first, second and third segment rates as of 

December 31, 2022, plus 67 basis points.

• CBU decline after the measurement date: 2% per year for the first 10 years, 1% per year thereafter.

• Contribution rate increases after measurement date: none.

• Mortality: the same mortality assumption used for other ME-PIMS projection purposes.

• Administrative expenses: the same administrative expenses assumption used for other ME-PIMS 

projection purposes.

• Withdrawal liability payments – same as the standard ME-PIMS assumptions. This assumes that 

future employer withdrawal experience for plans that receive SFA is not impacted by the receipt of 

SFA, which is consistent with intent of the conditions placed on withdrawal liability calculations 

under PBGC’s final rule. 

• Other assumptions: no changes from the assumptions used for other ME-PIMS projection

purposes.

The assumptions used for the estimated SFA calculations are consistent with PBGC’s SFA assumptions 

guidance document. The SFA and non-SFA interest rates are based on those determined for March 2023 

applications due to the significant number of lock-in applications submitted on March 13, 2023.

Plan Demographics to Facilitate Cash Flow Modeling. To determine cash flows, ME-PIMS utilizes the

following assumptions:

• Proportion of population assumed to be male: 75%.

• Age difference: females three years younger than their male spouses.

• Proportion of active population assumed to elect a joint and survivor payment form: 60%.

• Proportion of current retirees assumed to be receiving a joint and survivor payment form: 30%.

• Proportion of terminated vested participants assumed to elect a joint and survivor payment form: 

35%.

• Joint and survivor payment form: joint and 50% survivor benefit.

• Proportion of participants assumed married for pre-retirement death benefit: 80%.
 

PENSION BENEFIT GUARANTY CORPORATION 54 FY 202 2 | PROJECTIONS REPORT

• Conversion factors based on PBGC rates for the joint and 50% survivor benefit: 0.9150 for both 

male and female participants.

Bipartisan American Miners Act. This legislation authorized regular federal funding for the United Mine 

Workers Association 1974 Pension Plan and amended current law provisions related to federal funding for 

United Mine Workers retiree health benefits. Since federal funding is the principal source of solvency for this 

plan going forward, solvency projections for this plan are sensitive to variations in the expected amounts of 

future federal transfers to the plan. However, the amounts of future federal funding available for the United 

Mine Workers Pension Plan are not known with certainty because the amounts available for the pension plan 

depend on the amounts needed each year by certain United Mine Worker retiree health plans, among other 

things.

Estimated expected transfers to United Mine Workers Plan used for the projections in this report are the 

same as those forecasted in the 2024 President’s Budget.46F

47 There are no estimates of transfers to the pension 

plan beyond FY 2033, so for purposes of the projections in this report, the estimated transfer amount is 

assumed to stay level after FY 2033 until the United Mine Workers Plan is fully funded. 

SE-PIMS

SE-PIMS — Overview 

The amount of PBGC’s claims under the Single-Employer Program depend on two factors: (1) the 

underfunding in pension plans that PBGC insures (i.e., exposure) and (2) the likelihood that corporate 

sponsors of these underfunded plans will encounter financial distress that results in bankruptcy and plan 

termination (i.e., the probability of claims). Claims are sensitive to interest rates and investment returns, 

contributions, benefit changes, industry changes, and economic conditions which impact bankruptcies.

SE-PIMS starts with PBGC’s current net financial position and data on the funding status of close to 500 of 

the largest plans, with results for this group scaled up to represent the full single-employer universe. The 

model produces 5,000 simulations (500 economic paths for each of the 10 bankruptcy simulations). The 

probability of any particular outcome is estimated by dividing the number of simulations with that outcome 

by 5,000. The model uses funding and premium rules as prescribed by current law.

SE-PIMS — Data 

SE-PIMS uses the data for over 500 actual plans, sponsored by more than 300 companies. These plans

represent over half of PBGC’s insurance exposure in the single-employer defined benefit system measured 

from the 2020 Form 5500 filings. SE-PIMS also reflects contribution data from later years’ Form 5500 filings 

to the extent available when the initial results are generated. 

The database includes:

47 As shown in Item 601 “General Retirement and Disability Insurance” as part of Table 21-12 available here: 21-12_fy2024.pdf 

(whitehouse.gov)
 

PENSION BENEFIT GUARANTY CORPORATION 55 FY 202 2 | PROJECTIONS REPORT

• Plan demographic statistics, 

• Plan benefit structure, 

• Asset values, 

• Liabilities, 

• Actuarial assumptions, and

• Plan sponsor financial information. 

Plan data are downloaded from Schedules SB, R, H, and I of the most recent Form 5500 into the PIMS 

database. In addition, information on plan provisions, demographics of active workers, and plan assumptions 

for future demographic changes are manually entered and reviewed against signed forms and attachments. If 

demographic information is missing for a particular plan, data from other plans of similar size, demographics, 

or industry is used for that plan. 

The plans included are primarily those with the largest plan liabilities where (1) sufficient data is available on 

the sponsor for the SE-PIMS bankruptcy probability model and (2) plan details can be sufficiently captured in 

the SE-PIMS model. 

Financial and market data on firms is obtained from Compustat which is provided by S&P Global Market 

Intelligence and linked to plan sponsors. Where there is missing data for a plan sponsor, data is imputed using 

industry averages, averages for plan sponsors of comparable size, or other measures.

Historical economic data is gathered from the Federal Reserve Economic Database tables, Interest Rate 

Tables provided by the Internal Revenue Service, and SBBI® Yearbooks. Data on PBGC’s historical financial 

position is based on PBGC sources, which also supply the information published in PBGC’s Data Tables. 

PBGC reviews the economic inputs (annual returns of stock and bond market indices, other historical data, 

generated stochastic paths), regulatory inputs (various Internal Revenue Code pension plan limits and 

information regarding CPI and national average wage growth), firm data (plan affiliation, firm economic data, 

weight as part of sample universe), and plan data (Form 5500 data and adjustments) for missing or 

inconsistent data. 

SE-PIMS — General Methodology 

The SE-PIMS sample is weighted (scaled up) to represent the full universe of PBGC-insured, single-employer 

plans. The weighted sample represents total liabilities and underfunding, and the distribution of funding levels

among plans in the PBGC-insured universe based on data available as of the preceding spring. SE-PIMS 

simulates contributions, premiums, and underfunding for these plans.

The weighting process uses scaled copies of the plan sponsors’ business (called “partners”) and their pension 

plans. Each partner begins each simulation with the financial conditions copied from their source sponsors 

but are scaled in relation to the size of each sponsor’s balance sheet entries and employment. The financial 

conditions and bankruptcy experience for each partner is projected separately. Because the SE-PIMS sample 

is drawn from larger than average plans and corporations, each partner (sponsor and plan size) is scaled to 

one-fifth the size of its source. The one-fifth ratio was estimated to be the approximate ratio of the average 
 

PENSION BENEFIT GUARANTY CORPORATION 56 FY 202 2 | PROJECTIONS REPORT

size for all publicly traded defined benefit plan sponsors not included in the PIMS sample to the average size 

of the plan sponsors in the SE-PIMS sample.

Partners are allocated to sponsors in SE-PIMS to create a weighted sample that approximates the distribution 

of plan liabilities by funding status in the insured universe. For example, the weighted sample’s total value of 

plan liabilities among plans that are 70 to 80% funded is compared to the same total for the insured universe, 

and similarly for plans that are 60 to 70% funded (if any), 80 to 90% funded, 90 to 100% funded, etc. 

Partners are allocated for the best fit to the entire distribution.

SE-PIMS also uses each employer’s financial information as the starting point for assigning probabilities of 

bankruptcy.

Projections of claims against the Single-Employer Program are made stochastically. Claims are modeled by 

simulating the occurrence of bankruptcy for plan sponsors. The model reflects the relationship from 1980 to 

1998 between the probability of bankruptcy and variables representing financial health, such as debt-to-equity

ratio, cash flow, firm equity, and employment.47F

48 For each period, the model assigns random changes in each 

of these variables for each firm, which are correlated with changes in the economy. The simulated financial 

health variables determine the probability of bankruptcy for that year.

SE-PIMS models contributions from plan sponsors based on meeting minimum funding requirements, 

avoiding VRPs, maintaining, or regaining prior funding levels (based on liability measurements used in 

corporate financial accounting), and incentives to attain a funding threshold that eliminates restrictions on the 

accelerated benefit payments. When sponsors are simulated to experience bankruptcy, the model retroactively 

overrides modeled contributions for the three years prior to bankruptcy to assume zero contributions for 

those years.

SE-PIMS — Assumptions 48F

49 

The following variables are stochastically projected:

Sponsor Financial Health Variables. Equity-to-debt ratio, cash flow, firm equity, and employment.

Active Hiring Patterns. Starting with plans’ population data from Form 5500, the distribution of active 

participants for a plan varies throughout the forecast according to that plan’s actuarial assumptions regarding 

retirement, disability, and termination of employment. Age and service also vary over time due to hiring 

patterns that are determined separately in each simulated path of the projections. Unless the plan is closed to 

new entrants, PIMS assumes a stationary mean active participation level for the plan. The distribution of ages 

and benefits for retired and terminated vested participants are imputed from long-term projections of the 

starting active population and normalized to the actual counts furnished by the Schedules SB. For simplicity, 

all participants are assumed to be male and are assumed to elect straight life annuities.

48 The FY 2017 independent PIMS peer review, required by the Moving Ahead for Progress in the 21st Century Act (P.L. 112-141), 

titled “Bankruptcy and Mass Withdrawal Modeling in PIMS”, dated October 1, 2019, collected updated bankruptcy data through 2017 

which verified the appropriateness of the model assumptions. 

49 For additional information on SE-PIMS and the assumptions used in running the model, see 

https://www.pbgc.gov/sites/default/files/legacy/docs/PIMS-Overview-2011.pdf.
 

PENSION BENEFIT GUARANTY CORPORATION 57 FY 202 2 | PROJECTIONS REPORT

Probability of Bankruptcy. Sponsors are subject to a random chance of bankruptcy in each year of the 

projection. The probability of bankruptcy is based on the relationship between bankruptcies and various 

measures of companies’ financial health. The bankruptcy risks generated for PIMS are compared to market 

indices, and the largest outliers have their modeled risk recalibrated to equal the mean of the market estimate 

of bankruptcy risk for their class of bonds. Bankruptcy probability formulas generally do not vary by 

industry.49F

50 In bankruptcy, plans with modest levels of underfunding are less likely than severely underfunded 

plans to result in claims on PBGC. Thus, for modeling purposes, a plan presents a loss to participants and/or 

the pension insurance program if its sponsor is simulated to experience bankruptcy and the plan is less than 

80% funded on a termination liability basis. If the sponsor of a plan is simulated to experience bankruptcy 

and the plan is more than 80% funded on a termination liability basis, the plan is assumed to be terminated 

through the standard termination process without becoming a claim for PBGC. The assumed 80% threshold 

used for this purpose was developed based on internal PBGC analysis of historical claims experience.

Voluntary Standard Terminations of Pension Plans. In addition to the above-mentioned standard 

terminations related to bankruptcy, SE-PIMS assumes some plans will choose to go through the standard 

termination process. The probability of a voluntary standard termination is determined using a regression 

formula, based on the funded level of the plan, participant count, and whether the plan continues to offer 

future benefit accruals.50F

51

Retiree Annuity Purchases. In each projection year, for plans that have an AFTAP of at least 80%, SEPIMS assumes that there will be an 8% chance that the plan will undergo a bulk retiree annuity buy-out 

transaction to transfer 40% of its retiree liability to an insurance company. No more than 50% of plan assets 

is assumed to be available for an annuity purchase transaction. Additionally, the model constrains each plan to 

no more than one such event during the projection. This assumption is based on an internal analysis of the 

de-risking information provided in the most recent several years of premium filings and the observed trend in 

participant count changes.

The following non-stochastic assumptions are also used in SE-PIMS projections:

Adjustment to Claims Amount. When sponsors are simulated to experience bankruptcy, the model 

retroactively overrides modeled contributions for the three years prior to bankruptcy to assume zero 

contributions for those years. The model then assumes PBGC recovers 5% of the resulting gross claim 

amount.

Mortality.51F

52 For the present value of PBGC benefit payments in the initial year of the projection: the Pri2012 Total Dataset Combined Employee/Retiree Mortality Table with specific ten-year age band adjustments 

from age 55 to 104, projected generationally using mortality improvement scale MP-2021. This table,

including the specific ten-year age band adjustments, is the same table used in PBGC’s September 30, 2022,

financial statements. It is based on a mortality experience study of PBGC-insured participants.

50 SE-PIMS makes an exception for the financial and utilities industries, where relatively high degrees of leverage are considered not to 

signal a risk of bankruptcy. SE-PIMS also increases the bankruptcy probabilities of a few large companies whose model probabilities 

greatly underestimate the risk of bankruptcy as measured by their bond ratings.

51 Based on the “preferred” approach described on pages 38-39 of the PIMS Peer Review report entitled “Single-Employer Risk 

Transfer Activities”: https://www.pbgc.gov/sites/default/files/se-risk-transfers.pdf

52 PBGC uses a mortality table based on the actual experience of trusteed plan populations with generational projections to determine 

the pension benefit liability in the Annual Report.
 

PENSION BENEFIT GUARANTY CORPORATION 58 FY 202 2 | PROJECTIONS REPORT

For the present value of PBGC benefit payments after the initial year of the projection: the same mortality

table described above with the ten-year age band adjustments revised to reflect experience only through 2019 

(i.e., prior to COVID-19). Additional temporary adjustments are assumed for anticipated excess mortality as 

follows: 2023: 5%, 2024: 4%, 2025: 3%, 2026: 2%, 2027: 1%, 2028 and beyond: 0%. This assumption is based 

on the same mortality experience study of PBGC-insured participants, but was adopted after PBGC’s 

September 30, 2022, financial statements.

For the sample plans’ year-by-year experience mortality: the same mortality table as in the immediately 

preceding paragraph. Since SE-PIMS is only able to model one set of assumptions for experience mortality, 

the table is being used retroactively prior to 2023 with the following temporary adjustments for assumed 

excess mortality: 2020: 18%, 2021: 16%, 2022: 12%. The excess mortality rates for these years were based on 

the excess mortality rates published by the Society of Actuaries in Section 3.2 of the RPEC 2022 Mortality 

Improvement Update.

For purposes of determining minimum funding requirements: RP-2006 male (with separate annuitant and 

non-annuitant tables) generationally projected from 2006 using the following mortality improvement scales:

• MP-2021, with annual improvement rates capped at 0.78%, for valuation date occurring during or 

after 2024 (based on SECURE 2.0).

• MP-2021, excluding any 0.78% mortality improvement caps, for the period 2021 through 2023.

• MP-2018 for calibrating to the 2020 (or earlier) Schedule SBs.

As of this report, MP-2021 is the most recent mortality improvement scale published by the SOA. The above 

assumption was selected to incorporate changes to the prescribed mortality basis under Section 430 in a 

framework that is viable under the parameter constraints of the SE-PIMS model.

It is assumed that plans that reported use of a substitute mortality table use mortality rates 9% higher than the 

otherwise assumed funding mortality table. 52F

53

Contributions and Credit Balances. Contributions are assumed to be driven by incentives such as 

complying with minimum funding requirements, reducing the VRP, and maintaining funded status at certain 

levels that are potentially based on accounting, termination, or other liability measures. The primary funded 

ratio measure assumed to drive contribution behavior is the vested benefit liability (VBL) used to determine 

the VRP. The statutory minimum required contribution (reflecting maximum allowable credit balance usage) 

is assumed to be a floor. For plan sponsors that experience bankruptcy in the projections, contributions for 

the three years prior to bankruptcy are reduced to zero.

Plans that are not required to pay a VRP because of funding above 100% of the VBL are assumed to be 

motivated by different factors than plans that have not funded to that level. The VBL funded level changes 

throughout the projection period, thus the factors motivating contribution behavior and the parameters used 

to determine projected contribution amounts also change.

Plans funded above 100% of the VBL within the last three years are assumed to make the largest of the 

following contributions.

53 The 9% mortality load assumption for plans using substitute tables for funding is based on a PBGC analysis conducted October 

2015 that relies on data regarding variation in mortality by plan from the Society of Actuaries RP-2000 mortality study.
 

PENSION BENEFIT GUARANTY CORPORATION 59 FY 202 2 | PROJECTIONS REPORT

• Normal cost based on the premium interest rate (a proxy for accounting service cost); 

• The amount needed to eliminate a portion of the VBL deficit relative to the highest VBL funded 

ratio in the last three years – 30% of the deficit for plans funded below 110% of VBL, 20% for plans 

funded above 115% of VBL, otherwise 25%; or

• For plans in which the VBL funded percentage falls below 100%, the amount needed to fully fund 

the VBL over 1-4 years for plans funded above 80% of VBL, or over 7-10 years for plans funded 

below 80% of VBL.

Sponsors of plans that have not been funded above 100% of the VBL in any of the past three years are 

assumed to make contributions that reflect a combination of possible contribution behaviors based on the 

plan’s Adjusted Funding Target Attainment Percentage (AFTAP) or VBL funded ratio, as shown in the tables 

below. The combination of contribution behaviors represents that plan sponsors in the same circumstances 

may use different contribution approaches. 

• Sponsors of plans that have an AFTAP below 80% make contributions based on the following 

combinations of possible contribution behaviors: 

AFTAP

Contribution Behavior 

Percent of Plan Sponsors Assumed to Use Behavior

Increase AFTAP

to 80%

Minimum Required 

Contribution (MRC) only, 

using 90% of available credit 

balance

0% - 70% 0% 100%

70% - 75% 50% 50%

75% - 80% 100% 0%

• All other sponsors of plans make contributions based on the following combinations of possible 

contribution behaviors:

The VRP factor is based on the “effective” VRP rate, i.e., the VRP rate adjusted for the impact of the VRP 

cap. The VRP factor is equal to 50% if the effective VRP rate is $30 per $1,000 unfunded VBL, and is 

adjusted upwards for higher VRP rates, with all plans assumed to immediately fully fund the VBL if the VRP 

Contribution Amount Contribution Behavior

Sum of the two contribution 

behaviors times the VRP factor 

Fully fund VBL over 1-4 years for plans 

above 80% VBL funded, over 7-10 years 

for plans below 80% VBL funded 

Eliminate 30% of the deficit relative to 

highest VBL funded ratio in last 3 years 

Plus: this behavior times [100% 

minus the VRP factor] MRC, using 90% of available credit balance
 

PENSION BENEFIT GUARANTY CORPORATION 60 FY 202 2 | PROJECTIONS REPORT

rate ever reaches $100. The VRP factor is adjusted downwards for VRP rates lower than $30 with no plans 

funding toward the VBL at a VRP rate of $0.

Actual contributions for 2021 and 2022 were incorporated for plans that had more recent filings than the

2020 Form 5500.

The assumption for plan contribution levels was based on an internal PBGC analysis, summarized by a 

February 2021 memorandum available on PBGC’s website.53F

54

Form of Payment. Except for certain cash balance plans, SE-PIMS assumes all benefits will be paid as single 

life annuities. It is assumed that cash balance plans will pay participants the full accrued benefit (i.e., the 

account balance) as a lump sum upon termination or retirement unless benefit restrictions apply (see below).

Benefit Improvements. For flat-dollar plans, benefit multipliers are assumed to increase annually by the rate 

of inflation and productivity growth. For salary-related plans, the benefit formula is assumed to remain 

constant, but annual salary increases are reflected based on the rate of inflation, productivity growth, and a 

factor representing merit and seniority. 

Benefit Restrictions. The statute provides that certain benefit restrictions apply if a plan’s AFTAP is less 

than a specified percentage and unadjusted assets are less than Target Liability. Liabilities underlying the 

AFTAP calculation are determined using stabilized discount rates. Assets are generally the actuarial value of 

assets, reduced by credit balances when the actuarial value of assets does not exceed liabilities. The benefit 

restriction provisions of section 436 of the Internal Revenue Code are reflected as follows:

• Benefit Improvement Restriction. The benefit improvement restriction applies to benefit increases

above the average wage increase and PIMS projects benefit increases at the same rate as wage 

increases, so the benefit improvement restriction is not applicable for SE-PIMS. 

• Lump Sum Payment Restriction. The lump sum benefit payment restriction is reflected to the extent 

a cash balance plan is projected to have an AFTAP below 80%.

• Benefit Accrual Restriction. Plans with funding percentages below 60% are assumed to freeze 

benefits and to remain frozen even if the percentage increases above 60% in the future.

Credit Balance Waivers. Because assets underlying the AFTAP calculation are reduced by credit balances 

unless assets exceed liabilities (see above), sponsors are permitted, or in some cases required, to reduce 

(“waive”) credit balances to the extent needed to avoid benefit restrictions. SE-PIMS assumes that sponsors 

will choose to waive credit balances to the extent necessary to avoid freezing benefits when funding drops 

below the 60% threshold. In addition, because cash balance plans are assumed to pay the full accrued benefit 

as a lump sum, such plans are assumed to waive credit balances to the extent necessary to achieve 80%

funding, if possible.

PBGC Premiums. SE-PIMS models premiums based on current law, including the freeze of the VRP rate 

included as part of SECURE 2.0. There is no allowance in premium projections for write-offs of 

uncollectable premiums. Premiums are assumed to be paid by the employer rather than from the plan assets.

Furthermore, it is assumed that 64% of premiums expected for plan years beginning in a calendar year are 

reflected as premiums receivable in PBGC financial statements at September 30th of the same year.

54 The memo is available at: https://www.pbgc.gov/sites/default/files/contribution-policy-assumption-memo.pdf
 

PENSION BENEFIT GUARANTY CORPORATION 61 FY 202 2 | PROJECTIONS REPORT

PBGC Guarantee Limits. SE-PIMS models the level of benefits that PBGC will pay in projected claims as 

the lesser of participants’ vested benefit levels and PBGC’s maximum guarantee level. Circumstances where 

benefits might be further limited, or where PBGC might be required to pay more than the maximum benefit 

guarantee level, are not modeled. 

PBGC’s Assets. PBGC’s investment policy as of September 30, 2022, is assumed to remain unchanged, with 

15% allocated to return-seeking assets throughout the projection period.54F

55

Discounting Future Claims. Future claims are discounted with a single interest factor (under each scenario) 

representing the curve of interest factors described in PBGC’s financial statements (using the simulated longterm corporate bond rate generated for the particular year and economic path minus 68 basis points). Those 

factors are based on a survey of private-sector annuity market prices.

Determining Discounted Future Present Values Shown in Report Tables. For results presented as 

present values in this report, the discount rate used to adjust nominal values is the simulated 30-year Treasury 

rate generated for the particular year and economic path.

55 PBGC’s investment policy can be found here: https://www.pbgc.gov/sites/default/files/april-2019-ips-pbgc.pdf
 

PENSION BENEFIT GUARANTY CORPORATION 62 FY 202 2 | PROJECTIONS REPORT

SAMPLE STATISTICS FROM FY 2022 RUNS IN ME-PIMS AND SE-PIMS

The following tables show selected output statistics from runs of ME-PIMS and SE-PIMS for this report. 

Figure A-1 

Arithmetic Means, Standard Deviations, and Correlations of Key Financial Market Values

FY 2022 Single-Employer Model Runsa 

(Across 2023-2032 for 500 Economic Paths)

Long-Term

Treasury Yield

Return on 30-year 

Treasury Bonds

Stock Market

Return

Arithmetic Mean 3.3% 4.4% 9.4% 

Standard Deviation 1.1% 8.9% 20.0%

Correlations:

Long-Term Treasury Yield 1.00 -0.29 -0.01 

Return on 30-year Treasury Bonds 1.00 0.20

Stock Market Return 1.00

a) ME-PIMS yields economic returns within 0.1% and correlations within 0.02 of the single-employer results. 

Figure A-2 

Arithmetic Means and Standard Deviations of Market Rates Derived from Projected 

Long-Term Treasury Yields

FY 2022 Single-Employer and Multiemployer Model Runs

Long-Term

Corporate Rate Inflation Rate

Wage, Salary, and Flat 

Benefit Growth Rate

Arithmetic Mean 4.5%a 2.7% 3.9% 

Standard Deviation 1.1% 1.3% 1.3% 

a) The discount rate used to value PBGC liabilities and claims is this rate less 68 basis points for both insurance programs.
 

PENSION BENEFIT GUARANTY CORPORATION 63 FY 202 2 | PROJECTIONS REPORT

Figure A-3 

FY 2022 Model Projected Plan Returns

Single-Employer Multiemployera

Arithmetic Mean 6.5% 7.8% 

Geometric Mean 6.0% 6.9% 

Standard Deviation 10.2% 14.9% 

a) The projected plan return shown for ME-PIMS is for assets in non-SFA plans. 

Figure A-4 

Projected Annual Bankruptcy Probabilitiesa

FY 2022 Single-Employer Model Runs

Arithmetic Mean 0.7% 

Standard Deviation 1.7% 

a) The bankruptcy probability modeling methods and results are described in 

Boyce, S. and Ippolito, R.A. (2002), The Cost of Pension Insurance. Journal of 

Risk and Insurance, 69: 121–170. doi: 10.1111/1539- 6975.00012.

Figure A-5 

Annual Rate of Plans’ Projected Insolvency

FY 2022 Multiemployer Model Runs

Arithmetic Mean 0.2% 

Standard Deviation 0.2% 
 

PENSION BENEFIT GUARANTY CORPORATION 64 FY 202 2 | PROJECTIONS REPORT

CHANGES FROM THE PRIOR YEAR

FY 2022 ME-PIMS includes the following changes from the FY 2021 Projections Report:

Model Improvements. FY 2022 ME-PIMS model was updated to conduct a more precise projection of 

assets from the amount reported in the Form 5500 Schedule H data to the initial projection year using planspecific asset allocation data from the Form 5500 Schedule R data.

Data used from SFA applications. For plans that have submitted an application to PBGC for SFA, some 

of the cash flow data provided in Template 4 of the application was used within the ME-PIMS model for the 

FY 2022 projection. This includes projected benefit payments for retirees and terminated vested participants, 

which were extrapolated beyond plan year 2051 and calibrated to the current liability reported in the 2020

Schedule MB filing. It also includes the projected aggregate withdrawal liability payments. In addition to data 

from full, submitted applications, the model incorporates data from the SFA Waiting List and lock-in 

applications to improve the estimated timing and amount of SFA payments for non-priority group plans.

Per Capita Contribution.

The annual estimated per capita contribution growth rate assumption changed for the Green Zone plans

(Neither Endangered nor Critical) as follows:

• The rate of increase cap changed from 6% to 5%, and

• The minimum increase, which was based on the recent five-year historical average increase rate as of 

the valuation date, was eliminated.

Cumulative per capita contribution cap assumption was changed as follows:

• The base year changed from 2009 to 2019, and 

• The multiplier assumption changed from 2.5 for all plans to vary as follows: (a) 1.25 for plans that 

receive SFA, (b) 1.50 for plans that are currently in Endangered or Critical status that do not receive 

SFA, and (c) 2.00 for all other plans.

Mass Withdrawal. The initial year payment assessments by the plan from withdrawn employers, which are 

assumed to be 120% of the most recent projected year regular contributions, were updated to include an 

adjustment to remove contribution rate increases made after 2014 while the plan is in Endangered or Critical 

Status.

Mortality Assumptions. The mortality assumptions used to calculate the present value of PBGC financial 

assistance payments, and for modeling year-to-year projected mortality experience in the ME-PIMS 

projections, now reflect the result of a mortality experience study and our expectations around the phase-out 

of recent excess mortality. See the first few paragraphs of the “Mortality” discussion under the “ME-PIMS —

Assumptions” section for additional details. The mortality improvement scale was updated from MP-2020 to 

MP-2021. The mortality improvement projection period for active and terminated vested employees changed 

from 15 to 8 years.

FY 2022 SE-PIMS includes the following changes from the FY 2021 Projections Report:

Model Improvements. Several programming refinements were made to the SE-PIMS model for FY 2022:
 

PENSION BENEFIT GUARANTY CORPORATION 65 FY 202 2 | PROJECTIONS REPORT

• An adjustment was made to reflect that 64% of premiums expected for calendar year plan years are 

counted as accrued assets in the September 30th financial statements rather than not including 

receivable premiums.

• Improvements were made to the logic for when plan sponsors would elect to change their premium 

filing method when interest rates change;

• A one-year shift in the wage growth years used for indexing premium rates was corrected;

• Refinements were made to more properly reflect frozen service and the accrued-at-normal retirement 

age limitation for plans with temporary supplements; and

• The ability to model retiree annuity purchases (discussed in next paragraph) was added this year.

Retiree Annuity Purchases. SE-PIMS now assumes an 8% probability each year that a plan will enter into a 

retiree annuity buy-out transaction to transfer 40% of its retiree liability to an insurer if the plan had an 

AFTAP of at least 80% prior to the transaction (the model allows the transaction to cause the funded ratio to 

fall below 80% without requiring immediate contributions to fund back to 80%). This assumption is 

constrained to no more than one such event occurring per plan during the projection. Also, no more than 

50% of plan assets is assumed to be available for such annuity purchases. This is based on an internal analysis 

of the de-risking information provided on the most recent several years of premium filings and observed 

trend in participant counts.

SECURE 2.0 Provisions. SE-PIMS now reflects SECURE 2.0’s freezing of the VRP rate at $52 per $1,000

of unfunded vested benefits. It also incorporates a 0.78% cap on the rate of annual mortality improvement 

assumed beyond a plan’s valuation date, for purposes of minimum funding valuations after 2023. This also 

applies to the assumed mortality used in measuring unfunded liabilities to determine VRPs.

Mortality Assumptions. The mortality assumptions used to calculate the present value of PBGC benefit 

payments, and for modeling year-to-year projected mortality experience in the SE-PIMS projections, now 

reflects the result of a two-part mortality experience study and our expectations around the phase-out of 

recent excess mortality. See the first few paragraphs of the “Mortality” discussion under the “SE-PIMS —

Assumptions” section for details about the new assumptions. For purposes of determining both minimum 

funding requirements and the present value of PBGC benefit payments, the improvement scale was updated 

from MP-2020 to MP-2021.

Economic Assumptions. Assumptions for future interest rates, inflation and wage growth are now set 

based with reference to the most recent CBO projections, rather than the most recent Social Security 

Administration Trustees report. Both PIMS models include updated economic assumptions as noted in the 

Capital Market Assumptions section above. The major assumptions are summarized below. The rates shown 

are the arithmetic mean of the first 10 years of the projection. 
 

PENSION BENEFIT GUARANTY CORPORATION 66 FY 202 2 | PROJECTIONS REPORT

Figure A-6

Economic Assumption Changes for FY 2022 Report

10-Year Arithmetic Mean for Single-Employer and Multiemployer Model Runs

FY 2022 FY 2021 

Long-Term Treasury Yielda 3.3% 3.0% 

Return on 30-year Treasury Bondsa 4.4% 0.2% 

Stock Market Return (Arithmetic) a 9.4% 7.6% 

Long-Term Corporate Rate 4.5% 4.1% 

Inflation Rate 2.7% 2.6%

Wage, Salary, and Flat Benefit Growth Rate 3.9% 3.9% 

Projected SE Plan Returns 6.5% 4.5% 

Projected ME Plan Returnsb 7.8% 5.4% 

Annual Bankruptcy Probability for SE Plans 0.7% 0.5% 

Annual Rate of Plans’ Projected Insolvency for ME Plans 0.2% 0.1%

a) ME-PIMS yields economic returns within 0.1% of the Single-Employer Model.

b) The projected plan return shown for ME-PIMS is for assets in non-SFA plans.