Despite an improving U.S. economy, retirement plans covering roughly 1.5 million workers are severely underfunded, threatening benefit cuts for current and future retirees, a federal watchdog agency warned Monday.
The Pension Benefit Guaranty Corporation (PBGC) said multi-employer plans, which are collectively bargained retirement plans maintained by more than one employer, are most at risk. “Plan insolvencies … are now both more likely and more imminent than in our last report,” the report said.
At the same time, the agency said single-employer pension plans – covering just over 30 million participants – are on firmer financial footing and are likely to remain so at least over the next 10 years.
The report concluded that, as shaky as the situation is for the underfunded multi-employer plans, the outlook is slightly better than it was just a year ago as the nation’s economy gradually improves from the severe 2007-2009 recession.