The Penson Benefit Guaranty Corporation (PBGC) recently released an update to a 2020 report that analyzed partial risk transfer data reported by Single Employer Pension Plans to the PBGC on premium filings. Under the updated analysis published in June 2024, is the data reported to the PBGC for plans filed in 2015 through 2022 plan years and the summarization of year, plan size, as well as well as industry plan frozen status and premium funded ratios.
Information Being Reported to the PBGC
The information being reported to the PBGC:
- The number of pension plans that engaged in risk transfer activities and the number of participants affected by these activities such as the number of participants who received a distribution from their pension plan in the form of a lump sum cash out or an annuity purchased from a private insurance company.
The risk transfer data reported to the PBGC does not include the amount of liability associated with sponsoring a defined pension plan. Participants who received a lump sum distribution or an annuity and no longer have accrued benefits in their pension plans, are no longer covered by PBGC insurance.
Latest Data on Risk Transfer Analysis
To better understand the measurements associated, the following is some of the latest data relating to risk transfer analysis:
- During the period from 2019 to 2022, the number of plans providing lump sum windows decreased materially over the observed period from 960 lump sum window offerings in 2015 to 94 lump sum windows in 2022.
- Conversely, the number of plans purchasing annuities each year increased from 91 in 2015 to 225 in 2022.
- 1,065 plans engaged in risk transfer activity in multiple years between 2015 and 2022.
- 629 plans had at least one annuity purchases and made at least one lump sum offering during the observed periods.
- Over the study/observed period, an estimated 4.1 million participants were removed from single employer plans due to risk transfer activity.
- The percentage of total participants removed due to risk transfer activity ranged between 1.7% and 2.6% per plan year.
For a comprehensive coverage of this topic and the potential impact of PBGC variable rate premiums, visit the PBGC website: https://www.pbgc.com
