Federal Rescue Stabilizes Pension Benefits for 1.8 Million Workers

Why It Matters

A new Congressional Research Service (CRS) report on multiemployer pension plans lands at a tense moment: a $77.9 billion federal rescue program enacted under the Biden administration has stabilized the retirement benefits of 1.8 million workers, but unresolved questions about improper payments, structural vulnerabilities, and the long-term health of hundreds of plans are now up to a Republican Congress and a Trump administration with a very different view of federal intervention in private sector pensions.

More than 11 million workers and retirees depend on multiemployer defined benefit (DB) pension plans, concentrated in unionized industries like construction, trucking, and mining. Without the 2021 rescue, the federal insurer backstopping those benefits was on a path to insolvency, and most participants would have received less than $2,000 per year.

The Big Picture

Multiemployer DB plans are jointly sponsored by a union and multiple employers operating under a collective bargaining agreement. Workers earn a monthly retirement benefit based on years of service across all participating employers, rather than a single company's payroll. In 2023, 1,341 such plans covered 11.4 million participants and held $728.6 billion in assets, according to CRS analysis of Department of Labor data.

The structure creates a specific financial vulnerability. When an employer exits a plan, the unfunded liabilities tied to that employer's workers become the responsibility of the remaining employers, and those workers become what the report calls "orphan participants." If enough employers exit, the remaining base of contributing employers can buckle under the weight, producing what the report describes as a death spiral.

The 2001 recession and the 2007-2009 financial crisis accelerated that dynamic. Investment losses, low interest rates, and a wave of employer bankruptcies pushed the Pension Benefit Guaranty Corporation's (PBGC) multiemployer insurance program to a deficit that peaked at $65.2 billion in fiscal year 2019. PBGC projected that 10 to 15 percent of multiemployer plan participants were in plans heading toward insolvency.

Two plans alone illustrated the scale of the problem. The Central States, Southeast and Southwest Areas Pension Plan, covering more than 350,000 participants and paying $2.9 billion in annual benefits, projected insolvency by 2025. The United Mine Workers of America 1974 Pension Plan, covering roughly 90,000 participants, projected insolvency by 2022 or 2023. Had both plans collapsed, the resulting claims on PBGC would have exhausted the multiemployer insurance program entirely.

PBGC estimated that restoring solvency through premium increases alone would have required hikes of 363 to 552 percent over 20 years, a level the report describes as one that "many plan sponsors, plan participants, and policymakers would have found unreasonable."

Congress had been wrestling with this problem for years before acting decisively. The Pension Protection Act of 2006 established the zone certification framework that categorizes plans as Green (healthy), Yellow (endangered), Orange (seriously endangered), Red (critical), and Deep Red (critical and declining). The Multiemployer Pension Reform Act of 2014 added the critical and declining category, increased PBGC premiums, and, most controversially, allowed some plans to reduce vested benefits to stave off insolvency. The Central States plan applied under that provision in 2015 and was denied in 2016.

The definitive legislative response came with the American Rescue Plan Act of 2021, which created the Special Financial Assistance (SFA) program. Unlike prior interventions, SFA provides grants, not loans, drawn from the U.S. Treasury. Eligible plans receive a lump sum calculated to cover full benefit payments through 2051. As of May 15, 2026, 196 applications from 161 plans covering 1.8 million participants had been approved for approximately $77.9 billion in assistance. The PBGC's multiemployer insurance program, which carried a $65.2 billion deficit just six years ago, now reports a surplus of $2.6 billion.

The report is direct about SFA's limits. The law provided no requirement for structural changes to plan funding rules or governance. Plans that received grants continue operating under the same framework that produced the crisis. The report warns that currently financially healthy plans could become insolvent in future years and require additional federal assistance. Absent new funding rules, the conditions that created the pre-2021 emergency remain in place for the next generation of plans.

Funding data for 2023 underscore the unevenness. On an actuarial basis, 101 plans covering 1.2 million participants had funding ratios below 50 percent. Measured by the stricter RPA '94 methodology, which uses lower discount rates and produces higher liability estimates, 732 plans covering 8 million participants, representing 71.6 percent of all multiemployer DB plan participants, had funding ratios below 50 percent.

Political Stakes

The Trump administration inherited a program it did not create and has ideological reasons to scrutinize. Opponents of SFA argued at the time of its passage that federal assistance to private sector pension plans was inappropriate. A 2022 statement from Representative Rick Allen, now chairman of the House Subcommittee on Health, Employment, Labor, and Pensions, characterized the program as a "$90 billion bailout of private union pension plans."

The application window for SFA closed December 31, 2025, limiting the scope of any regulatory rollback. But revised applications may still be submitted through December 31, 2026, and the administration controls PBGC leadership and the regulatory posture governing how the remaining disbursements are managed.

The more immediate pressure point is the improper payments issue. A March 2023 report by PBGC's Office of the Inspector General found that some SFA applications included deceased participants in their participant counts, producing overpayments. On February 20, 2025, Representatives Tim Walberg and Rick Allen wrote to Attorney General Pamela Bondi seeking information on DOJ's recovery efforts, framing the overpayments as improper payments made by the "Biden-Harris administration." As of April 29, 2026, 67 plans had repaid $261.0 million in overpayments. The Central States plan repaid $126.5 million under a Department of Justice agreement in April 2024.

The overpayment issue gives Republicans a concrete oversight target. The GHOST Act, introduced in the 118th Congress by Representative Virginia Foxx and Senator Bill Cassidy, would have required PBGC to audit all SFA-approved plans for deceased participant overpayments. It did not pass. The current Congress has signaled continued interest in the issue, and the Walberg-Allen letter to Bondi represents a direct ask for the executive branch to escalate recovery efforts.

The deeper tension is whether to pursue new pension reform legislation addressing the structural gaps SFA left behind. With a Republican majority skeptical of federal intervention in private sector labor arrangements, the appetite for proactive reform is uncertain.

Democrats face the challenge of defending a program they passed on a party-line vote that has, by the report's own accounting, achieved its primary objective. The PBGC surplus, the stabilization of 1.8 million participants' benefits, and the prevention of what would have been a cascading insolvency crisis are all documented outcomes. The improper payments controversy, however, provides a persistent vulnerability, particularly given the scale of the Central States repayment and the ongoing recovery process.

For the 11.4 million participants and beneficiaries in multiemployer defined benefit pension plans, the immediate crisis has passed. Plans receiving SFA are expected to pay full benefits through 2051. But the report makes clear that the structural conditions enabling the next crisis have not been addressed, and the PBGC's multiemployer insurance program, while currently in surplus, depends on a premium base that would be wholly inadequate if a new wave of insolvencies emerged.

The Bottom Line

The CRS report documents a federal rescue that worked in the narrow sense: the PBGC's multiemployer program went from a $65.2 billion deficit to a $2.6 billion surplus, and 1.8 million workers are receiving the benefits they were promised. What it did not do is fix the underlying system.

The two things the public should know: first, $77.9 billion in federal grants stabilized a pension system that was genuinely on the verge of collapse, with consequences that would have fallen hardest on blue-collar retirees in industries like trucking and mining. Second, the law that provided that rescue imposed no structural reforms, meaning the framework that produced the crisis remains in place. Whether Congress and the current administration choose to address that gap, or wait for the next emergency, is the central pension policy question now before them.

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