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Govt. Agency that Insures 44 Million Workers Pension Plans In Trouble

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posted on Feb, 17 2009 @ 05:03 PM
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Little known Govt. Corporation Insurance who insures 44 million workers and retirees pension plans is 11 Billion underwater.

link to article: www.kfsm.com...


The deepening recession spells trouble for a little-known government corporation that insures the pensions of 44 million workers and retirees.

The Pension Benefit Guaranty Corp. already has an $11 billion deficit that seems sure to grow larger as Corporate America suffers through the worst economic crisis since the Great Depression.

With companies reporting shortfalls in their pension funds, it's all but certain that the PBGC will be forced to take over the pension plans of a rising number of bankrupt businesses.


What gets me, is all those people, who have labored 9 to 5 or longer everyday for years and contributed money - after taxes were taken out, to have a decent retirement, may end up losing it all.


The future financial health of the agency is hard to forecast. It is hinged on interest rates, the length of the recession and the PBGC's own luck in playing the market, where it has billions invested.

The agency has $63 billion in assets. But it is obligated to spend $74 billion on pension benefits in the coming years. The PBGC might have time to rebound, but over the long term it might become insolvent and require a bailout.


This is ONE company THEY BETTER BAILOUT!!! Because it would ACTUALLY BE BAILING OUT EVERYDAY PEOPLE of the U.S.!!!


Congress created the PBGC in 1974 to guarantee the retirement security of workers covered by defined benefit pension plans. These traditional plans, which pay a specified monthly benefit at retirement, are being phased out as companies turn to 401(k)-style programs that require workers to make contributions and shoulder investment risks. The PBGC, which receives no tax dollars, gets its money from premiums paid by companies that sponsor the pension plans, along with revenue from its investments.

The corporation's balance sheet has taken heavy hits in recent years. Nine of the 10 largest pension plan terminations in PBGC's history, including United Airlines, Bethlehem Steel and Kaiser Aluminum, have occurred since 2001.



The underfunding trend is likely to continue. Even though Congress passed a law in 2006 requiring companies to meet target dates to eventually fund 100 percent of their pension obligations, those restrictions were relaxed in December to help them weather the bad economic times.

The business community is lobbying to further waive the rules during the current economic slump. Because of plummeting asset values, companies this year are faced with having to contribute to their pension funds two to three times what they had expected, said Aliya Wong, director of pension policy at the U.S. Chamber of Commerce.

"Because this is coming out of the bottom line, companies are making decisions not just about freezing their pension plans but whether they can even continue in business," Wong said.


Personally - if I had a pension plan - I would be getting every dime of it out! I have already gotten every dime of my own IRA out!

To me, paying the penalites compared to losing everything.................
is a no brainer! But that is Me!!




posted on Feb, 17 2009 @ 07:40 PM
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reply to post by questioningall
 



Here is the website for the Pension company..

www.pbgc.gov...


PBGC is a federal corporation created by the Employee Retirement Income Security Act of 1974. It currently protects the pensions of nearly 44 million American workers and retirees in more than 29,000 private single-employer and multiemployer defined benefit pension plans. PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.


The above says, that they do and it is from private employers.



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