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Can The Pension Benefit Guaranty Corporation Be Restored To Financial Health
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Book Synopsis Can the Pension Benefit Guaranty Corporation Be Restored to Financial Health?. by : Neela K Ranade
Download or read book Can the Pension Benefit Guaranty Corporation Be Restored to Financial Health?. written by Neela K Ranade and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2003, the Bush administration made a proposal for reform to strengthen pension plan funding and the financial condition of the Pension Benefit Guaranty Corporation (PBGC). Various bills with the goal of reforming the PBGC were proposed in the 108th Congress but none were enacted into law. The doubling of the PBGC deficit from fiscal 2003 to fiscal 2004, has heightened awareness about the PBGC deficit situation. Congressional leaders from both parties have announced their intention to move aggressively on legislative solutions in the 109th Congress.
Book Synopsis Can the Pension Benefit Guaranty Corporation Be Restored to Financial Health?. by :
Download or read book Can the Pension Benefit Guaranty Corporation Be Restored to Financial Health?. written by and published by . This book was released on 2004 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Pension Benefit Guaranty Corporation (PBGC) is a federal government agency created by the Employee Retirement Income Security Act of 1974 (ERISA) to protect the pensions of participants covered by most private sector, defined benefit pension plans. The primary source of revenues offsetting PBGC's claims is premiums paid by the sponsors of covered pension plans. These premiums are established by Congress. The PBGC receives no appropriated funds. The PBGC's single-employer program has posted growing deficits for the last three years. The deficit on September 30, 2004 was at an all-time high of $23 billion. Currently, the pension plans of major airlines present an enormous threat to the financial condition of the PBGC. Underfunded pension plans of sponsors with below-investment-gradebond ratings represented reasonably possible exposure of another $96.0 billion as of September 30, 2004 according to the PBGC. An independent organization has projected that without reform, the PBGC's single-employer program will run out of cash in 2020 or 2021. Because of the risks to its long-term financial viability, the Government Accountability Office (GAO) has placed the PBGC single-employer program on its high-risk list of agencies with significant vulnerabilities to the federal government. PBGC failure could require a tax-payer funded bailout. Major systemic issues include the PBGC's premium structure, funding requirements for defined benefit pension plans and PBGC's access to a bankrupt company's assets. Current PBGC premiums may be too low for the risks that PBGC underwrites. Furthermore, premiums do not vary based on the credit risk for the company, assetliability mismatch for the pension plan, participant demographics, or benefit design features such as whether or not the plan allows lump sum payouts. Sponsors that have made pension plan contributions in excess of the minimum required in the past may not be required to make contributions to the pension in the current year even when the pension plan is underfunded in the current year. Cyclical companies that wish to make higher contributions during profitable periods may find that maximum deductibility rules prevent them from making such contributions. Under current bankruptcy law, the PBGC cannot perfect a lien to force a company that has filed for bankruptcy to make minimum required pension plan contributions. In 2003, the Bush administration made a proposal for reform to strengthen pension plan funding and the financial condition of the PBGC. Various bills with the goal of reforming the PBGC were proposed in the 108th Congress but none were enacted into law. The doubling of the PBGC deficit from fiscal 2003 to fiscal 2004, has heightened awareness about the PBGC deficit situation. Congressional leaders from both parties have announced their intention to move aggressively on legislative solutions in the 109th Congress. This report will be updated upon major developments affecting the PBGC's financial condition.
Book Synopsis Pension Benefit Guaranty Corporation by : Barbara D. Bovbjerg
Download or read book Pension Benefit Guaranty Corporation written by Barbara D. Bovbjerg and published by DIANE Publishing. This book was released on 2009-02 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Pension Benefit Guaranty Corp. (PBGC) insures the pension benefits of 44 million private sector workers and retirees in over 30,000 employer-sponsored pension plans. It was reported that PBGC¿s governance structure needed improvements. Congress is considering expanding the board of dir. to include additional members. It was also recommended that the board develop policies and mechanisms consistent with corp. governance practices, and develop formal guidelines to clarify the roles and respon. of the board chair, members, and their rep. This report addresses: the steps PBGC has taken to improve policy direction and oversight; and (2) how Congress applies oversight to PBGC and what other oversight mechanisms exist for gov¿t. corps. Illus.
Book Synopsis Pension Benefit Guaranty Corporation: Improvements Needed to Strengthen Governance Structure and Strategic Management: Testimony Before Committee on Health, Education, Labor, and Pensions, U.S. Senate by :
Download or read book Pension Benefit Guaranty Corporation: Improvements Needed to Strengthen Governance Structure and Strategic Management: Testimony Before Committee on Health, Education, Labor, and Pensions, U.S. Senate written by and published by DIANE Publishing. This book was released on with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Pension Benefit Guaranty Corporation: Improvements Needed to Address Financial and Management Challenges by : Barbara D. Bovbjerg
Download or read book Pension Benefit Guaranty Corporation: Improvements Needed to Address Financial and Management Challenges written by Barbara D. Bovbjerg and published by DIANE Publishing. This book was released on 2009-05 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Pension Benefit Guaranty Corp. (PBGC) insures the retirement future of nearly 44 million people in more than 30,000 private-sector defined benefit pension plans. In July 2003, PBGC¿s single-employer pension insurance program was designated as ¿high risk,¿ meaning that it needed urgent attention and transformation. The program remains on the list today with a projected financial deficit of over $13 billion, as of Sept. 2007. Because Congress exercises oversight of PBGC, the author was asked to testify on: (1) the critical role PBGC plays in protecting the pension benefits of workers and how PBGC is funded; (2) the financial challenges facing PBGC; and (3) the PBGC¿s governance, oversight and management challenges. Tables.
Book Synopsis Pension Benefit Guaranty Corporation by : Barbara D. Bovbjerg
Download or read book Pension Benefit Guaranty Corporation written by Barbara D. Bovbjerg and published by DIANE Publishing. This book was released on 2009-02 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Pension Benefit Guaranty Corp. (PBGC) employs 800 fed. employees and uses 1,500 private sector employees to insure the pensions of millions of private sector workers and retirees in certain employer-sponsored pension plans. In recent years, PBGC¿s projected financial liabilities and workloads have increased greatly due to a large no. of pension plan terminations. Given this, it is important that PBGC remain well positioned to fulfill its promise to those retirees who depend on it. This is a report on: PBGC¿s recent experience in hiring and retaining key staff and how it compared to other fed. agencies; and the actions PBGC has taken to hire and retain key staff and what additional steps, if any, can be taken. Includes recommend. Illustrations.
Author :United States. Congress. House. Committee on Education and the Workforce Publisher : ISBN 13 : Total Pages :92 pages Book Rating :4.F/5 ( download)
Book Synopsis Strengthening pension security and defined benefit plans by : United States. Congress. House. Committee on Education and the Workforce
Download or read book Strengthening pension security and defined benefit plans written by United States. Congress. House. Committee on Education and the Workforce and published by . This book was released on 2004 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Pension Benefit Guaranty Corporation by : Pension Benefit Guaranty Corporation
Download or read book Pension Benefit Guaranty Corporation written by Pension Benefit Guaranty Corporation and published by . This book was released on 1978 with total page 404 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author :United States. Congress. Senate. Committee on Finance. Subcommittee on Private Retirement Plans and Oversight of the Internal Revenue Service Publisher : ISBN 13 : Total Pages :166 pages Book Rating :4.F/5 ( download)
Book Synopsis Financial Strength of Pensions and the Pension Benefit Guaranty Corporation by : United States. Congress. Senate. Committee on Finance. Subcommittee on Private Retirement Plans and Oversight of the Internal Revenue Service
Download or read book Financial Strength of Pensions and the Pension Benefit Guaranty Corporation written by United States. Congress. Senate. Committee on Finance. Subcommittee on Private Retirement Plans and Oversight of the Internal Revenue Service and published by . This book was released on 1993 with total page 166 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author :U. s. Government Accountability Office Publisher :Createspace Independent Pub ISBN 13 :9781482780819 Total Pages :98 pages Book Rating :4.7/5 (88 download)
Book Synopsis Pension Benefit Guaranty Corporation: Redesigned Premium Structure Could Better Align Rates with Risk from Plan Sponsors (GAO-13-58) by : U. s. Government Accountability Office
Download or read book Pension Benefit Guaranty Corporation: Redesigned Premium Structure Could Better Align Rates with Risk from Plan Sponsors (GAO-13-58) written by U. s. Government Accountability Office and published by Createspace Independent Pub. This book was released on 2013-03-15 with total page 98 pages. Available in PDF, EPUB and Kindle. Book excerpt: Various options are available to make the Pension Benefit Guaranty Corporation's (PBGC) premium structure more risk-based and better reflect the risk of future claims. Historically, PBGC's premiums have not fully reflected the risks PBGC insures against--chiefly that a plan sponsor with an underfunded plan will become bankrupt, forcing the termination of the plan and imposing a claim on PBGC. PBGC's current structure relies largely on a flat-rate premium that is based on the number of plan participants and that assesses rates equally per plan participant across all sponsors. PBGC also charges a variable-rate premium that is based on just one risk factor, plan underfunding. One available option is to further increase rates within this current structure; however, plan underfunding alone is a poor proxy for the risk of new claims. An alternative option is to redesign premiums to incorporate additional risk factors, such as a sponsor's financial strength (as currently being explored by PBGC) or a plan's investment strategy (as is currently done in the United Kingdom). Moving to a more risk-based system would shift premium costs among sponsors. To analyze the potential effects of different premium structures, PBGC developed a model using data from a sample of about 2,700 plans. Under one possible option explored by PBGC that incorporated an additional risk factor for a sponsor's financial health, financially healthier sponsors would tend to pay less and financially riskier sponsors more--as much as $257 more per participant, depending on their assigned risk level. Some pension experts and plan sponsors we spoke with raised concerns about this potential redistribution of costs. For example, some believe that plan terminations would increase. However, prior work from GAO and others indicates that other factors--including sponsor size, collective bargaining agreements, and overall plan cost--are more important in sponsors' decisions to freeze their plans. Some pension experts and plan sponsors also noted that a more risk-based system could lead to premium increases during poor economic conditions when sponsors are least able to pay, and that it is inequitable for current sponsors to pay higher rates to address costs resulting from prior plan terminations. However, experts also made suggestions about how to address such concerns within a redesigned premium structure, such as by capping premium levels and averaging sponsors' funding levels over multiple years to reduce volatility. The process of redesigning and implementing a more risk-based premium structure poses potential data and administrative challenges. To help address these challenges, PBGC's model could be further developed to evaluate the implications of incorporating additional risk factors, such as company financial health and plan investment mix. Such efforts could include identifying any additional data needs, as well as exploring the effects on sponsors, including any potentially disproportional hardships on smaller companies resulting from redistributing higher rates to riskier sponsors based on a redesigned structure. Although PBGC is uniquely situated to take on additional rate-setting responsibilities, if Congress were to relinquish some authority in this area, certain safeguards still may be required to help mitigate concerns about PBGC's governance, oversight, and transparency. These safeguards could include additional congressional oversight, soliciting public feedback, and establishing an appeals process for sponsors who wish to challenge their assessment.
Book Synopsis Financial Status of the Pension Benefit Guaranty Corporation and the Administration's Defined Benefit Plan Funding Proposal by : United States. Congress. Senate. Committee on Finance
Download or read book Financial Status of the Pension Benefit Guaranty Corporation and the Administration's Defined Benefit Plan Funding Proposal written by United States. Congress. Senate. Committee on Finance and published by . This book was released on 2005 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Guaranteed Trouble by : Jeffrey R. Brown
Download or read book Guaranteed Trouble written by Jeffrey R. Brown and published by . This book was released on 2007 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the economic rationale for, historical experience of, and current pressures facing the Pension Benefit Guaranty Corporation (PBGC). The PBGC is the government entity which partially insures participants in private-sector defined benefit pension plans against the loss of pension benefits in the event that the plan sponsor experiences financial distress and has an under-funded pension plan. The paper discusses three major flaws of the PBGC, namely, that the PBGC has: 1) failed to properly price insurance and thus encouraged excessive risk-taking by plan sponsors; 2) failed to promote adequate funding of pension obligations; and 3) failed to promote sufficient information disclosure to market participants. The paper then discusses potential ways to reform the PBGC so that it operates more in concert with basic economic principles.
Book Synopsis Pension Benefit Guaranty Corporation by : United States. General Accounting Office
Download or read book Pension Benefit Guaranty Corporation written by United States. General Accounting Office and published by . This book was released on 2003 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Pension Benefit Guaranty Corporation by : U S Government Accountability Office (G
Download or read book Pension Benefit Guaranty Corporation written by U S Government Accountability Office (G and published by BiblioGov. This book was released on 2013-06 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: GAO discussed its attempt to audit the Pension Benefit Guaranty Corporation's (PBGC) fiscal year (FY) 1990 financial statements. GAO noted that: (1) PBGC reported an operating loss of more than $780 million, increasing its accumulated deficit by more than 75 percent to $1.8 billion for FY 1990; (2) a significant increase in losses from future pension plan terminations, investment losses on assets held for benefit payments, and a decline in the expected recovery values of receivables caused operating losses for FY 1990; (3) PBGC faces significant risk from future plan terminations and reported some $20 billion to $30 billion in plan underfunding; (4) PBGC liability for future benefits totalled $4.8 billion, about 95 percent of its obligations; (5) due to weaknesses in supporting and controlling liability estimating techniques, GAO was unable to determine the reliability of PBGC estimated liability for future benefits; (6) weaknesses in processing and follow-up on premium payments inhibited PBGC premium collection efforts; and (7) system and control weaknesses contributed to PBGC inability to systematically reconcile either its accounting data or its investment and fund activity, control its accounts receivable, and promptly prepare and file external financial reports. GAO believes that PBGC needs to develop specific corrective action plans that will address its financial management weaknesses.
Book Synopsis Pension Benefit Guaranty Corporation by : U.s. Government Accountability Office
Download or read book Pension Benefit Guaranty Corporation written by U.s. Government Accountability Office and published by Createspace Independent Publishing Platform. This book was released on 2017-08-03 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt: " At the end of fiscal year 2011, PBGC insured the pension benefits of 44 million U.S. workers, retirees, and beneficiaries in about 27,000 private defined benefit plans. PBGC's 2011 net accumulated deficit of $26 billion, coupled with future risks posed by plan sponsors and their plans, threatens PBGC's solvency. To help contain PBGC's deficit, Congress recently passed legislation increasing PBGC premiums. Beyond simply increasing rates, the administration has proposed granting PBGC authority to redesign its premium structure to more fully reflect the risk of new claims. To better understand the issues involved, GAO was asked to examine (1) the options available to adjust premiums to improve PBGC's financial condition; (2) the potential implications of adjusting premiums; and (3) the potential implementation challenges in moving to a more risk-based premium structure. To conduct this work, GAO reviewed relevant legislation, analyzed PBGC premium data, and interviewed officials implementing other risk-based premium structures in this country and the United Kingdom, as well as numerous experts and plan sponsors reflecting a broad spectrum of perspectives on the topic. "
Book Synopsis The Financial Health of the Pension Guaranty Benefit Corporation (PBGC). by :
Download or read book The Financial Health of the Pension Guaranty Benefit Corporation (PBGC). written by and published by . This book was released on 2007 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Pension Benefit Guaranty Corporation (PBGC) is a federal government agency created by the Employee Retirement Income Security Act of 1974 (ERISA) to protect the pensions of participants covered by most private sector, defined benefit pension plans. The PBGC receives no appropriated funds. The agency's costs are offset by the assets of the plans that the PBGC takes over and premiums paid by the sponsors of covered pension plans. The premiums are established by Congress. The PBGC's single-employer program posted an all-time high deficit of $23 billion in 2004; as of September 30, 2006, the deficit was $18 billion. The PBGC discloses an additional, off-balance sheet liability for reasonably possible terminations; as of September 30, 2006, it was $73 billion. Although the PBGC's net position (measured as assets minus liabilities) improved $5.2 billion since 2004, it fell $31.0 billion from 2001 to 2004. Many factors have contributed to the PBGC's worsening financial condition. Primary among them was the termination of several large underfunded pension plans between 2002 and 2005 in the steel and airline industries. Plan terminations by airlines continue to threaten the PBGC's finances. Poor stock market returns (in 2001 and 2002) and falling interest rates also contributed to the PBGC's recent problems. As the PBGC's condition worsened, Congress and the Bush Administration considered reforms to address the salient issues. On August 17, 2006, the President signed the Pension Protection Act as P.L. 109-280. It has been called the most comprehensive reform of the nation's pension laws since the enactment of ERISA. The law establishes new rules that strengthen funding requirements for most plans; however, it provides funding relief for plans sponsored by commercial airlines. It also includes reforms that affect cash balance plans, defined contribution plans, and other forms of deferred compensation. Although the PBGC currently receives no appropriations, many expect that because it insures the pensions of 44 million Americans, its failure could require a taxpayer funded bailout. The Government Accountability Office (GAO) added the PBGC's single-employer insurance program to its list of high-risk areas in July of 2003. As of January 2007, it remains on GAO's list because of its high deficit and because the ultimate impact of recent reforms on the PBGC's finances is unclear. This report focuses on the financial condition of the PBGC and the effects of the Pension Protection Act; it will be updated upon major developments affecting the PBGC's financial condition.
Author :United States Government Accountability Office Publisher :Createspace Independent Publishing Platform ISBN 13 :9781976190551 Total Pages :92 pages Book Rating :4.1/5 (95 download)
Book Synopsis Pension Benefit Guaranty Corporation by : United States Government Accountability Office
Download or read book Pension Benefit Guaranty Corporation written by United States Government Accountability Office and published by Createspace Independent Publishing Platform. This book was released on 2017-09-19 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: As the insurer of over 29,000 private sector defined benefit plans, the Pension Benefit Guaranty Corporation (PBGC) may be required to assume responsibility for the plans of a growing number of companies filing bankruptcy due to the recession. Concerns about PBGC's benefit determination process, reductions in benefits due to guarantee limits, and workers' retirement security overall led the chairmen and ranking members of the Senate Health, Education, Labor, and Pensions Committee and the Senate Finance Committee, among others, to ask GAO to study: (1) how long it takes PBGC to make benefit determinations; (2) the extent of overpayments on retirees' benefits; (3) how well PBGC communicates with participants; and (4) the timeliness and accessibility of the appeals process. To conduct this study, GAO reviewed PBGC policies and procedures, analyzed automated data and case files, and interviewed PBGC officials and certain associations, participants, and their representatives from among those most affected by the process. GAO is recommending that PBGC
