TheCapitol.netCoursesConvenience LearningCustom TrainingPublicationsFaculty & AuthorsClientsStoreClient Care

Underfunded Pensions, Pension Dumping, and Retirement Security Archives

Underfunded Pensions, Pension Dumping, and Retirement Security

Underfunded Pensions, Pension Dumping, and Retirement Security


Pension Funds, the Pension Benefit Guarantee Corporation (PBGC), Bailout Risks, Impact on the Federal Budget, and the Pension Protection Act of 2006

Compiled by TheCapitol.Net
Authors: Patrick Purcell, Jennifer Staman, Kelly Kinneen, William J. Klunk, Peter Orszag, and Bradley D. Belt



Underfunded Pensions, Pension Dumping, and Retirement Security


The Employee Retirement Income Security Act of 1974 (ERISA) provides a comprehensive federal scheme for the regulation of employee pension and welfare benefit plans offered by employers. ERISA contains various provisions intended to protect the rights of plan participants and beneficiaries in employee benefit plans.

The Pension Benefit Guarantee Corporation (PBGC) is a federal corporation created by ERISA. 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.

Although the PBGC's liabilities are not explicitly backed by the full faith and credit of the federal government, Congress could face political pressure to bail out the PBGC at taxpayer expense should the agency become financially insolvent.

Bradley Belt, former executive director of the Pension Benefit Guaranty Corporation (PBGC), testified before Congress in October, 2004: "I am particularly concerned with the temptation, and indeed, growing tendency, to use the pension insurance fund as a means to obtain an interest-free and risk-free loan to enable companies to restructure. Unfortunately, the current calculation appears to be that shifting pension liabilities onto other premium payers or potentially taxpayers is the path of least resistance rather than a last resort."

2009, 316 pages
ISBN: 1587331535 ISBN 13: 978-1-58733-153-4

Complete Table of Contents and secure online ordering at 1534Pensions.com

. . . . . . . . .


August 4, 2009 12:37 PM    Publications

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)