I’ve spoken before about the Pension Benefit Guaranty Corporation (PBGC), the federal organization that is paying pensioners of some of our bankrupt companies, such as Bethlehem Steel and Polaroid. PBGC is now paying 34,000,000 workers. Last year it ran up a deficit of twenty-billion, largely due to the companies’ under-funding their pension plans. Now, the Administration and Congress are trying to do something about this problem. They’re trying to impose a more standard form of reporting pension funds so that the example of Bethlehem Steel (which told the IRS they had enough money to cover 84% of future benefits, told their investors it was 73% and told the PBGC it was 61%) will not be repeated. And, they’re also trying to increase the amount to be paid to the PBGC by all companies with a defined-benefit plan.
It’s a good move by our government.
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