PBGC registers largest deficit ever

[Winehole23]

The Pension Benefit Guaranty Corp., the U.S. government agency charged with insuring corporate pensions, said its deficit increased to $26 billion by the end of the most recent fiscal year, its largest ever.



Created in 1974, the PBGC is a federal corporation designed to protect the pensions of millions of U.S. workers and retirees. As a result of plan failures, the agency said Tuesday that its obligations totaled $107 billion by the end of fiscal 2011, while it has $81 billion in assets on hand to cover them.
http://online.wsj.com/article/BT-CO-20111115-717876.html

[Winehole23]

PBGC represents 44M retirees.

[George Gervin's Afro]

This is a problem. Where is all the money?

[101A]

This is a problem. Where is all the money?

Probably premiums weren't high enough to cover risk exposure. The money was never collected, I bet (though I really should read the article before guessing)

[Cry Havoc]

This is a problem. Where is all the money?

http://www.irannewsdigest.com/wp-content/uploads/2010/03/Bunker-Buster.jpg

http://politicsanonymous.com/wp-content/uploads/2011/09/wall-street.jpg

[101A]

Probably premiums weren't high enough to cover risk exposure. The money was never collected, I bet (though I really should read the article before guessing)

Can't read it.

[Winehole23]

There wasn't much more to it -- I'll try to find the rest.

[Winehole23]

Spot on, 101A:

The agency has proposed increasing premiums and setting prices in accordance with the perceived riskiness of the pension plans it insures. Additionally, the agency wants Congress to cede to it the authority to set future premiums.


So far, the PBGC’s premium reform proposals have gone nowhere.



After they were unveiled as part of President Obama’s budget request earlier this year, the business community registered strong objections, both to the premium increases and the idea of rearranging how they are determined.
http://www.washingtonpost.com/business/economy/pension-guaranty-agency-sees-deficit-swell/2011/11/15/gIQAuH4cPN_story.html

[coyotes_geek]

Probably premiums weren't high enough to cover risk exposure.

This. Now the PBGC will have to increase premiums, which will increase pension plan costs to companies, which will hinder economic growth.

Either that or just pretend that everything's okay until the money runs out. Sort of like SS in that regards.

[101A]

"Business community registered a bunch of lobyis......errrrr......strong objections"

[boutons_deux]

Pension plans, private, state/municipal, are heavily underfunded. Corporate exec love to raid their pension plans to pay themselves bonuses and prop up profitability/stock-price.