Word: pbgc
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Dates: during 1990-1999
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...their companies' decisions to replace their pensions with insurance-company annuities, these retirees are learning that their former employers shucked all legal responsibility for continued payments to them in the process. Worse, the same switch cut them off from the government's Pension Benefit Guaranty Corporation (PBGC). Instead, annuity holders are covered by a hodgepodge of state insurance regulations that in some cases offer no protection at all for the $50 billion worth of insurance annuities that cover retirees and workers...
Maybe more. Testifying before Congress last week, California's Garamendi pleaded for aid for the victims of Executive Life's collapse. Garamendi contended that the PBGC bears some responsibility for those annuity payments, since it supervised the termination of pension plans in which federally guaranteed benefits were replaced by insurance annuities. Said he: "Doubtless there are some villains in this piece. Venal businessmen, negligent regulators, careless rating companies, crafty accountants and lawyers, greedy pension-plan sponsors are all candidates, and if punishment is due, it should be meted out. But that's not going to solve the giant human problem...
Since 1974 the Department of Labor has exercised oversight authority, seeking to ensure that plans are operated in the best interests of their participants. When companies are unable to pay pension benefits, the PBGC steps in to meet the obligations, guaranteeing payment of up to $2,250 per month to eligible retirees...
...tune of $30 billion. Worst of all is a class of financially weak corporate behemoths, such as LTV and Chrysler, whose pension plans are severely short of cash. Unless their sales and profits improve, some of these large funds could collapse. Already running a deficit of $1.8 billion, the PBGC estimates its deficit could grow to $8 billion by the end of this decade...
...TMFONT 1 d #666666 d {Source: PBGC}]CAPTION: 10 RISKY PENSIONS...