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Obama plan to shore up pension insurance fund stirs controversy
Reuters ^ | 4/22/2011 | Mark Miller, Reuters

Posted on 04/25/2011 7:58:47 AM PDT by Qbert

[Snip]

The Obama Administration’s 2012 budget proposal calls for a $16 billion boost in premiums over 10 years – but also seeks permission for PBGC to set premiums without Congressional approval, via a process similar to the one used by the Federal Deposit Insurance Corp. PBGC also proposes developing a new approach to risk-based pricing for weaker pension plans.

[Snip]

PBGC’s proposal faces opposition from plan sponsor groups that want Congress to remain in control of premium levels and oppose rate hikes. They argue that DB pensions are already a disappearing breed in the private sector, and that higher rates could encourage even more plan sponsors to shift away from pensions and toward defined contribution benefit plans, such as 401(k)s.

“It would raise plan sponsor overhead,” says Arthur Noonan, a partner at Mercer, the employee benefits consulting firm. “The more expensive it becomes, the more you have to question if the cost relative to the benefit is worthwhile. This could be one more reason for plan sponsors to exit.”

[Snip]

“Plan sponsors feel over-regulated,” he says. “Anything added on is going to be viewed negatively and with suspicion. In this case, it’s not just more complexity, but a dramatic increase in premium outlays. You do wonder when the next regulatory burden will drive plan sponsors to say they’ve reached the end of their rope.”

Glickstein argues for caution against taking steps that would further reduce the presence of DB plans in the private sector – which already cover fewer than 20 percent of all workers. “This is a time to support the DB system, because it has a long history of being the right vehicle to provide retirement income. We should be careful not to kill the golden goose.”

(Excerpt) Read more at blogs.reuters.com ...


TOPICS: Business/Economy; Government; News/Current Events
KEYWORDS: obama; pbgc; pensions

1 posted on 04/25/2011 7:58:51 AM PDT by Qbert
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To: Qbert

dunham fears Trump...
http://www.globemagazine.com/


2 posted on 04/25/2011 8:13:40 AM PDT by biggredd1
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To: Qbert
“Plan sponsors feel over-regulated,” he says. “Anything added on is going to be viewed negatively and with suspicion. In this case, it’s not just more complexity, but a dramatic increase in premium outlays. You do wonder when the next regulatory burden will drive plan sponsors to say they’ve reached the end of their rope.”


Interesting comment.

It sounds like they want no control, but my money to pay for insurance if they bet wrong.
Sounds a bit like how we got into trouble with the banks doesn't it?

3 posted on 04/25/2011 8:14:16 AM PDT by az_gila
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