Keyword: pbgc
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A new federal study says many workers in employer-funded pension plans that fail could see their benefits reduced under the current system of government support. The study was released Wednesday by the Pension Benefit Guarantee Corp., the federal agency that insures pensions for about 41 million Americans. It found that about half of employers in so-called multi-employer pension plans that fail in the near future will receive reduced payouts. …
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Despite recent congressional action, the Pension Benefit Guaranty Corporation’s (PBGC) multi-employer pension insurance program is “likely to be insolvent by the year 2024,” according to the Government Accountability Office’s (GAO) latest list of 30 “High Risk” government programs. PBGC collects premiums set by Congress from employers to insure the pension benefits of more than 44 million American workers and retirees currently covered under defined benefit plans. The agency’s “single-employer program protects about 33.6 million workers and retirees in about 27,600 pension plans,” according to the PBGC website. “The multi-employer program protects 10.4 million workers and retirees in about 1,500 pension...
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Emails obtained by The Daily Caller show that the U.S. Treasury Department, led by Timothy Geithner, was the driving force behind terminating the pensions of 20,000 salaried retirees at the Delphi auto parts manufacturing company. The move, made in 2009 while the Obama administration implemented its auto bailout plan, appears to have been made solely because those retirees were not members of labor unions. The internal government emails contradict sworn testimony, in federal court and before Congress, given by several Obama administration figures. They also indicate that the administration misled lawmakers and the courts about the sequence of events surrounding...
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[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...
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WASHINGTON (AP) -- The federal agency that insures the pensions of one in seven Americans has stepped up efforts to keep company pension plans from failing, its director said Monday, as the agency reported that its annual deficit increased 4.5 percent to $23 billion. The Pension Benefit Guaranty Corp. also said it paid $5.6 billion in benefits to participants in company pension plans that failed in fiscal 2010, ending Sept. 30. It noted that 147 pension plans failed, up from 144 a year earlier. The PBGC's finances have been battered in recent years by the weak economy, which has brought...
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Pension Benefit Guaranty Corporation, like Fannie Mae and Freddie Mac, is a case of "too big to fail." At least a number of members of Congress see it that way. And they are planning a push for legislation designed to shore up underfunded multiemployer private-sector pension funds whose result could put taxpayers on the hook for billions, if not tens of billions, of dollars. Sen. Bob Casey, D-Pa., and Reps. Earl Pomeroy, D-N.D., and Pat Tiberi, R-Ohio, the driving forces behind this measure, seek to shift the primary responsibility of keeping pensions adequately funded from unions and unionized...
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Taxpayers could be on the hook for another $165 billion if a bill to bail out private union pension funds makes it through Congress. A Democratic senator is introducing legislation for a bailout of troubled union pension funds. If passed, the bill could put another $165 billion in liabilities on the shoulders of American taxpayers. The bill, which would put the Pension Benefit Guarantee Corporation behind struggling pensions for union workers, is being introduced by Senator Bob Casey, (D-Pa.), who says it will save jobs and help people. As FOX Business Network’s Gerri Willis reported Monday, these pensions are in...
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Legislation introduced last week could shift costs of union pension plans to taxpayers in an attempt to stave off organized labor’s pension funding crisis.Senator Bob Casey, Pennsylvania Democrat, introduced the Create Jobs & Save Benefits Act of 2010 to address the funding problems faced by union-administered multi-employer pension plans.Multi-employer pension plans have to cover the benefits of members, even if their companies are defunct.
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Welcome to the General Motors bailout, part three—or is it four, or five? It’s hard to keep up, but this week the federal Pension Benefit Guaranty Corporation took over the pension liabilities of Delphi, the auto-parts spinoff of GM that has been working its way through Chapter 11 since 2005. As with the previous taxpayer rescues, this one includes a special favor for the United Auto Workers. Under the agreement, the PBGC will assume some $6.2 billion in pension liabilities from Delphi, including both hourly and salaried employees. That’s the second biggest pension bailout in PBGC history, and it takes...
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The United Auto Workers union, with ...backing from General Motors Corp., has stymied efforts... to pass legislation on the government insurance fund for corporate pensions. After two years of debate -- and recent maneuvering that seemed to produce a compromise -- Republican sponsors of the House bill are becoming resigned to postponing action until next year... Lawmakers' difficulty in passing a bill backed by the White House and, lately, many large companies, reflects the tension in pension legislation. Politicians want to shore up the federal pension insurance agency so taxpayers don't have to bail it out, as they did the...
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WASHINGTON (AP) -- The federal agency that insures the private pensions of 44 million workers said Tuesday that its deficit was $22.8 billion in 2005, as big airlines in bankruptcy dumped their pension liabilities. The Pension Benefit Guaranty Corp. disclosed in its annual financial report that as of Sept. 30, it had $56.5 billion in assets to cover $79.2 billion in pension liabilities. There has been an explosion in recent years in the number of big, ailing companies -- especially in labor-heavy industries like airlines and steel -- transferring their pension liabilities to the PBGC. With billions of dollars flying...
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Oct. 17, 2005 issue - One reason flying can be such a drag is that sinking feeling you get when you start talking to your seatmate and discover that she paid much less for her ticket than you did. The trick, of course, is to have access to the best information. What's true for airline fares is also true for airline shares. And for airline pension funds, too, given what happens when an airline goes broke. Pension-fund information—and the lack of it—links Northwest Airlines chairman Gary Wilson and 9/11 widow Ellen Saracini, whose husband was a United Airlines pilot. Guess...
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Workers face prospect of wage, benefit concessions or court-ordered cuts. First came the U.S. steel industry. More recently, money-losing airlines have landed themselves in bankruptcy court to cut labor costs. Now, Saturday's filing by auto parts maker Delphi signals that the U.S. auto industry has arrived at the same crossroads with it’s work force: agree to out-of-court concessions, or face the prospect of court-ordered cuts in wages, benefits and pensions. Delphi, a $29 billion industrial giant, has been struggling to make a profit since General Motors spun off its parts subsidiary in 1999. Last year, Delphi lost $4.8 billion; it...
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...The immediate causes of the Northwest and Delta filings are failed labor negotiations and bad luck. Northwest is struggling with striking mechanics who refused to join other unions in negotiating $1.4 billion in annual savings to prevent bankruptcy. Delta has its own high-cost union contracts and has long been bleeding cash. Hurricane Katrina and sky-high fuel costs were the tipping point. But the root of the problem for these "legacy" carriers is the burden of pension costs. And one tantalizing option is to use bankruptcy to pass them off to the taxpayer via the federal Pension Benefit Guaranty Corp. (PBGC)....
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WASHINGTON (AP) -- Lax reporting rules created by Congress, coupled with corporate America's eagerness to take advantage, have left millions of workers' and retirees' pension plans underfunded without their knowledge, senators were told Tuesday. United Airlines may have set an unsavory example for others in the airline industry, Senate Finance Committee members were told during a hearing on Capitol Hill. After declaring bankruptcy in 2002, the airline won court approval last month to shed $9 billion in pension obligations -- shifting responsibility to the federal Pension Benefit Guaranty Corp. That has contributed to a $23.3 billion deficit at the agency,...
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Mirage For SaleMay 19, 2005 Every time the mainstream media poses partisan propaganda as idiotic pseudo-intellectualism, all that comes to mind is Dan Ackroyd’s line from the movie Spies Like Us..."We mock what we don't understand." Or in the case of Katherine Stone’s recent piece of intellectual lint published in this past Sunday’s Washington Post, “Let’s mock the mocker”. Stone’s article, The Retirement You Weren't Banking On, is mundane liberal pabulum. You guessed it, “the President is no good, the Republicans hate you, corporations are evil and, uh, well...I have no ideas myself”. In the guise of an “expert”, Stone starts...
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The nation's pension insurer said Tuesday it will guarantee basic pension benefits to employees and retirees at United Airlines and US Airways if their plans are dissolved, but it said the potential terminations point to a need for legal reforms. The Pension Benefit Guaranty Corp., a quasi-governmental agency, said it plans to ask Congress to revise the federal bankruptcy laws so workers' pensions are more secure. The PBGC will propose such changes as allowing workers' pension claims to trump claims by unsecured creditors in bankruptcy-court proceedings. It also will call for companies to notify workers about the health of their...
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A bankruptcy court's decision this week to permit United Airlines to default on four underfunded pension plans is no surprise. This is what happens when Congress puts the taxpayer on the hook as the insurer of last resort. The ...questions are: Who's next? And ...how much will the taxpayers eventually be forced to ante up? United's default means that responsibility for the pensions of 120,000 workers and retirees now falls on the federal government... The court bought United's argument that getting rid of its pension plans was necessary for the airline's survival... But the PBGC itself is in financial hot...
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Says airline funded only 30% of plan; will give $2.1B to 36,000 active and retired ground workers. WASHINGTON (Reuters) - The agency that backs corporate pensions said Friday it was taking over United Airlines' pension plan for ground employees, saying the plan operated by the bankrupt airline was only 30 percent funded. The Pension Benefit Guaranty Corp. said it would guarantee payment of an estimated $2.1 billion in benefits out of the plan's $2.9 billion shortfall. The plan has more than 36,000 active and retired employees, the agency said.
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WASHINGTON -- With five U.S. airlines in bankruptcy court, financial turbulence is buffeting the federal agency that guarantees workers' pensions... Yesterday, a bankruptcy court paved the way for US Airways Group Inc. to turn over three employee pension plans to the Pension Benefit Guaranty Corp., at a cost of $2.3 billion to the federal insurance fund. Also, the PBGC last week took steps to immediately take over the pilots' pension plan at UAL Corp... The takeover is likely to cost the PBGC a total of $1.4 billion... The agency's growing liabilities...are fueling fears that a taxpayer-funded bailout of the agency...
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