Pension Problems on the Horizon
The pension-reform legislation working through Congress is supposed to strengthen our nation's private pension system and help prevent government bailouts, right? Not so fast. According to a story posted on CNNMoney.com:
The Wall Street Journal reported Monday that a study by the Pension Benefit Guaranty Corp., the agency that is on the hook for retirement obligations of failed pension plans, suggest that the agency would have to make more pension payments for companies unable to do so themselves over the next decade if the pension reform legislation passes.
More from the web story:
The PBGC estimates that under current law the agency will absorb an estimated $12.8 billion in claims, or pension obligations from 2007 to 2016, the paper reported.
By contrast, the agency estimates that proposals under consideration by congressional negotiators would swell the agency's obligations by $14.9 billion to $15.2 billion in claims over the decade, according to the report.
The paper also reports that the study estimates companies will make $1.24 trillion in contributions to their plans in the next decade, while it forecasts that the legislation would result in contributions of $1.21 trillion to $1.23 trillion.
Click here to read the CNNMoney.com story.