WASHINGTON — The Pension Benefit Guaranty Corporation released the following statement today on the findings in a study released by the Pension Coalition.
"We agree that PBGC premiums need to be reformed," said PBGC Director Josh Gotbaum. "It's important to understand that this Administration and the previous one supported premium reforms. The President's proposal would allow PBGC's Board to both raise and lower premiums in a way that is fair, affordable, and preserves pensions.
"Unlike the FDIC and other Federal insurance programs, Congress has continued to set PBGC premiums and has done so in ways that both underfunds PBGC and is convincing some companies they shouldn't offer pensions at all."
The Obama Administration originally proposed giving PBGC's Board the power to set premium rates based on the financial soundness of company sponsors in the 2012 budget.
When the premium proposal was first introduced, it was supported by the editorial boards of The Washington Post, The Boston Globe and Business Insurance. Since then, the Government Accountability Office issued a report saying Congress should consider "revising PBGC's premium structure to better reflect the agency's risk from individual plans and sponsors."
PBGC protects the pension benefits of more than 42 million Americans in private-sector pension plans. The agency is directly responsible for paying the benefits of more than 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars and never has. Its operations are financed by insurance premiums, investment income, and with assets and recoveries from failed plans. For more information, visit PBGC.gov.