The Financial Times today (from Benefitslink.com) has an article–“Washington put on pensions alert“–reporting on an interview with Bradley Belt, executive director of the PBGC, who discusses the administration’s concerns over the pension funding crises. Here is a part of what he had to say when asked about whether U.S. taxpayers might eventually be required to pick up the bill for employers’ abandoned pension funding commitments:
“The challenges are multi-faceted and profound,” he said in an interview with the Financial Times. “They go from the narrow role of administering the insurance [program], to the future of the defined benefits system as a whole, to the wider issue of retirement security.”
He called for the rules to be tightened for weak companies with underfunded plans and simplified for those that are healthy to encourage them to stay in the system. There also needed to be a change to the premium structure that funds the PBGC.
“The level received by the PBGC is simply inadequate to cover financial claims. The deficit will get larger.”
Mr. Belt wants to strengthen the agency’s status in bankruptcies, to “enhance our ability to recover on our claims, so we are looking at our current priority and how we might classify pension contributions as administrative expenses”.