Wondering what the next financial explosion is going to be? Wonder no more. BOHICA alert.
Let me introduce you to the Pension Benefit Guaranty Corporation (PBGC). What's that you say?
PBGC is a federal corporation created by the Employee Retirement Income Security Act of 1974. It currently protects the pensions of nearly 44 million American workers and retirees in more than 29,000 private single-employer and multiemployer defined benefit pension plans. PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.
Why is that a problem? Should Obama's 60 day ultimatum fail to yield the desired results, GM will be forced into bankruptcy and the PBCG would be the government agency that would then be responsible for covering GM's pension obligations. And PBCG is ALREADY short of the cash needed to fund it's CURRENT pension obligations.
From the Economist: Is the PBCG next?
Oh really? The Obama administration said, "bankruptcy is not the goal," although there
may be a "role for a court-supervised process to effect the
restructuring ... different from Chapter 11." (editor's note: Kind of like not calling the war on terror the war on terror.)
But there's more bad news to come:
Pension insurer shifted to stocks.
Switching from a heavy reliance on bonds, the Pension Benefit
The agency refused to say how much of the new investment strategy has been implemented or how the fund has fared during the downturn. The agency would only say that its fund was down 6.5 percent - and all of its stock-related investments were down 23 percent - as of last Sept. 30, the end of its fiscal year. But that was before most of the recent stock market decline and just before the investment switch was scheduled to begin in earnest.
No statistics on the fund's subsequent performance were released. Nonetheless, analysts expressed concern that large portions of the trust fund might have been lost at a time when many private pension plans are suffering major losses. The guarantee fund would be the only way to cover the plans if their companies go into bankruptcy.
Wondering if your pension is covered under this plan? You can check here.
And yes, the moonbats are already blaming George Bush.
Help me out here - am I reading this correctly? Is the PBGC modifying their privacy rules so they can conduct criminal, civil and administrative investigations? Tell me I'm not reading this right.
SUMMARY: This document provides notice of a proposed new Privacy Act system of records. The Pension Benefit Guaranty Corporation (PBGC) is establishing a new system of records entitled "PBGC-17, Office of Inspector General Investigative File System--PBGC," subject to the Privacy Act of 1974, as amended. The information from the new system of records will be used by the PBGC's Office of Inspector General to conduct criminal, civil, and administrative investigations, and will contain identifying information about potential subjects and sources.
ADDRESSES: Comments may be submitted by any of the following methods: . Federal eRulemaking Portal: http://www.regulations.gov. Follow the Web site instructions for submitting comments.
Down here in Australia, we have to put part of our pay into pension, 9% is the minimum. But because of news like this, i never count on it. I just pretend it's not there, because you never know if one day it's all wiped out for whatever reason and you'll be left sitting on your ass, destitute.
Posted by: MK | 03/30/2009 at 11:57 PM
Dinah, my father is a particapant in this program. He worked for LTV Steel for 42 years and has his pension secured from this PBGC.
No doubt, in his union mentality, he's blaming GWB.
Posted by: janice | 03/31/2009 at 08:19 AM