Wednesday, November 12, 2003

Pension Benefit Guaranty Corp.

Have you heard of that company before? If not, you should learn more about it. This from the Wall Street Journal (no link; subscription required):

The PBGC is a government run corporation, much like Fanny Mae, that takes over pension plans after companies default on them or go out of business. It ensures that workers who've contributed to and been promised a pension are not left holding the (empty) bag. Right now it is projected to have an $8.8 billion long-term shortfall in funds. But the big news is that some very large companies that are having trouble meeting the federally required minimum pension funding are asking for relief from the rather strict "catch-up" schedules want to change those schedules. These schedules set out how quickly companies must re-fund their programs after relief during financial hardships.

In this instance, the White House is staunchly behind the PBGC in wanting to maintain the catch-up schedules:

The Bush administration is on record as strongly opposing any attempt to water down the catch-up requirements. "If we're going to provide short-term funding relief, how do you not do the same for every future firm that finds itself in that situation?" a senior administration official said.
Giving relief to those who've asked, so far, would likely result in the PBGC being over $80 billion underfunded.

But (you just knew there had to be a but)...

Despite concerns within the Bush administration, however, influential congressional leaders are widely believed to be pushing relief. They include House Speaker Dennis Hastert, an Illinois Republican whose state is home to troubled UAL Corp., and Democratic Sen. Max Baucus of Montana, whose large rural state is served by Northwest Airlines.
Didn't you know you'd be able to count on our elected representatives to do what is right for the whole country? It's so pleasant to know that these guys will be consistent - they may not have the gonads of a gnat - but you can bet they'll stand up for their true constituents.

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