PBGC & Single Employer Plans (1): The Plans

This week the Pension Benefit Guaranty Corporation (PBGC) released their 2018 annual report, the Office of Inspector General released their audit report of PBGC’s financial statements and Forbes had an article on how the bankruptcy of a sponsor of a large Single Employer Defined Benefit Plan would impact participants and the PBGC.

With so much to digest a series is warranted so here it is, starting with data taken from the latest 5500 filings of 28 Single Employer Plans with over 100,000 participants sorted by funded status.

5 responses to this post.

  1. Once GE files BK it is going to be game over for the PBGC…One Fortune 50 Company (and DJIA company) is all it takes to wipe out the PBGC.

    Reply

    • I will be getting to this in the series but GE going bankrupt would be great for the PBGC especially in the short run as they would get up front the assets of a fully funded plan (after caps on benefits are applied) while only having to pay out reduced monthly benefits. This being one reasons (draconian premiums being another) that the PBGC Single Employer Program will not go bankrupt until they start having to use their money to bail out the multiemployer side.

      Reply

      • Sure, the PBGC assets will double, but the liability currently on the books at PBGC will do much more than double, it will expand by multiples. I saw the numbers on it 2 days ago; I cannot recall what the exact ratio was, but the PBGC will not survive…..

        Reply

      • Posted by Stanley on November 19, 2018 at 2:16 pm

        “…the PBGC Single Employer Program will not go bankrupt until they start having to use their money to bail out the multiemployer side.”

        Are you offering that up as a source of bailout funding, or have you heard it considered elsewhere? Why not grab off some of the 401K type accounts and put that funding to work in solving the problem of union profligacy. How about the Roth accounts?

        Obummer screwed the GM bond owners to prop up the UAW retirees. One of my neighbors is a GM salaried retiree and another a UAW type. One took a beating and the other did OK. Anyway, the single employer PBGC is just a bear market of crash away from problems of its own. IMO.

        This is a first class gordian knot. A super sized tar baby. In need of common sense and honesty.

        Reply

  2. Posted by geo8rge on November 19, 2018 at 4:06 am

    I was surprised to see Nokia on the list, but that appears to be Lucent, which was Bell Labs of Murray Hill NJ.

    Reply

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