Archive for the ‘PBGC’ Category

PBGC Looking For Ideas

On their blog the Pension Benefit Guaranty Corporation (PBGC) expressed interest in ideas on what information to make available.

  • What PBGC data or content should be more readily available?
  • Which PBGC online service or data would you like to be easier to use?
  • Which PBGC service would you like to use on your mobile device?

You can submit your feedback to Here is mine.

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PBGC Claiming Westinghouse MTIA Worthless?

The reporter recently contacted me on this story:

WILMINGTON, Del. (Reuters) – Employees of U.S. nuclear power firm Westinghouse Electric Co LLC, which is bankrupt and reeling from a failed reactor project, got a nasty surprise recently: in the eyes of the U.S. government’s pension insurer, its retirement plan has a massive shortfall.

While bankrupt companies often have big pension deficits, the vast majority flag the underfunding years in advance of filing for Chapter 11. By contrast, the Westinghouse Electric Co Pension Plan, which has about 9,700 participants, appeared fully funded in its most recent report to the Department of Labor in 2015.

That was the question and this is what I found out (and did not find out):

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The United States Government Accountability Office (GAO) released a 684-page report that “identifies government operations with greater vulnerabilities to fraud, waste, abuse, and mismanagement or the need for transformation to address economy, efficiency, or effectiveness challenges.”

The section on the Pension Benefit Guaranty Corporation (PBGC) covered ten pages with these highlights that included one rather curious recommendation:

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MPRA – More Political Revenue Anticipated

HR83 which included the Multiemployer Pension Reform Act (MPRA) was passed by the House on 12/11/14 (219-206), the Senate on 12/13/14 (56-40), and enacted on 12/16/14 for reasons that were obvous to me at the time but I may have missed something.

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S-HNB and the demise of the Yard-Man Presumption

Public plan sessions are tomorrow with New Jersey likely to be featured but today I learned of two recent events that might mean in ten years nobody will get retiree health benefits outside of Medicare, Medicaid, or Obamacare and there will probably never be a federal bailout of pensions beyond what the PBGC can afford.

It was also announced that this will be the last EA meeting that will be recorded so in future years I may be the only one memorializing this sort of stuff:

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Pray for the PBGC

The Pension Benefit Guaranty Corporation (PBGC) is severely underfunded itself yet on Friday there was this press release:

Reversing a prior position, the Pension Benefit Guaranty Corporation announced today that it will pay pension benefits for more than 800 former employees of the Hospital Center at Orange, which provided primary and emergency care in Orange Township, N.J. before closing in 2004.

The Hospital’s pension plan was originally covered by ERISA and protected by PBGC. However, in 2003, after the hospital became affiliated with Cathedral Healthcare System Inc., the Internal Revenue Service determined that the hospital’s pension plan had become a church plan, which removed it from PBGC’s protection. Soon after that, the hospital began winding down its operations and laying off employees.

Over the past several years, at the request of the Pension Rights Center, PBGC worked with the hospital’s former staff and the IRS to revisit that designation. IRS recently set the designation aside and PBGC can now cover the pensions. The plan is within months of running out of money, so if PBGC had not stepped up benefit payments would have stopped.

“Why did PBGC push to take on this substantial financial responsibility?” said PBGC Director Josh Gotbaum. “The answer is simple. Our job is to provide a safety net for pensions. In this case, we realized we could restore the safety net — so we did.”

In a letter posted on May 10th, the Pension Rights Center praised PBGC for pushing to protect the hospital’s retirees. “The PBGC’s actions helped rectify an injustice that the law never intended, and illustrate your agency’s strong commitment to the protection of pension plans and participants.”

According to PBGC estimates, as of Jan. 1, 2009 (the plan termination date), the plan had $11 million in assets to pay $41 million in benefits. The agency expects to cover the entire $30 million shortfall and expects to pay the benefits owed under the plan.

Retirees will continue to get benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.

What were they thinking?

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PBGC: Protector or Predator?

This was going to be a straightforward blog on the PBGC takeover last week of “three pension plans that cover nearly  1,800 people sponsored by Dewey & LeBoeuf LLP”, a law firm that’s about to tank.

I was going to go through a list of New Jersey’ 50 most powerful law firms and see if they had similar problems* but then I looked up the three Dewey & LeBoeuf plans and found a completely different set of issues.

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