I have worked in and around the Federal government for a long time, so it’s sad to see how little the general public knows about the workings and services provided by the government. This is one of occasional posts about little known Federal organizations.
I’m guessing that very few people
know about the Pension Benefit Guaranty Corporation (a Federal agency). It was created by The Employee Retirement
Income Security Act (ERISA) legislation passed in 1974…. Basically, It’s purpose is to insure the
viability of self-funded corporate pension plans. The companies pay into a PBGC fund based on
the number of employees enrolled in their pension plans…. So this agency is
self-funded, and Congress sets the rates that companies pay.
Their 10 biggest ‘bail outs’
were:
|
Firm and Year Terminated
|
Total Claims
In Billions
|
Vested Participants
|
Average Claim
Per Person
|
|
1. United Airlines (2005)
|
$7.4
|
123,957
|
$60,033
|
|
2. Delphi (2009)
|
$6.1
|
69,042
|
$88,475
|
|
3. Bethlehem Steel (2003)
|
$3.7
|
91,312
|
$40,021
|
|
4. US Airways (2003)
|
$2.8
|
55,770
|
$49,337
|
|
5. LTV Steel (2002, 2003, 2004)
|
$2.1
|
83,094
|
$25,694
|
|
6. Delta Air Lines (2006)
|
$1.6
|
13,291
|
$123,473
|
|
7. National Steel (2003)
|
$1.3
|
33,737
|
$37,811
|
|
8. Pan American Air (1991, 1992)
|
$0.8
|
31,999
|
$26,285
|
|
9. Trans World Airlines (2001)
|
$0.7
|
32,263
|
$20,717
|
|
10. Weirton Steel (2004)
|
$0.6
|
9,410
|
$68,064
|
|
Top 10 Total
|
$27 B
|
543,875
|
$49,933
|
According to Wikipedia…During
fiscal year 2010, the PBGC paid $5.6 billion in benefits to participants of
failed pension plans. That year, 147 pension plans failed, and the PBGC's
deficit increased 4.5 percent to $23 billion. The PBGC has a total of $102.5
billion in obligations and $79.5 billion in assets. PBGC pays monthly retirement benefits to
approximately 631,000 retirees of 3,800 terminated defined benefit pension
plans. PBGC is responsible for the current and future pensions of about 1.3
million people.
So, everyday the Federal
employees at PBGC show up to work to shore up the failings of major
corporations who fail to adequately fund pension plans, or whose pension
investments have soured, or whose business falls apart for other reasons.
The idea that corporations do
things better and more efficiently than the Federals government continues to
stir the political pundit gabfests. You’ve heard many variations on the theme:
· ‘get the government off of the backs of industry’
· ‘the government stifles business’
· ‘regulations constrain the job creators’
· ‘government agencies are ineffective’
· ‘bureaucrats don’t provide needed functions’
· ‘government welfare only goes to poor people’
· … and other opinions of that ilk ….
The continual denigration of
Federal agencies and the valuable work they do, erodes the confidence the
American public has in their government, and sheds little light on what essential
functions are performed in all of those Washington D.C. cubicles.
All too many ill-informed
citizens support political positions and philosophies that are not in their own,
(and other citizens’) long-term economic security interests. They don’t realize how much the government
actually does, albeit quietly, and out of the spotlight of mainstream press
coverage. It would be devastating for a
citizen to lose a promised pension, after spending 30 years of their working
lives trying to accumulate enough to sustain themselves in a dignified
retirement. Without PBGC there would be
no safety net for them.
More ‘alphabet soup’ agency posts
coming soon. Leave suggestions in the
comments.
