Wednesday, May 20, 2009

PBGC deficit has exploded in the past six months

Deb Reichmann of the Associated Press reports today that Congress is looking more closely at both the Pension Benefit Guaranty Corporation, and at the rules that companies must follow in funding their pensions. The story is here. The Washington Post printed a synopsis of the story on p A15 on Wednesday May 20.

Because of the severe recession and poor market performance in the past nine months, the deficit for PBGC has tripled since Sept 30, now over $33 billion. This raises concerns about the possibility of another Congressional “bailout” which PGBC denies.

There are allegations of conflict of interest concerning the PGBC former director, Charles E.F. Millard.

Update: May 22

The Washington Post has an important story in the Business Section by David Hilzenrath, "U.S. Pension Insurer May Need Aid as Deficit Soars: Shortfall Fed by Flood of Corporate Bankruptcies", link here.

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