***MEDIA ADVISORY*** Subcommittee to Examine Financial and Management Challenges at PBGC
PBGC Director Joshua Gotbaum to testify
WASHINGTON, D.C., January 31, 2012
On Thursday, February 2 at 10:00 a.m., the Subcommittee on Health, Employment, Labor, and Pensions, chaired by Rep. Phil Roe (R-TN), will hold a hearing entitled “Examining the Challenges Facing PBGC and Defined Benefit Pension Plans.” The hearing will take place in room 2175 of the Rayburn House Office Building.
Approximately 43 million American workers and retirees participate in a defined benefit pension plan. Since 1974, the Pension Benefit Guaranty Corporation (PBGC) has provided a federal safety net to protect workers in the event a defined benefit plan becomes insolvent or terminated. In fiscal year 2011, the PBGC provided monthly pension benefits to more than 819,000 retirees in approximately 4,300 terminated plans at a cost of $5.3 billion.
Despite collecting revenue from a number of sources, including premiums paid by plan sponsors and assets that exist when a pension plan has been terminated, the PBGC currently faces a deficit of $26 billion. The weak economy and recent bankruptcies of several large employers could exacerbate PBGC’s financial standing. Additionally, investigative reports by PBGC’s Inspector General found improper PBGC management of various terminated plans may have resulted in retirees failing to receive the proper benefits.
To help strengthen PBGC’s finances, a number of reforms have been proposed. Effective reform must protect the pensions of workers, support job creation, and not discourage participation in the voluntary pension system.
Thursday's hearing will provide committee members an opportunity to learn about the fiscal and management challenges facing the PBGC, as well as the continued difficulties confronting defined benefit plans. Additionally, members will discuss a number of reforms that have been proposed to strengthen the financial outlook of the PBGC. To learn more about Wednesday’s hearing, visit /hearings.
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