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Table Of Contents

Pension Plan Assets
Pension Plan Liabilities
TABLE 1 Participant Behavior in Ongoing Plan vs. At-Risk Plan
Other Funding Safeguards Established by the PPA
PPA Benefit Restrictions in Underfunded Plans
Pre- and Post- PPA Treatment of Credit Balances
Premiums
Po liti cal Economy Factors
Filling the Hole: Options for Assessing the Costs
P. 1
Pension Wise by Charles Blahous

Pension Wise by Charles Blahous

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Published by Hoover Institution
America’s insurance system for single-employer pension plans, operated by the Pension Benefit Guaranty Corporation (PBGC), is under serious financial strain. In Pension Wise: Confronting Employer Pension Underfunding—and Sparing Taxpayers the Next Bailout, Charles Blahous—one of the nation’s foremost retirement security experts—explains the origins and dangers of current underfunding in our single-employer defined-benefit pension system and offers principles to underlie a solution.

Blahous details both the technical reasons behind pension plan underfunding and the political considerations that prioritize the near-term financial demands of employers and pension beneficiaries over the long-term fiscal health of the pension insurance system. The author also presents the fundamental value judgments concerning who should bear the cost of filling the PBGC shortfall and to what extent the risk of financing pension benefits should continue to be shifted away from plan sponsors, either to other employers or to taxpayers at large. Although acknowledging that there are no obviously correct answers, he suggests a range of reforms to improve the pension insurance system’s operation and to resolve its projected shortfall.

Charles Blahous, one of the nation’s foremost retirement security experts, serves as one of two public trustees for the Social Security and Medicare programs. Blahous served as deputy director of President George W. Bush’s National Economic Council and, before that, as executive director of the president’s bipartisan Social Security Commission and as special assistant for economic policy.
America’s insurance system for single-employer pension plans, operated by the Pension Benefit Guaranty Corporation (PBGC), is under serious financial strain. In Pension Wise: Confronting Employer Pension Underfunding—and Sparing Taxpayers the Next Bailout, Charles Blahous—one of the nation’s foremost retirement security experts—explains the origins and dangers of current underfunding in our single-employer defined-benefit pension system and offers principles to underlie a solution.

Blahous details both the technical reasons behind pension plan underfunding and the political considerations that prioritize the near-term financial demands of employers and pension beneficiaries over the long-term fiscal health of the pension insurance system. The author also presents the fundamental value judgments concerning who should bear the cost of filling the PBGC shortfall and to what extent the risk of financing pension benefits should continue to be shifted away from plan sponsors, either to other employers or to taxpayers at large. Although acknowledging that there are no obviously correct answers, he suggests a range of reforms to improve the pension insurance system’s operation and to resolve its projected shortfall.

Charles Blahous, one of the nation’s foremost retirement security experts, serves as one of two public trustees for the Social Security and Medicare programs. Blahous served as deputy director of President George W. Bush’s National Economic Council and, before that, as executive director of the president’s bipartisan Social Security Commission and as special assistant for economic policy.

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Published by: Hoover Institution on Jan 25, 2011
Copyright:Traditional Copyright: All rights reserved
List Price: $14.95

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04/07/2015

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Hoover Institution added this note
Charles Blahous on the American Airlines pension situation "...a case study in what happens when lawmakers react to pension underfunding by deliberately allowing more of it. Congress needs to think twice before extending this mistake to the entire community of pension plan sponsors...the risk that the nation’s pension insurance system will become untenable continues to climb" http://bit.ly/w0wbcj
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