Headlines about "Actuarial - PBGC reform"

Gathered from the web by the editors at BenefitsLink.com.
[Opinion] How the PBGC Plans to Increase Profits Without Taking on Risk
Excerpt: "The Pension Benefit Guaranty Corporation, which is supposed to guarantee that those of us with pensions will get paid even if our employers go broke, has a $14 billion deficit. But it claims to have found a way to climb out of that hole while reducing the risk of its investments. It plans to move a lot of money out of bonds and into stocks, with sizable investments going into real estate and private equity funds." (The New York Times; free registration required)

PBGC Head Fires Back on GAO Investment Policy Criticisms
Excerpt: "The nation's private-sector pension insurer on Monday defended itself against questions raised in a new Congressional oversight report about the Pension Benefit Guaranty Corporation's (PBGC) new investment policy. The Government Accountability Office (GAO) report, 'Implementation of New Investment Policy Will Need Stronger Board Oversight,' raised questions about whether the PBGC board has been sufficiently involved in approving investment policy changes in concept - including the one the board okayed in February 2008 . . . ." (PLANSPONSOR.com; free registration required)

PBGC Assets: Implementation of New Investment Policy Will Need Stronger Board Oversight (PDF)
62 pages. Excerpt: "GAO recommends (1) improvements to the way that PBGC's board monitors progress in achieving investment policy goals, and (2) additional analyses on the new investment policy. In response, PBGC's board stated its informal guidance is appropriate oversight. GAO states this type of guidance is not strong enough for investing $68 billion. Further, PBGC is conducting additional analysis on the new policy." (U.S. Government Accountability Office)

Pension Benefit Guaranty Corporation Downplayed Investment Risk - GAO Criticizes Volatile Strategy
Excerpt: "The federal agency charged with backstopping pension benefits for 44 million Americans has understated the risks of its new investment policy, a congressional watchdog said Monday. The Government Accountability Office (GAO) said in a report that the Pension Benefit Guaranty Corp.'s new strategy could significantly boost the PBGC's investment returns, but it 'will likely also carry more risk than acknowledged by PBGC's analysis.'" (The Washington Times)

Federal Pension Agency Seeks Investment Partners
Excerpt: "The federal agency that backs the retirement benefits of 44 million Americans is seeking financial firms to invest about $2.5 billion of its assets in private equity and real estate. The Pension Benefit Guaranty Corp. . . . adopted a new policy in February to shift a greater portion of its $55 billion in assets to stocks and alternative investments such as private equity funds." (AP via Forbes.com)

[Guidance Overview] PBGC Permits Appeals Board to Refer Some Appeals to Other Departments
Excerpt: "The PBGC has issued final regulations permitting its Appeals Board to refer certain appeals to Appeals Board staff or other internal departments for a written response. The amendments also include some minor clarifying and technical changes to the rules for administrative review of agency decisions." (Wolters Kluwer)

PBGC Amends Appeals Procedures
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) announced it is publishing a final rule amending its regulation on Rules for Administrative Review of Agency Decisions to clarify that the agency's Appeals Board may refer certain categories of appeals to other PBGC departments for a written response." (PLANSPONSOR.com; free registration required)

PBGC Releases Bankruptcy Plan Termination Rule
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) has proposed a rule to protect the agency from liability growth during employer bankruptcy proceedings." (PLANSPONSOR.com; free registration required)

New PBGC Investment Strategy Poses Increased Risk During an Economic Downturn, Says CBO Chief
Excerpt: "A new diversified investment policy adopted by the PBGC is likely to produce higher returns over the long run, but also increases the risk that the PBGC will not have sufficient assets to pay benefits during an economic downturn, the director of the Congressional Budget Office (CBO) said in an April 24, 2008 letter." (Wolters Kluwer)

[Opinion] CBO's Letter on Investment Policy Recently Adopted by the Pension Benefit Guaranty Corporation (PDF)
6 pages. Excerpt: "The effect on taxpayers of the change in PBGC's investment strategy depends on assumptions about future premiums and benefits and expectations about the government's ultimate responsibility to covered retirees." (U.S. Congressional Budget Office)

[Opinion] CBO Director's Blog on April 24 Letter Issued on Pension Benefit Guaranty Corporation
Excerpt: "CBO issued a letter today reviewing a new investment policy recently adopted by the Pension Benefit Guaranty Corporation (PBGC). As part of its analysis, CBO reviewed the assumptions underlying PBGC's decision and assessed the revised policy's potential for affecting the corporation's ability to meet its obligation to retirees and for increasing costs to taxpayers." (U.S. Congressional Budget Office)

[Guidance Overview] PBGC Implements Variable-Rate Premium Changes (PDF)
Excerpt: "On March 21, 2008, PBGC published a final rule (73 Fed. Reg. 15065) that, among other things, implements the statutory changes to the variable-rate premium (VRP) that go into effect starting with the 2008 plan year. The final rule, according to PBGC, is 'nearly the same' as the proposed rule published May 31, 2007 (72 Fed. Reg. 7755). This article briefly summarizes key provisions of the final rule, which is available at http://edocket.access.gpo.gov/2008/pdf/E8-5712.pdf" (ASPPA via Keightley & Ashner LLP)

The Task - Taking Risk Out of Pensions
Excerpt: "A Williams College economics professor has received a $40,000 Social Security Administration grant to fund research that has the potential to effect every working person in the United States.David Love, a Williams College assistant professor of economics, is studying the effects of risky pensions on personal savings and labor supply decisions." (Berkshire Eagle)

In Policy Shift, PBGC Turns to Stock Market Shrinking the Portion of Bonds in Its Portfolio
Excerpt: "After five years of strictly matching its assets to its liabilities, the nation's defined-benefit pension insurer will stock its investment portfolio with a larger percentage of equities and a new host of 'alternative investments,' including real-estate and private-equity partnerships." (CFO.com)

[Guidance Overview] PBGC Provides Premium Guidance for Defined Benefit Plans (PDF)
4 pages. Excerpt: "These developments affect sponsors of qualified defined benefit plans that are subject to PBGC premium requirements, including cash balance plans and multiemployer plans. Governmental plans and plans sponsored by churches that do not elect to be covered by ERISA ('non-electing church plans') are not subject to these rules." (Prudential Retirement)

PBGC to Diversify Its Portfolio
Excerpt: "The agency, which insures basic pension benefits for U.S. workers and retirees, says diversifying its mix of investments would significantly increase its chances of erasing its $14 billion deficit within the next decade. Last year, about 72% of its assets were in cash and fixed-income securities." (Wall Street Journal)

PBGC Says Goodbye to LDI
Excerpt: "The Pension Benefit Guaranty Corp. is abandoning its 4-year-old liability-driven investment policy, reallocating almost $15 billion to equities and alternative investments." (Pensions & Investments)

PBGC Increase, New Savings Accounts in President's 2009 Budget
Excerpt: "The proposal is aimed in part at helping the Pension Benefit Guaranty Corp. close a $13.1 billion deficit in its single-employer program, according to the budget." (Workforce Management (free registration required))

PBGC Premium Hike and Employer Retirement Savings Accounts in 2009 Budget
Excerpt: "President Bush announced a legislative proposal . . . allowing the PBGC to raise premiums it charges underfunded pension plans. . . . The 2009 budget also includes a series of proposals . . . that would simplify the rules applied to a variety of defined contribution and other savings plans. Among other things, the proposals would consolidate 401(k), SIMPLE 401(k), SARSEPS (salary reduction simplified employee pensions), thrift plans, 403(b) and governmental 457(b) plans into a new Employer Retirement Savings Account." (Pensions & Investments)

[Guidance Overview] PBGC Updates Premium Rules for DRA and PPA Changes
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) has issued final regulations to implement certain changes to the flat- and variable-rate premiums made by the Deficit Reduction Act (DRA) of 2005 (P.L. 109-171) and the Pension Protection Act (PPA) of 2006 (P.L. 109-280), and to add provisions for the new termination premium established by the DRA and modified by the PPA. 72 FR 71222 (December 17, 2007). The final regulations closely follow proposed rules the PBGC released early in 2007." (Deloitte via BenefitsLink.com)

Investment Policy on PBGC's Agenda; Practitioners Call for More Aggressive Mix
3 pages; on the target page, click on the link having the title shown above. Excerpt: "The Pension Benefit Guaranty Corporation has contracted with an outside investment adviser to review the agency's assets and liabilities in light of the best investment practices and asset allocations of similar institutions, John H. Hanley, director of PBGC's Legislative and Regulatory Department, said in discussing issues the agency will be dealing with in 2008." (From BNA's Pension & Benefits Daily; reprinted with permission by Keightley & Ashner LLP)

Table: Present Value of PBGC Maximum Guarantee
Excerpt: "The 2008 table was developed using the 417(e) segment rates for August 2007 (5.02%, 5.18% and 5.28% respectively) and the 417(e) applicable mortality table for 2008 provided in IRS Revenue Ruling 2007-67." (Pension Benefit Guaranty Corporation)

Overview: PBGC's Flat-Rate Premium Increase, Termination Premium, and Small Employer VRP Cap (PDF)
6 pages. Excerpt: "The rules governing Pension Benefit Guaranty Corporation premiums have recently undergone significant changes, and more change is on the horizon. Flat-rate premiums shot up for the 2006 plan year and are now statutorily ordained to increase over time. An ongoing employer whose plan terminates in a distress or involuntary termination on or after Jan. 1, 2006, may have to grapple with a new and hefty ''termination premium.''" (The Bureau of National Affairs, Inc. via Keightley & Ashner LLP)

Overview: PBGC's Flat-Rate Premium Increase, Termination Premium, and Small Employer VRP Cap (PDF)
Excerpt: "PBGC premiums are likely to move higher for all plans in terms of the flat-rate premium and for many plans in terms of the VRP. Understanding the everchanging premium rules will help practitioners properly advise their clients in this area of ever-increasing complexity and importance." (Keightley & Ashner LLP)

Overview: PBGC Update of Regs on Premiums to Reflect DRA and PPA
Excerpt: "The regulations implement changes to the law made by the Deficit Reduction Act of 2005 (DRA; P.L. 109–171) regarding plan years beginning, and terminations occurring, after 2005; and made by the Pension Protection Act of 2006 (PPA; P.L. 109–280) regarding plan years beginning after 2006." (Wolters Kluwer Financial Services)

Overview: PBGC Guidance on Calculating Present Value of Guaranteed Benefit, Issues 2008 Table
Excerpt: "The PBGC has provided guidance, in the form of a Technical Update, on determining the present value of the PBGC maximum benefit guarantee for purposes of the benefit restrictions imposed by Code Sec. 436(d)(3)(A)(ii) and ERISA §206(g) (3)(C)(i)(II)." (Wolters Kluwer Financial Services)

PBGC Deficit Declined to $13.1 Billion in Fiscal Year 2007
Excerpt: "The 2007 results represent a $5 billion improvement over last year's $18.1 billion shortfall." (CCH Pension and Benefits)

New PBGC Data Showns Most Retirees' Benefits Not Reduced by PBGC Plan Takeover
Excerpt: "n a news release, the PBGC said that, while federal pension law limits the benefit amount the PBGC may guarantee when it takes responsibility for a failed pension plan, of more than 525,000 PBGC participants studied, only 16% saw their retirement benefits reduced. The average reduction was 28%, according to the release." (PLANSPONSOR.com; free registration required)

Presentation: A Practical Guide to Dealing with PBGC Issues (PDF)
51 pages. The presentation was presented at the ASPPA Annual Conference on October 21, 2007, in Washington, DC. (Keightley & Ashner LLP)

A Private Market Pension Insurance System?
Excerpt: "A new research paper argues that the post-Pension Protection Act (PPA) Pension Benefit Guaranty Corporation (PBGC) still needs fixing including the possible conversion to a private pension insurance model." (PLANSPONSOR.com; free registration required)

Working Paper: Guaranteed Trouble: The Economic Effects of the Pension Benefit Guaranty Corporation
Excerpt: "This paper examines the economic rationale for, historical experience of, and current pressures facing the Pension Benefit Guaranty Corporation (PBGC). . . . The paper then discusses potential ways to reform the PBGC so that it operates more in concert with basic economic principles." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Text of PBGC Strategic Plan FY 2008 -- 2013 (PDF)
8 pages. Excerpt: "This plan identifies key activities that carry out the agency's mission and provides the overarching framework for achievement of agency priorities and allocation of its resources." (Pension Benefit Guaranty Corporation)

PBGC Issues Five-Year Action Proposal
Excerpt: "The nation's private sector pension insurer has worked out a five-year plan for accomplishing its goals - and is now looking for feedback on that plan." (PLANSPONSOR.com; free registration required)

Letter to the Editor: Pension Fund Investments
Excerpt: "'Pensions and the Mortgage Mess' (editorial, Aug. 7) rightly alerts readers to the dangers of pension funds investing in newfangled derivative products or the hedge funds. One also needs to note the dismal future workers face in the large-scale employer abandonment of private pension plans." (David Langer via The New York Times; free registration required)

Senate Leaders Urge Changes in PBGC Governance
Excerpt: "As the Senate Finance Committee prepares to consider the qualifications of President Bush's nominee to head the Pension Benefit Guaranty Corporation (PBGC), the committee's top lawmakers urged the Agency to change its governance structure to better protect pension holders. Charles E.F. Millard, nominated to serve as PBGC director, appeared before the Senate panel on July 25, 2007." (Wolters Kluwer Law & Business)

Significant Guidance Documents - A New Web Page from the PBGC
Excerpt: "PBGC has added a link for Significant Guidance Documents under Laws, Regulations & Informal Guidance. This new page meets the requirements set under the Office of Management and Budget's 'Final Bulletin for Good Guidance Practices,' which requires that each agency maintain a list of current significant guidance documents on its Web site, with links to each document. Most of PBGC's significant guidance documents are already on the Web site under separate headings." (Pension Benefit Guaranty Corporation)

Text of Comments Received on the PBGC Proposed Rule on Variable Premiums (PDF)
4 pages. Excerpt: "The PBGC should clearly state which death benefits are and which death benefits are not treated as vested for variable premium purposes. In particular, the PBGC should clarify whether a death benefit paid in a lump sum form on death while in service is vested for a participant who has met all conditions for the payment of the benefit other than having died." (Pension Benefit Guaranty Corporation)

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