US - Analysis prepared by the Pension Benefit Guaranty Corporation (PBGC) has found that all three pension proposals being discussed by Congress would pile billions of dollars onto its US$23bn deficit in the next decade.
According to the analysis, the first proposal would require companies to contribute $1.23trn to their plans over the next 10 years and would increase the PBGC's deficit by $14.9bn, while the second proposal would require companies to contribute $1.22trn to their plans and increase the PBGC deficit by $15bn.
The third would require companies to contribute $1.21trn and increase the PBGC deficit by $15.2bn.
And the PBGC's situation has been further exacerbated by reports that both Delta and NorthWest Airlines could be forced to dump their pensions, with billions of dollars in deficit, on the organisation should concrete pension reform not be achieved before the August congressional recess.
The airlines have lobbied for a significantly longer timeframe to pay off their liabilities, an issue that has proved difficult to resolve thus far, but an NWA spokesperson said the airline was still hopeful it could be achieved before the August deadline.
The PBGC declined to comment further on the airline provision, or any other aspect of the pension legislation under consideration.
George Miller, senior democrat on the House Education and the Workforce committee, said of the protracted reform talks: It is amazing to me that Republican leaders have spent seven months negotiating with each other over this bill and still can't get it right. This pension reform is the worst of every possible world. By driving up the PBGC's deficit, it will increase the risk of an eventual taxpayer bailout of that agency.
In related news, the PBGC announced the appointment of Richard Macy as COO. Macy joined the organisation after more than 20 years with ADP, a provider of employee administration services.
His most recent post was vice president, support services, with ADP COBRA/FSA Services
By Damian Clarkson
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