It may be hard to believe in today’s environment of increased scrutiny over governmental and private insurers, but the Pension Benefit Guaranty Corporation (PBGC), which is the governmental body created to insure the nation’s pension funds, is on the verge of insolvency, according to commentary by Charles Tatelbaum posted yesterday on ValueWalk.com. Based on recent developments and the PBGC’s publications, current and future retirees may fall victim to a horrific nightmare. In March of this year, the PBGC published a report showing that its multiemployer plan program faces a 43 percent likelihood of insolvency within 10 years if the current level of per participant premiums, which are indexed, remain in place. The PBGC multiemployer program currently protects more than 10 million workers and retirees in about 1,400 pension plans set up under collective bargaining agreements. The ultimate solution may then be a taxpayer bailout. If that occurs, it could be a bailout of astronomical proportions, with the extent of the cost to taxpayers unable to be determined for decades until the increasing shortfalls are remedially remedied.
