NEWS RELEASE

November 11, 2011
PR-11/17
For additional information:
Jason Hammersla
202-289-6700

Forthcoming PBGC deficit announcement a "non-event"

Dubious claims should not be used to justify sweeping changes affecting employee pensions

WASHINGTON, DC — Within the next week, the Pension Benefit Guaranty Corporation (PBGC, the federal insurer of employee pension plans) will issue its annual report and announce its current operating deficit. In 2010, the agency reported a deficit of $23 billion and this number is expected to increase. The agency and the Obama Administration have repeatedly suggested that this deficit requires sweeping and unprecedented changes to the pension plan insurance system.

Employer sponsors of defined benefit pension plans have consistently argued that the methodology of this calculation is seriously flawed and noted that Congress has not even examined the assumptions on which this "deficit" is based.

The following document, undersigned by the American Benefits Council, the Business Roundtable, The ERISA Advisory Committee and the U.S. Chamber of Commerce, describes why the PBGC's supposed deficit is misleading:

PBGC Deficit: A Non-Event on the Horizon
http://www.americanbenefitscouncil.org/documents/pbgc-deficit_group-tp_111111.pdf

As noted in a September 14 article in BNA's Pension & Benefits Daily, "Proposed PBGC Premium Changes–A Reality Check," by Kenneth W. Porter, "the reported PBGC shortfall may significantly overstate the true long-term needs of the PBGC. The agency's estimated shortfall appears largely temporary and is caused by severe economic assumptions."

For more information on defined benefit pension plans and the PBGC, or to arrange an interview with Council policy staff, please contact Jason Hammersla, Council director of communications, at jhammersla@abcstaff.org or by phone at 202-289-6700 (office) or (202) 253-5458 (cell).

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The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.