PBGC Future Depends on What Happens to DB Plans

May 20, 2009 (PLANSPONSOR.com) - "The major future issue for PBGC is what happens to defined benefit plans."

That was a key point in the testimony of Dallas Salisbury, President and CEO of the Employee Benefit Research Institute, before the Senate Special Committee on Aging on Wednesday afternoon (see Senate Committee Weighs in on PBGC ). Opening the hearing shortly after 2:00 p.m., Committee Chairman Herb Kohl (D-Wisconsin) noted that with the current state of the economy, the viability of the Pension Benefit Guaranty Corporation (PBGC) is more urgent now than ever.

Kohl noted that the Government Accountability Office (GAO) for years has indicated that the agency does not have the time or resources to perform its necessary operations (see PBGC Programs Designated High-risk by GAO ), PBGC Acting Director Vince Snowbarger said the agency posted a $33.5-billion deficit for the first half of fiscal year 2009 (see PBGC Funding Gap Ballooning as Plan Terminations Increase ), and Congress is now investigating possible impropriety of actions by former PBGC head Charles E.F. Millard during a recent shift in fund allocations (see Former PBGC Head Draws Scrutiny ).

Kohl said that soon he will be introducing legislation to improve agency governance, oversight, and structure. "We must get the agency back on track or we will be faced with absorbing its obligations," he commented.

After Charles E.F. Millard, former PBGC director, declined to answer any and all questions from the committee, invoking his 5th amendment rights, and was excused from meeting (see Millard Invokes Fifth Amendment Rights at Senate Hearing ), Kohl turned the hearing over to Salisbury.