John & Heidi share funny stories of people doing weird things... plus John chats with Charles M. Tatelbaum, a Director of Tripp Scott law firm, PA and chair of the bankruptcy and creditors' rights department focuses his practice on bankruptcy and creditors’ rights issues, complex business litigation, Uniform Commercial Code transactions and lender liability litigation and other types of secured transactions, as well as domestic and international letters of credit.
“The Pension Benefit Guaranty Corporation (PBGC) which was established by the 1994 ERISA Act was set up to insure individual and multi-employer pension funds from loss to the beneficiaries. The multi-employer currently fund covers 10 million employees in over 1,400 multi-employer pension plans (many set up under collective bargaining agreements). Although most of the multi-employer plans are currently financially healthy, approximately 1.5 million people are now in jeopardy that their plans will fail. This could put an undue strain on the PBGC from which it may not recover.”
“The Central States Pension Fund, one of the nation’s largest multi-employer pension funds, has recently advised the US Treasury Department that unless Treasury would permit it to reduce retiree benefits (which the Treasury Department refused to do), it would have no choice but to seek financial assistance from the PBGC, putting an even greater strain on the financially troubled federal pension insurance fund.”
“In March of 2016, before any major failures or bankruptcies, the PBGC estimated that without a revenue increase of federal funding, there was a 42% chance of insolvency in 10 years and a whopping 93 % chance of insolvency in 20 years. This estimate is based on there not being a major multi-employer failure, which now seems not to be the case.”
“If one or more major employers in a multi-employer fund go bankrupt with an underfunded portion of its plan, the PBGC has to make up the difference. If in the next few years, especially with the proliferation of bankruptcies of large companies in the energy sector (oil, gas and coal) as well as the retail sector, and there are major underfunding situations, the PBGC’s insolvency may be accelerated.”
“All past efforts at obtaining Congressional help to modify the laws have failed, and a current effort by Senator Bernie Sanders and others seems to be futile in the deadlocked Senate and House”
“If the PBGC becomes insolvent, absent a significant government and taxpayer bailout, pension benefits to millions of retirees would be reduced or eliminated.”
LEARN MORE HERE - http://trippscott.com/attorneys/charles-m-tatelbaum?utm_source=newsletter&utm_medium=email&utm_campaign=story_idea_us_govt_insurer_may_be_headed_to_insolvency
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