According to Reuters, it looks like there's another battle brewing over the pension system.
Corporate employers and labor unions said Monday they were worried about a new Capitol Hill proposal to tighten the definition of when pension plans are in such bad financial shape they must add cash.
It looks like it will be a political battle to see who gets to determine funding levels for pensions: governmental regulations, or the pensions themselves. 44 million US workers relying on pensions hang in the balance.
I wonder if anyone's asked them what they think?
So here's the bad news:
Defined benefit plans, which pay a fixed amount to retired employees, are underfunded as a group by $450 billion. The agency that insures them, the Pension Benefit Guaranty Corp (PBGC), is running a $22.8 billion deficit.
Here's the scary news:
House and Senate negotiators are discussing a proposal that would designate a plan at risk of default if it is less than 70 percent funded, aides said. The lawmakers were scheduled to meet again on Monday.
Legislators have already looked at this issue.
Last year the Senate passed a pension bill with language to make companies with poor credit ratings such as General Motors Corp add cash to their plans. But many employers opposed the proposal and lawmakers began looking for an alternative.
So, what some thought of as an "entitlement" is being treated a bit like paying the minimum on a credit card balance.
So, here's a thought. Let's say Congress determines a pension fund must be 70% funded, let me ask you something.
What percentage are you in?
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