PBGC cuts reporting for 90% of plans

[imoldernu]

New PBGC Proposal Would Cut Reporting Requirements for More Than 90 Percent of Companies and Plans

Good? Bad? or non-event?

 

[ERhoosier]

Given the recurring reports of widespread UNDERfunding of private & muni pensions, I see this as a very,very bad idea. Could be like pulling the pin on a financial grenade. Non-event......for now

 

[samclem]

Seems like a bad idea. From the linked article (emphasis added):

The move will exempt from many requirements all small plans and the more than 70 percent of pension plans whose sponsors are financially sound. Some reporting requirements like bankruptcy filings will be eliminated.
[and]
Under the new proposal, many reporting requirements would be eliminated where:

• Either a company or a plan is financially sound. Some three-fourths of all companies and plans will be exempted on this basis.

• A plan is small. Since two-thirds of all plans are sponsored by small businesses, this effort will dramatically expand relief from reporting requirements.
• PBGC can get information from other sources. Through public SEC or bankruptcy filings or filings with other agencies, PBGC can learn about many events without requiring direct reports from the company.

There's not much info out there on the pension plan health of small, non-public companies. The PBGC information can be an important first indicator to employees that their plan is n trouble.

Notice the "or" above. That means the PBGC won't require reporting unless the pension plan is underfunded/weak AND the company itself is in financial trouble.

"One way we encourage companies to keep their pensions is by cutting unnecessary red tape," said PBGC Director Josh Gotbaum. "That's what we're doing here. Not only is it better for businesses and plans, it will let us focus our efforts where they're really needed."

PBGC's change on reportable events is the latest in a continuing effort to preserve plans by making it easier for employers to offer them.

If I'm a worker, especially a young worker, in a company with a shaky pension plan, I want them to stop offering it as soon as possible, give me my credits, and convert to defined contribution so I've got benefits I can count on. That's way better than losing the lion's share of what I thought I had iat some later time.

The PBGC should be working to maintain its own solvency, not turning a blind eye to trouble while "helping" ailing plans to screw over benificiaries in coming years.

 

[ERD50]

If this is actually just cutting unneeded red-tape, then it seems like good thing. I'd like to see some counter-points to that from other groups - is it just red-tape, or is it reducing oversight?

-ERD50