One headline reads ‘these pensions plans are at risk of going broke’.
Another exclaims ‘pension plans for millions of Americans on the brink
of collapse’. Clearly, many older Americans are worried about the
solvency of pensions earned many years back. Companies go belly up in
the meantime. Not enough money is set aside. Or projections as to the
rate of return were too rosy. Or the number of present day workers just
isn’t enough for retirees who stayed on the job for many years and are
living much longer in retirement. It’s a particularly dire situation for
a number of multi-employer pensions for various trades who came
together because the companies involved were rather small. But, you
might say, don’t we have a quasi-governmental back-up, the Pension
Benefit Guaranty Corporation(PBGC), to insure that these obligations
will be met? Well, that entity is in distress, too. The federal
government must act. But will it? We turn to Joshua Gotbaum, of the
Brookings Institution who once ran the PBGC for the answers.
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