The Pension Benefit Guaranty Corporation may be little-known to most Americans, but it serves as a lifeline for the 1.3 million people who receive retirement checks from it, and the 44 million others whose plans are backed by the agency.As David Kurtz observes, "Bush was able to do for the PBGC what he tried and failed to do for Social Security." Which is to say, of course, ruin it. Duncan Black thinks it was a failed attempt at "plunge protection."
The agency was set up in 1974 out of concern that workers who had pensions at financially troubled or bankrupt companies would lose their retirement funds. The agency operates by assessing premiums on the private pension plans that they insure. It insures up to $54,000 annually for individuals who retire at 65.
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Most of the nation's private pension plans suffered major losses in 2008 and, all together, are underfunded by as much as $500 billion, according to Bodie and other analysts. A wave of bankruptcies could mean that the agency would be left to cover more pensions than it could afford.
Is there anything that failed businessman, born with a spoon in his mouth and cotton in the head, did right?