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Subject: Pension Benefit Guaranty Corporation

Bart, you wrote:

> I don't have the details, but there's some government entity that guarantees 
> everybody's pension fund and it's missing hundreds of billions of dollars, too.

It's the Pension Benefit Guaranty Corporation (PBGC) created in 1974 as part of the ERISA legislation. 
It provides an "insurance pool" similar to the one the FDIC provides to "insure" bank deposits. 
The ERISA law is *WHY* the United Auto Workers pensions from GM are FULLY FUNDED.

GM has NO LIABILITY for pensions owed to the United Auto Workers, because that money 
is already set aside in secured investments (U.S. Treasury Bonds e.g). Under ERISA, GM and 
other companies that offer defined benefit pensions have to put money in escrow to cover those pensions.

Defined benefit pensions are the old fashion type where you worked for the company for 20 years 
and got a gold watch & so much every month for the rest of your life.

Where GM has unfunded pension liabilities is for the golden parachutes promised top executives. 
That's the reason GM wants to break the union contracts, so it can raid the UAW escrow accounts 
to pay executive pensions and dump the pension costs for UAW onto the PBGC.

The Pension Benefit Guaranty Corporation was set up to insure those defined benefit pension plans 
in the event a corporation failed to fully fund them and then went bankrupt. Any company that has 
a defined benefit pension plan has to pay taxes into the the insurance fund.

The PBGC doesn't have funding to cover all the pensions that are being dumped on it. The "premiums" 
paid into the PBGC are just like the "premiums" paid into the FDIC; they're dumped into the general 
revenue stream of the United States Government along with your Social Security and Medicare 
withholding which are technically insurance ... taxes as premiums.

Remember the Social Security "Lock Box"?

So there's not really any money "missing"; the government got the money and used it to provide tax breaks for the ultra rich.

The real problem is that corporations are using chapter 11 bankruptcy to avoid statutory requirements 
to fully fund defined benefit pensions and to breach contractual obligations to their union employees.

The PBGC is supposed to be the agency that covers that default. 
 John S

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