Does reform ask too much of sponsors? Risks of trying to improve DB and PBGC funding.(defined benefit)(Pension Benefit Guaranty Corp.)

Pensions & Investments, March, 2005 by Johnston, Mike

Byline: Mike Johnston Now that the Bush administration has announced a broad overview of proposed new pension funding rules, it's worth asking whether these proposals (if adopted in total) will be helpful or harmful to the pension system overall. Let's first concede three things: if adopted, the rules will result in better funding, they will shore up the Pension Benefit Guaranty Corp.

and they will provide more timely information about the status of pension funding. On the surface, the proposed legislation sounds like an ideal solution. But it's important to note these rules will also increase employer risk and the volatility of pension costs - which might simply expedite the employer exodus from defined benefit to defined contribution plans. These...

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