#256 Shortfall shorthairs

So I’m reading this article. And it’s on the Pension Benefit Guaranty Corporation. Now first off, let me say what triggered my interest were the words pension and corporation in the same title. You just don’t see that anymore. Since the Wall Street raiders of the eighties and nineties leaned down their companies to make them more attractive to stockholders you don’t see many pensions cluttering up the liabilities column. But I was wrong in my conclusion jumping as usual. Turns out the Pension Benefit Guaranty Corporation isn’t a company at all, it’s a federal agency. And its job is to guaranty the continuation of promised pension benefits to employees of companies who have gone belly-up. Belly-up is a stock market euphemism for bankruptcy. Not the sort of bankruptcy that you and I have, where we don’t have any money. The kind of bankruptcy that big corporations do, where they realign and restructure and pay all their top management million-dollar golden parachutes, their common stockholders zip, and issue pink slip to their now ex-employees worth one dollar and one free coffee drink at the local espresso stand. Talk about generosity, severance pay and a machiato.
The gist of the article was that the federal agency that guaranties continuations of pensions when companies go bankrupt is itself about to go bankrupt. It had 56.5 billion in assets to cover 79.2 billion in liabilities. As federal deficits go pretty paltry. They ought to be ashamed. Hmm. What’s wrong with this picture? If I had one third less assets than I had liabilities I would already be bankrupt and then some. The federal agency has just reached the worried stage.
But the reason they are where they are is not because of government bureaucratic mismanagement, it’s because the big companies who underfunded their pension plans during the good old days are now going B-K and dumping their pension liabilities on the Pension Benefit Guaranty Corporation. See, the companies were supposed to fund their own private pension plans and pay an insurance premium to the PDGC in case some unforeseen economic disaster came about. Turns out it was cheaper to pay the insurance premium to the PBGC, than it was to actually fund their pension plans. Or keep the pension plan money in a hands-off status when things got rough. When employees do finally get their benefits from the government agency they get less than they were originally promised by the private company. Betcha that’s a nice thing to find out after slaving 30 years for the same boss. Oh by the way, that pension thing I promised you to reward your loyalty and keep you from selling your skills to another company, just kidding, heh heh. Hope you got social security. Oh yeah Social Security. That’s the thing they want to privatize isn’t it?
America, ya gotta love it.