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PBGC Director: We Won't Need a Bailout

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    PBGC Director Joshua Gotbaum on more U.S. workers delaying retirement.

  • Duration 4:14
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This transcript is automatically generated

Let's bring in Joshua got -- he is director of the pension benefit guarantee corporation this is the government agency that -- Private pensions -- goes -- -- Tension is often handed over to this organization and he joins us now from Washington DC it's -- -- this today.

Look down the red ten years from now is your agency going to need a bailout from taxpayers.

No absolutely not BM.

The PBGC.

Has been around for 37 years it was put into operation by the congress to make sure that when a company.

Couldn't deliver on its pensions the PBGC could step in and we have been doing that first 37 years last year we.

Send checks to 800000 people whose pension plans had failed but and this is important.

Pension plans that cover 44 million people.

Are still paying premiums and that's what keeps.

In -- -- we should read I should reiterate that that the premiums paid her paid by the companies that are not paid by the taxpayers that this is an insurance essentially.

And insurance program that's funded by the companies themselves nevertheless.

What kind of deficits are you running today.

Up our deficit.

The last time we reported was 23 billion dollars.

And it's going up and down over the years just to put it in context of ABC's been in business for 37 years.

And for all except six of them it's reported a deficit and so what happens is.

We.

Since we are supported -- you say not by taxpayer funds but by premiums from the pension plans -- the companies that support them.

Is that pension that premiums get increased and increased and increased.

And I will -- that need to happen doesn't not because congress actually has to do that and there's a proposal from the Obama administration.

That actually would like to give you -- that an organization the ability to.

Decide what kind of premiums to charge.

Yes and and the reason for that is pretty simple.

We are -- every other private insurance company and frankly most of the other government insurance programs.

Have the agency involved setting premiums set based on the company's and the plans that they insure.

Right now the way the system works is.

Congress raises a premium and good companies that companies they pay basically the same premiums as a result.

Companies that are sound companies that note that they are never gonna come to the PBGC are paying for companies that aren't.

Nevertheless like that -- -- we're trying to change that argument against giving you more authority over those premiums.

Is the very fact that you will essentially be deciding which companies are credit credit worthy and which ones are.

Very shaky.

For an organization by the way that has been cited by the Government Accountability Office is having some pretty serious governance problems and other issues.

In how outbid the insurance funds managed.

Up.

I actually think this is a lot easier than most folks from Canada to be not like what I have a pretty day it's just -- yeah it's -- -- matter of opinion and difference of opinion.

No.

I actually don't don't think -- what we're saying is.

If you give us some time.

To use.

Measures of financial soundness that are authority out there in the business community that are already used.

We can.

Set our rates so that.

The folks who are sound aren't pain for the guys were not.

And that doesn't involve reinventing the wheel I I spent half my career in business -- business -- government.

And one of the things that you're learning is whether you're in this is recovered as you want to reward your good customers will right now with the PBGC.

We're essentially making our good customers pay for those that are not.

And we don't think that makes cents.

A -- on the weighted that Joshua thank you for being here it's -- public discussion one that anybody who has a pensioner any taxpayer needs to pay attention to it.

Just -- out -- they -- of the pension benefit guarantee corporation take care.

Thanks take care -- -- where Medicare is.

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