Pension Benefit Guarantee Corporation Running Out of Cash, Millions Affected, by Mike Mish Shedlock

Anyone who thinks their money is safe because it’s supposedly “protected” by an agency of the federal government needs to quickly acquaint themselves with reality. From Mike Mish Shedlock at mishtalk.com:

The Pension Benefit Guarantee Corporation (PBGC), an entity created to “guarantee” pensions of private corporations, is on the verge of bankruptcy.

Teamsters and other unions are poised to take huge pension hits. Previously, airline employees have taken a hit.

Please consider PBOC Running Out of Cash to Cover Union Pension Funds.

The clock is ticking for 71 penniless union pension funds that rely on a federal insurance company to support their retirees — because the agency itself is also running out of cash, its director said Wednesday.

The Pension Benefit Guaranty Corporation’s limited liquidity is part of the spiraling U.S. pension crisis that threatens to wipe out the retirement savings of more than a million Americans.

The PBGC talked about its reduced circumstances Wednesday as it announced that it is now officially making pension payouts for Teamsters Local 707.

The New York union’s pension fund — covering 4,000 retired truckers across the city and Long Island — hit rock bottom in February.

The PBGC stepped in, as it has with 70 other bankrupt union pensions. But PBGC only has about a decade’s worth of cash in its coffers, director Tom Reeder warned.

Local 707 alone, with its 4,000 retirees, costs PBGC $1.7 million a month, agency officials said.

In order to keep afloat, PBGC doesn’t try to match a retiree’s union pension. The payouts are cut, often down to about one-third of what the worker is due.

{if the fund were to go broke] Retirees could expect to see their benefits slashed by 80%. In other words, less than one-eighth of the $570 average check PBGC is able to give Local 707 retirees now.

To continue reading: Pension Benefit Guarantee Corporation Running Out of Cash, Millions Affected

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One response to “Pension Benefit Guarantee Corporation Running Out of Cash, Millions Affected, by Mike Mish Shedlock

  1. This is an obvious unavoidable outcome.

    I have pointed out the inconsistent premise upon which pension funds are built. They are no more than sophisticated, legalized PonI schemes. Something will have to happen.
    https://survivaltricks.wordpress.com/2016/12/10/can-most-pension-funds-last/

    Like

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