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Today the Joint Select Committee on Multiemployer Plans held a hearing on the financial condition of the Pension Benefit Guaranty Corporation (PBGC). The PBGC is the backstop for private retirement plans that become insolvent. The Chamber has long supported the ongoing viability of the PBGC; however, saving the PBGC cannot depend solely on increasing the premium paid by employers to the agency. In fact, increasing premiums without any other reforms could have the opposite effect by driving employers out of the system or into bankruptcy and leaving the agency without a customer base.
Earlier this year, the Chamber issued joint principles with the National Coordinating Committee for Multiemployer Plans. In these principles, we state that it is important to enact reforms and see their impact before implementing PBGC premium increases. It is critically important that the Joint Committee follow this recommendation.
The PBGC is in a financial crisis. However, mandating additional premium payments will only further bankrupt the system. Instead, the Joint Select Committee should consider reforms that will allow employers to remain solvent which is the best way to insure that the PBGC remains a viable institution.