The Pension Benefit Guaranty Corporation (PBGC) is experiencing significant long-term deficit and many large plans are underfunded. The PBGC is exposed to considerable risk from underfunded plans concurrently with its revenue base being threatened by the decline in defined benefit plan participation. The legal framework governing pension insurance and plan funding has been unsuccessful in ensuring that plan sponsors deliver on their pension promises. PBGC’s current premium structure does not reflect the risks to its insurance program. Additionally a lack of timely and accurate information makes it difficult to have an understanding of the financial condition of pension plans. Comprehensive reform would: improve accuracy of plan funding while minimizing complexity, develop a more risk-based PBGC insurance premium structure, modify PBGC guarantees of certain plan benefits, and improve plan information transparency for pension plan stakeholders without overburdening plan sponsors.

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