While many things are being done today to change ERISA for future participants, Kathleen Utgoff believes the wrong questions are being asked and the wrong areas are being addressed.
Ms. Utgoff, former Pension Benefit Guaranty Corp. executive director, said a false alarm has sounded that says legislation is critical to stop the increases expected in the PBGC's current $2.6 billion deficit and the $53 billion liability that defined benefit pension plans carried in 1992.
This false alarm has overshadowed more overwhelming questions that should be addressed, Ms. Utgoff said.
"We're wasting time on a crisis atmosphere when it doesn't even exist,"said Ms. Utgoff, an economist at the law firm Groom and Nordberg, Washington. "We're not focusing on the real problem, which is 50% of the population does not have a pension."
The main focus is on legislation pending before Congress that would strengthen funding standards for underfunded plans and change the premium paid to the PBGC by the underfunded plans.
"The PBGC is in fine financial state," Ms. Utgoff said. "It does not need an increase in premium."
According to the PBGC's 1993 annual report, the agency holds nearly $9 billion in assets. A report issued by the Pension Issues Coalition, a group of major U.S. companies opposing the legislation, said the PBGC collects $1 billion in premiums annually.
To solve the problem, Ms. Utgoff said lawmakers need to determine whether they want to socialize PBGC debt or whether costs should be imposed on sponsors with underfunded plans.
But the question of coverage and who should pay will constantly evolving, said Robert Nagle, former general counsel for the Senate Labor Committee during ERISA's inception and former PBGC executive director.
"It's always been a question of how much risk should be imposed on PBGC and the premium payors to accommodate the needs of poorer funded plans," Mr. Nagle said. "This is always going to be a matter of degree and all along the way, adjustments to that degree need to be made."