The Senate Finance Committee asked the Government Accountability Office to study whether the PBGC can handle the expected increase in defined benefit plan freezes and terminations stemming from the new Pension Protection Act.
"Whatever the future holds for defined benefit plans, these plans remain a key retirement security component for today's older workers and retirees. We must be sure that the PBGC is both structured properly and performing properly to deal with these new challenges," Sen. Charles Grassley, R-Iowa, the committee's chairman, and Sen. Max Baucus, R-Mont., wrote to the GAO.
The senators wrote that benefits paid by the PBGC grew to $3.7 billion for 698,000 participants in 2005 from $900 million for 243,000 participants in 2000. In addition, another 489,000 participants in plans already trusteed by the PBGC will receive benefits when they become eligible, the senators said.
"This rapid an increase in participants, benefit payments and investments would be a challenge to any organization," the senators said. "We are particularly concerned in how PBGC is handling this challenge and whether legislative changes are needed in PBGC's structure, appropriations, or law."
"The PBGC stands ready to cooperate with any review that GAO undertakes to answer this congressional inquiry," according to Jeffrey Speicher, PBGC spokesman.
