What a simple solution to the Pension Benefit Guaranty Corp.'s massive deficit: risk-up the assets and earn your way out (“PBGC policy has more risk,” At Deadline, Pensions & Investments, Aug. 18). It's so simple one wonders why United Airlines or Bethlehem Steel didn't try it.
Per UAL's 2004 10-K: equity allocation was 63% in 2004 and 60% in 2003, just before the PBGC took over its plans in 2005.
Per Form 5500's Schedule H, Bethlehem Steel's equity allocations were 73% in 2002 and 72% in 2001, just before dumping them on the PBGC in 2003 — assuming Bethlehem's “collective trusts” were all equity, as they mostly are.
On the other hand, one can hardly blame the PBGC for “doubling down” as Congress gave them an impossible business model. So why not “pass the buck” back to Congress, just as UAL and Bethlehem Steel passed the buck — the pension put option — to the PBGC?
Jack R. Buchmiller
Stamford, Conn.
