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Gotbaum also detailed the agency's financial challenges, and outlined an administration proposal to redress them by reforming how PBGC sets premiums. “Thanks to better health, better technology and better lifestyles, today we're living longer, healthier lives,” Gotbaum said during a hearing before the Health, Employment, Labor and Pensions Subcommittee of the House Committee on Education and the Workforce. “That’s great news, but it also means that retirement costs more.” Gotbaum continued, “Today, most people don't think they have enough money to retire - and they're right. The Administration is committed to do what we can do to strengthen retirement security, which is an important priority not only for workers and retirees but also for our economy and our nation." Gotbaum noted there are many government efforts to enhance retirement security, including efforts to preserve existing plans by reducing regulatory burdens; helping establish additional options, such as hybrid DB/DC approaches; and continuing to help people understand their plans and choices. Turning to PBGC's finances, Gotbaum acknowledged the $26 billion gap between what the PBGC owes and its assets (see Some Positives Exist Amid PBGC's Dire Financial Picture). Premiums are too low for the insurance PBGC provides, he said. The agency is funded entirely through insurance premiums paid by plan sponsors, assets from failed plans, investment earnings on assets and recoveries in bankruptcy. Gotbaum urged passage of an administration proposal to allow PBGC's board of directors to set the agency's insurance premiums based on the risk presented by the insured. The proposal allows premiums to be set as they are in other government insurance programs and in private insurance companies.
Gotbaum also detailed the agency's financial challenges, and outlined an administration proposal to redress them by reforming how PBGC sets premiums.
“Thanks to better health, better technology and better lifestyles, today we're living longer, healthier lives,” Gotbaum said during a hearing before the Health, Employment, Labor and Pensions Subcommittee of the House Committee on Education and the Workforce. “That’s great news, but it also means that retirement costs more.”
Gotbaum continued, “Today, most people don't think they have enough money to retire - and they're right. The Administration is committed to do what we can do to strengthen retirement security, which is an important priority not only for workers and retirees but also for our economy and our nation."
Gotbaum noted there are many government efforts to enhance retirement security, including efforts to preserve existing plans by reducing regulatory burdens; helping establish additional options, such as hybrid DB/DC approaches; and continuing to help people understand their plans and choices.
Turning to PBGC's finances, Gotbaum acknowledged the $26 billion gap between what the PBGC owes and its assets (see Some Positives Exist Amid PBGC's Dire Financial Picture). Premiums are too low for the insurance PBGC provides, he said. The agency is funded entirely through insurance premiums paid by plan sponsors, assets from failed plans, investment earnings on assets and recoveries in bankruptcy. Gotbaum urged passage of an administration proposal to allow PBGC's board of directors to set the agency's insurance premiums based on the risk presented by the insured. The proposal allows premiums to be set as they are in other government insurance programs and in private insurance companies.
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