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1 1 (April 24, 2006)

handle is hein.crs/crsajce0001 and id is 1 raw text is: Order Code RS22315 Updated April 24, 2006 CRS Report for Congress Received through the CRS Web Budget Reconciliation and the PBGC Neela K. Ranade Chief Actuary Domestic Social Policy Division Summary The Pension Benefit Guaranty Corporation (PBGC) posted a deficit of $23.1 billion as of the latest reporting date of September 30, 2005, and its exposure to new probable terminations remains high in 2006. Higher PBGC premiums would help reduce the PBGC deficit. PBGC premiums are also an important source of revenue for meeting the budget reconciliation targets. The House and the Senate passed budget reconciliation bills H.R. 4241 and S. 1932 in the first session of the 109th Congress. These included differing provisions for increasing PBGC premiums. Conference agreement was reached on the two bills, and the Deficit Reduction Act of 2005 (P.L. 109-171) was signed by President Bush on February 8, 2006. The pension provisions of P.L. 109-171 are estimated to save $417 million in 2006 and $3.56 billion over 2006 - 2010. Two broad pension bills were introduced in 2005 to reform funding rules for the defined benefit pension system and to raise PBGC premiums. The House and the Senate passed H.R. 2830 and S. 1783, respectively, but conference agreement has not yet been reached on these bills. Role of the PBGC in the Budget Reconciliation Process The Pension Benefit Guaranty Corporation (PBGC), the federal corporation that insures the pension benefits of participants in most private sector-defined benefit pension plans, posted deficits of $22.8 billion and $335 million for its single-employer and multiemployer programs, respectively, as of the latest reporting date of September 30, 2005. The large PBGC deficit has raised the specter of a possible taxpayer bailout and heightened awareness of the need for higher PBGC premiums.' In April 2005, the House and Senate adopted a joint budget resolution that provided the House Education and Workforce Committee and the Senate Committee on Health, 1 For additional information, see CRS Report RL32702, Can the Pension Benefit Guaranty Corporation Be Restored to Financial Health?, by Neela K. Ranade; and CRS Report RL3299 1, Defined Benefit Pension Reform for Single-Employer Plans, by Neela K. Ranade and Paul J. Graney. Congressional Research Service 4- The Library of Congress

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