Recent Defined Benefit Pension Reform: Reasons and Results

Abstract

In the face of corporate bankruptcies, the Pension Benefit Guaranty Corporation (“PBGC”) assures workers that their defined benefit pensions will be protected. It is this fact which has motivated recent reform of the PBGC and the overarching defined benefit plan system by Congress. This paper explores those reforms by addressing the reasons for and results of the most recent reform which had as its primary aim restoring the fiscal solvency of the PBGC. The paper challenges popular accounts of the reform process while examining the results of such reform for important stakeholders without resorting to an overly technical discussion of each provision of the reform. The paper argues that while special interests were successful in obtaining changes in the bill throughout the course of its legislative journey, focusing on such small changes obscures important structural changes to the defined benefit pension system