Letter to the Editor ¦ July 26, 1993
PBGC's non-alarmist Slate

By David Langer

Defined benefit plan sponsors and professionals have reason to hope that the Pension Benefit Guaranty Corp. will become a positive force on behalf of defined benefit plans under its newly appointed executive director, Martin Slate (P&I, May 17, page 97).

In his recent congressional testimony, Mr. Slate was thoughtful and non-alarmist in tone -- a welcome change from the alienating style of his predecessor.

Mr. Slate acknowledged, for example, that the PBGC has "enough cash flow and assets to meet its obligations for many years" and is not faced with an imminent savings-and-loan-type crisis; there is time to think about ways to protect its solvency, as an interagency task force, set up by Secretary of Labor Robert Reich, is now doing.

Mr. Slate will serve the public well by maintaining a constructive approach. Plan sponsors need assurances that defined benefit plans can not only work well, but are a highly effective tool for corporate retirement planning. In that vein, perhaps he will now halt PBGC's major effort to publicize the 50 largest unfunded plans, a campaign that suggests that conditions are much worse than they really are. Mr. Slate's many years of working in pensions at the Internal Revenue Service may also enable him to launch a major joint agency effort to focus on the reduction of complexity and the easing of the contribution restrictions.

If employers come to see our federal officials truly showing care and concern, the decimation of the private defined benefit plan system may yet be turned around.

- David Langer, a consulting actuary and president of David Langer Co., Inc.
New York

Copyright 1993 Crain Communications, Inc., Pensions & Investments, July 26,1993
Reproduced with permission.