Greg Ossi Comments on PBGC Annual Report With Law360

In “3 Takeaways From The PBGC's Latest Fiscal Health Checkup,” Law360 turned to benefits and executive compensation partner Greg Ossi for his commentary on the Pension Benefit Guaranty Corporation’s annual report, which projects that the single employer insurance program could end up with a $63.6 billion surplus after 10 years.

“They’re projecting a huge surplus,” said Ossi. Single-employer defined benefit plans “are basically on their way to extinction,” with cost pressures including the insurance premiums at issue pushing employers to shift retirement benefits away from pension benefits to the defined contribution model, he added.

Ossi explained, “The continued increase of premiums is another incentive for employers to say, ‘let me freeze this defined benefit plan and move to a defined contribution plan, because it’s becoming too expensive for me to continue to fund the plan.’”

“Notwithstanding the fact that interest rates are really helpful right now, because they’re higher, which means you’re going to have, typically, lower minimum funding requirements with higher interest rates,” Ossi noted.