To protect the financial future of retirees, this Note advocates that Congress pass legislation mandating a certain percentage of retirement plan funds be allocated into a low-risk individual retirement account ("IRA") insured by the Federal Depository Insurance Corporation ("FDIC"). This plan will shift the massive financial burden off of the PBGC. Section II of this Note provides an overview of pension plans and the PBGC with reference to economic and demographic factors that affect pensions. Thereafter, Section III discusses the current economic circumstances and their affect on retirement savings and the future of the PBGC." Section IV analyzes pending federal legislation that attempts to solve the problems of unfunded and underfunded pension plans. This section also outlines alternative solutions proposed by legal scholars and the various flaws in those plans. Finally, section V details this Note's proposed solution of a statutory mandate to invest a certain percentage of retirement funds into a low-risk IRA that is insured by the FDIC. In conjunction with this proposal, this Note addresses certain pension management factors such as diversification in plan assets and improving information disclosures to plan participants. By implementing this proposal, Congress, through legislation, can protect the future of the PBGC and the future of pensions.
Note, The Future of Americans' Pensions: Revamping Pension Plan Asset Allocation to Combat the Pension Benefit Guaranty Corporation's Deficit, 51 Clev. St. L. Rev. 153 (2004)