Glueball,
I'm not sure the PBGC receives any funds from general taxation at all. At least thats what it says on their WWW site.
It seems a little tautological to me though and I don't claim to understand how the whole edifice works. It seems like it funds failed DB schemes with the the funds of failed DB schemes! Whoever thought that one up should be congratulated on their wisdom.
Even the executive director of the PBGC writes:
You may have read about challenges facing the PBGC. As of the end of 2004, the agency has a shortfall of more than $23 billion. Rest assured, however, that it poses no near-term threat to PBGC's ability to pay current benefits, nor will it affect our commitment to quality customer service. Having said that, it is becoming ever clearer that changes in the system must be made to strengthen the defined benefit system for employees, create incentives for plan sponsorship and ensure that PBGC is able to fulfill its mission in the future. PBGC is actively engaged with Congress and the Administration to improve the retirement security of American workers.
I'm sorry but this malaise isn't confined to the US - it is prevalent in the UK too, but it appears at least Holland have it right.
Cityfan,
The composition of the Creditors Committee is obvious, but in the absence of an ESOP, which presumably means that employees do not get representation on such committees, it seems to me that employee benefits are always going to get hit first in bankruptcy proceedings. Is my understanding essentially correct?
Hence my comment earlier in the thread about how Creditors aren't about to give up the "protections" they are afforded in Ch 11.
For the conspiratorial amongst us, it does not take a genius to figure out the advantages that a degree of collusion between City and airline merit.
And therein lies the rub.
As an employee you make the wheels go round on a day-to-day basis, but the real game is being played on a higher stage.