|
Have
you ever asked someone a yes-or-no question and received a
confusing, long-winded, and inept answer? Such a response
is a bit unexpected; nonetheless it has happened to all of
us. However, when dealing with a federal bureaucracy, ineptness
should have been my expectation – and yet it wasn’t. After
all, Ludwig von Mises stated in his masterful book Bureaucracy:
"The plain citizen compares the operation of the bureaus
with the working of the profit system, which is more familiar
to him. Then he discovers that bureaucratic management is
wasteful, inefficient, slow, and rolled up in red tape."
Oh boy, did I make this discovery in spades. So here is a
brief tale of my maddening yet comical experience with a federal
bureaucracy – the Pension Benefit Guaranty Corporation (PBGC)
– which, by the way, is likely heading for a taxpayer funded
bailout. There may be a lesson or two in here.
So what
was the question posed, via the prescribed e-mail link, to
the PBGC? First of all, I provided pertinent information such
as my name, home address, and case number. Then I followed
with this question: "Do I qualify for a lump-sum payout?"
If the answer is "yes" then please provide details.
If the answer is "no," then please explain why not.
My expectation, naïvely, was to have an answer within a few
days – not four months! More about this later.
Some
Background Information
On June
11, 2001, Reliance Group Holdings declared Chapter 11 Bankruptcy.
It was a poorly run holding company and was deservedly liquidated
– the marketplace had spoken. Having worked at Reliance Surety
Company for nine years (1984–1993), I was keenly interested
as to whether or not the Pension Benefit Guaranty Corporation
would take over Reliance’s employee retirement plan. Due to
my years of service, I had become vested in this retirement
plan and would receive a few hundred dollars per month in
retirement income. Effective February 28, 2002, the PBGC assumed
Reliance’s pension liabilities; and I surmised that my small,
yet noteworthy, monthly income would be secure. Never fear,
as I was now one of those workers whose benefits were "protected"
by an act of Congress – as described in the PBGC’s own words:
The
Pension Benefit Guaranty Corporation (PBGC) is mandated
under Title IV of the Employment Retirement Income Security
Act of 1974 (ERISA) to insure, under statutory limits, participants
in covered defined benefit pension plans in the United States.
As of September 30, 2005, the PBGC covered 44.1 million
workers in over 30,000 active plans and was directly responsible
for the future benefits of 1.3 million active and retired
workers whose plans had failed. The PBGC receives no
taxpayer monies and its obligations are not backed by the
full faith and credit of the United States Government.
(Emphasis added)
But not
so fast. According to the PBGC’s 2004 Annual Report,
this safety-net agency had a deficit net worth of $23 billion.
Even Forbes Magazine is asking Who
Will Bail Out The Bailer? Considering the financial
woes at General Motors, Ford, and the major airlines, it is
certain that the PBGC’s deficit position will only grow worse
over time. By the PBGC’s own calculations, the retirement
plans "insured" by it were under-funded by $450
billion. In my opinion, the PBGC will either be allowed to
fail in its mission or it will be bailed out by America’s
taxpayers. So much for the idea that my Reliance pension was
made "secure" by Uncle Sam.
Back
to the Maddening yet Comical Experience
In August
of 2005, a friend who had also worked at Reliance Surety Company
informed me that he received a lump-sum payout from the PBGC.
Having researched the PBGC’s financial condition – which,
as mentioned above, is terrible – and knowing that the Federal
Reserve will continue to debase the dollar, I decided to contact
the PBGC to find out if I qualified for a lump-sum payout
as well. What follows is a summarized version of the exasperating
exchange between the PBGC and me:
|
|
Good
grief! It took four months to get a simple yes-or-no answer.
To make this experience all the more surreal, the PBGC has
the audacity to state the following in its 2004 Annual
Report: "Nothing is more important to PBGC than providing
the highest quality service to its customers. The Corporation
has an intense focus on meeting the needs and expectations
of its customers while carrying out its statutory missions."
Most certainly, without the profit-and-loss test of the free
market, the PBGC and all public bureaucracies will fail miserably
in "customer" service let alone financial management.
Could you imagine if Amazon.com took four months to send you
a readily available book? It would already be out of business.
And to
think I just had a conversation, at the gym, with a gentleman
who advocates socialized medicine. Perhaps a run-in with the
IRS, PBGC, or any other public bureaucracy would change his
mind? I doubt it, as socialists believe any bureaucracy can
operate swimmingly with the "right man" in charge.
To be sure, this is pure fantasy. Hence, here is another dose
of wisdom from Ludwig von Mises’ book Bureaucracy:
The
champions of socialism call themselves progressives, but
they recommend a system which is characterized by rigid
observance of routine and by a resistance to every kind
of improvement. They call themselves liberals, but they
are intent upon abolishing liberty. They call themselves
democrats, but they yearn for dictatorship. They call themselves
revolutionaries, but they want to make the government omnipotent.
They promise the blessings of the Garden of Eden, but they
plan to transform the world into a gigantic post office.
Every man but one a subordinate clerk in a bureau. What
an alluring utopia! What a noble cause to fight!
Against
all this frenzy of agitation there is but one weapon available:
reason. Just common sense is needed to prevent man from
falling prey to illusory fantasies and empty catchwords.
Reason
and common sense are nowhere to be found at the PBGC. My mistake
was to have any such expectations in the first place.
 Ultimately,
I would like to see the PBGC and each if its bureaucratic
brethren dry up and blow away. It is my responsibility to
save for my own retirement. Thus, a more serious mistake would
be to plan on receiving retirement income via Uncle Sam’s
nutty wealth redistribution schemes – as administered by bungling
bureaucracies such as the PBGC and the Social Security Administration.
With the federal government’s unfunded liabilities amounting
to $50 trillion (and growing), reason and common sense tell
me that I had better take care of myself both physically and
financially. To depend on the kindness of bureaucratic strangers
would be utterly foolish.
January
3, 2006
Eric
Englund [send him
mail], who
has an MBA from Boise State University, lives in the state
of Oregon. He is the publisher of The
Hyperinflation Survival Guide by Dr. Gerald Swanson.
You are invited to visit his website.
Copyright
© 2006 Eric Englund
Eric
Englund Archives
|
