House - Committee on Ways and Means - Subcommittee on Oversight
Gerald D. Kleczka (D-WI) - More recent, many of us are receiving letters and calls from Sears’ former employees because Sears is planning on reducing dramatically the life insurance benefit that they had promised to their employees. Now, it’s not a responsibility of yours; but nevertheless, is there any problem with the funding or the balances in the Sears retirement program, so these retirees might receive another notice from you or from Sears that there’s now a problem with the retirement benefit?
PBGC - Pension Benefit Guaranty Corporation, David M. Strauss, Executive Director - I’ll be happy to check that for you and get back to you on that.
Gerald D. Kleczka (D-WI) - OK, I’d appreciate that because we are receiving letters from constituents.
[The following was subsequently received:] - Funding Level of the Sears Retirement Plan
(p43-44) - ACLI - Ron E. Merolli - However, while we favor SAFE, we are concerned with that 5 percent guarantee.
We feel there should be a reasonable range of 3 to 5 percent. If the basis for the guarantee is 5 percent, insurers will need to make long-term investments that have yields higher than 5 percent in today’s very low interest rate environment.
If interest rates drop further, 5 percent causes financial difficulties. The trend is down and 5 percent could put insurers at long-term risk.
We are conservative investors—investing mainly in high-quality bonds and mortgages. The interest earned on the investments is competitive. Therefore, to guarantee an interest rate for the long term of 5 percent—when long-term rates are currently hovering at less than 6 percent and where they could decrease to less than 5 percent, raises serious concerns.
If rates are declining, this may tempt insurers to take more credit risks.
1998 1001 (Part 1) - GOV (House) - Risks of Hedge Fund Operations - Hedge Fund Operations Risks - Long Term Capital Management (LTCM) - Jim Leach (R-IA)
FRB-NY - William J. McDonough - President, Federal Reserve Bank of New York
House - Banking Committee
... testimony on hedge funds and their effect on the global economy. Federal monetary officials, investors and professors testified.
1998 1001 (Part 2) - GOV (House) - Risks of Hedge Fund Operations - Hedge Fund Operations Risks - Long Term Capital Management (LTCM) - Jim Leach (R-IA)