Washington (July 25, 2003) – The federal agency that insures private-sector pensions is in serious financial danger, the General Accounting Office warned this week.
The GAO said it was particulaly worried about single-employer plans covering 34 million of the 44 million workers and retirees the Pension Benefit Guaranty Corp. insures.
Employers pay insurance to the agency each year to guarantee future pension payments to retirees if the company goes bankrupt. As late as 2000, the PBGC had a 9.7 billion surplus, but after high-profile bankruptcies in the past few years at Bethlehem Steel, National Steel, TWA and U.S. Airways, the agency registered a $3.6 billion deficit last year that is already growing.
The agency said the danger does not extend to 10 million workers in union-sponsored pension plans involving multiple employers, although the PBCG does also insure their benefits.
-- WebCPA staff
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