NU Online News Service, July 23, 2003, 5:35 p.m. EDT – The Pension Benefit Guaranty Corp. needs urgent attention from Congress because it already has a deficit of $5.4 billion and it is responsible for backing weak defined-benefit pension plans that have promised more than $35 billion in unfunded benefits, according to officials at the U.S. General Accounting Office.
The GAO says it is adding the PBGC to its list of “high risk” government agencies and programs.
The PBGC insures the pension benefits of 34 million workers and retirees who participate in 30,000 private defined-benefit pension plans.
The PBGC keeps up pension payments when employers go out of business and “terminate” their pension plans.
The PBGC had a $9.7 billion surplus in 2000, thanks to the booming stock market. Since then, many employers have shut their doors and terminated their plans, and weak stock prices and bond rates have hit plan assets hard.