The Pension Benefit Guaranty Corp. has overstated its deficit in ways that could cause problems for defined benefit plan sponsors and participants, according to the American Benefits Council.[@@]
The American Benefits Council, Washington, an employer group, has published an analysis questioning PBGC officials’ estimate that the agency faces a deficit of more than $23 billion.
The authors of the council analysis contend that the PBGC deficit estimate is based on unreasonably low interest rate assumptions.
“Using slightly more reasonable assumptions, this deficit could be reduced to $14.3 billion, and, under one scenario, could be as low as $4.6 billion,” the authors write.
Members of Congress are paying more attention to the PBGC these days because of efforts by several large airlines to shut down high-cost pension plans.
“The prospect of further high-profile terminations of under funded pension plans makes it more important than ever to understand the true dimensions of the PBGC’s deficit,” says American Benefits Council President James Klein.