Pension insurer runs record $34 billion deficit
|By MARCY GORDON; MARCY GORDON The Associated Press|
Pension obligations grew by $12 billion to $119 billion last year. Assets used to cover those obligations rose by just
The agency has now run deficits for 10 straight years. The gap has grown wider in recent years because the weak economy has triggered more corporate bankruptcies and failed pension plans.
If the trend continues, the agency could struggle to pay benefits without an infusion of taxpayer funds.
"There's no imminent threat that we're going to stop cutting checks," Gotbaum said during a conference call with reporters. However, he said,
The Obama administration has proposed raising the premiums and tailoring them to the size of companies and their level of financial risk. Under the plan, bigger companies and those at greater risk of failing would pay larger premiums. The fees haven't been raised in six years.
"The public should not be led to believe the PBGC is in danger of a bailout, and
The PBGC was created in 1974 as a government insurance program for traditional employer-paid pension plans. If an employer can no longer support its pension plan, the agency takes over the assets and liabilities, and pays promised benefits to retirees up to certain limits.
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