PENSION BENEFIT GUARANTY CORP. Agency has own deficits

Many liabilities have come from industries such as the airlines and steel.
WASHINGTON (AP) -- The federal agency that insures the private pensions of 44 million workers is having big problems of its own, hitting a deficit of $22.8 billion as big airlines in bankruptcy dump liabilities.
With billions flying out the door of the Pension Benefit Guaranty Corp., concern has been mounting over its financial footing. The agency disclosed Tuesday in an annual report that as of Sept. 30 it had $56.5 billion in assets to cover $79.2 billion in pension liabilities.
Without a legislative overhaul of the private pension system, the PBGC will run out of money to pay the pension claims of the retirees of companies whose plans it has assumed, the head of the agency warned. That would raise the possibility of a taxpayer bailout.
Traditional employer-paid pension plans, giving retirees a fixed monthly amount based on salary and years of employment, are now estimated to be underfunded by some $450 billion. That could jeopardize the retirement security of millions of Americans, lawmakers say.
There has been an explosion in recent years in the number of big, ailing companies -- especially in such industries as airlines and steel -- shifting their pension liabilities to the PBGC.
The PBGC's $22.8 billion deficit for fiscal 2005 takes into account both the pension liabilities the agency has assumed and those it expects to take over in the future. If events such as corporate bankruptcies that occurred after the Sept. 30 end of the fiscal year had been counted, the 2005 deficit would have been $25.7 billion, the agency said.
There is speculation that auto parts maker Delphi Corp., which filed for protection from creditors last month, could end its pension plan and transfer liability to the federal agency.