U.S. Pension Insurer May Need Aid as Deficit Soars
Shortfall Fed by Flood of Corporate Bankruptcies
By David S. Hilzenrath
Washington Post Staff Writer
Thursday, May 21, 2009
The federal agency that guarantees corporate pensions was $33.5 billion in the red at the end of March, triple its deficit six months earlier, the agency’s head told a Senate committee yesterday.
The recession threatens to add to the strain on the Pension Benefit Guaranty Corp. by pushing more companies into bankruptcy and leaving the struggling agency responsible for their pensions. For example, the agency faces a potential tidal wave of claims from Chrysler and General Motors, whose pension plans are underfunded by an estimated $29 billion, the Government Accountability Office said.
If the PBGC’s condition continues to deteriorate, the government could come under pressure to shore it up with taxpayer funds, the GAO said in testimony to the Senate’s Special Committee on Aging.
. . . The PBGC is overseen by a three-member board, but the members have not met face-to-face since February 2008, according to the GAO. The board includes the secretaries of the Commerce, Labor and Treasury departments, who have many other demands on their time.
So, as yet another leg slides out from under worker protections, the oversight board has not met for fifteen months, because these dudes have other demands on their time.
Corporate pension plans declined from some 112,000 funds in the mid 1980s to about a quarter of that (31,000) today. But the next shoe to drop in the economic disaster we are witnessing, is that as of 2003, pension funds were underfunded by $400 billion dollars. That was during the boom years. No one really knows where that number is today, as the economy self destructs, partly because the overseers are too damned busy elsewhere to peek under the rug.
The pension funds of ordinary hard-working Americans out there are being essentially flushed back into the same taxpayer funded toilet as bailouts for the rich and famous.
Now there’s a hot new TV program concept for the networks that claim to be struggling–Bailouts For the Rich and Famous. I’ll bet that would be a hit.