U.S. pension agency sees its deficit double to $23.3 billion in 2004
Monday, November 15th 2004, 10:53 am
By: News On 6
WASHINGTON (AP) _ The deficit in the government program that insures private pensions more than doubled in 2004 to $23.3 billion, the Pension Benefit Guaranty Corp. announced Monday.
The PBGC said that as of Sept. 30, it had $39 billion in assets on hand to cover $62.3 billion in pension liabilities, leaving it with a deficit of $23.3 billion.
While that figure was more than double the $11.2 billion shortfall at the end of the 2003 budget year, agency officials said the amount of assets on hand would allow it to continue meeting its obligations for a number of years.
However, PBGC executive director Bradley D. Belt warned that Congress should not delay in addressing financing needs at the agency.
``With more than $62 billion in liabilities, it is imperative that Congress act expeditiously so that the problem doesn't spiral out of control,'' Belt said.
He said the administration had put forward a set of pension reform proposals last year and the deepening debt problem highlighted ``the need for comprehensive reforms that ensure pension plans are better funded.''
The PBGC was created by the Employee Retirement Income Security Act of 1974 as an insurance agency for traditional ``defined benefit'' pension plans. In such plans, employers offer employees a pension based on a formula that normally takes into account the workers' years of service and salary earned during those years.
Employers pay insurance premiums to the agency and in the event that an employer can no longer support its pension plan, the agency takes over the plan's assets and liabilities and pays promised benefits up to certain limits.