PBGC deficit triples in just 7 months

As corporate bankruptcies climb, more and more of the pension burden is falling onto the shoulders of taxpayers.

The deficit at the federal agency that guarantees pensions for 44 million Americans more than doubled in the last six months to a record high, reaching $33.5 billion, largely as a result of the surging number of bankruptcies among companies whose pensions it must now take over.

The Pension Benefit Guaranty Corporation, as of October, had faced a shortfall of $11 billion. But the combined effect of lower interest rates, losses on its investment portfolio and the increase in the number of companies filing for bankruptcy protection resulted in a deepening of its estimated deficit, officials said Wednesday.
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The agency, created by Congress in 1974, is now paying benefits of about $4.3 billion a year to about 640,000 people. Employers nationwide with so-called defined-benefit pension programs pay insurance premiums to the agency in return for a promise that it will take over their pension plan if a company fails.
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With the bankruptcy of Chrysler and a possible similar move by General Motors, the agency is facing a record surge in demand. The new deficit estimate takes into account both pensions it has taken over in the last six months, and others it believes it will have to assume control of soon.

The bankruptcies of Chrysler and GM will easily swamp the PBGC. It does not have the resources to deal with it.
This is looking like the latest taxpayer bailout in the works.

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UGH!

What happened to that whole "lockbox" idea and where the hell is Congress in ensuring pensions are there, guaranteed, period?

This is like the hidden theft from hell, with most of the upcoming retirees with nothing. Nada, nunca, nothing. Between layoffs, having careers cut short, personal financial problems, bankruptcy....

a 401k with anything left is a joke...and now this with traditional pension plans.

We need a good overview post on the history of retirement under attack. I know this started in the 1980's to the point now we have all of America aging with jack shit for retirement. We have the jack shit plan now.

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According to the Center of Retirement Research

45% of households are "at risk" for not being able to maintain their current standard of living in retirement when you factor in health care cost the percentage of "at risk" jumps to 61%.

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You ain't seen nothin' yet.

You ain't seen nothin' yet. All but a very few will need to work well into...only vampires can use their grave as a home office.

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This just in...

The P.B.G.C.’s former director, Charles E. F. Millard, was subpoenaed to testify at the hearing Wednesday. But he cited his constitutional right to avoid self-incrimination and declined to answer any questions.

Mr. Millard, who resigned in January, has been accused by the agency’s inspector general of having inappropriate contact with companies including BlackRock, JPMorgan Chase and Goldman Sachs, all of which competed for and won contracts to help manage $2.5 billion of the agency’s funds. Those contracts will now most likely be canceled.

Which I have to ask .... What the hell just went down?

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