U.S. Pension Agency in Financial Trouble

Article, CNN, October 6, 2004
http://money.cnn.com/2004/10/07/news/economy/pension.reut/index.htm

One of the U.S. funds that insure the long-term solvency of traditional pensions is currently "at risk," said a spokesperson for the Pension Benefit Guarantee Corporation.

The end-of-fiscal year report on the fund is expected to show an even bigger deficit than the $11.3 deficit of 2003. These large deficits threaten the overall solvency of the fund, which ultimately insures that thousands of retired workers will get there retirement pensions.

The fund slipped into a deficit in 2002 after having to bail out failed pension plans in the steel industry. The environment hasn't gotten much better since then, because many struggling airlines have put additional pressure on the Fund. United Airlines, for example, recently disclosed that it might have to terminate its pension plan in order to save money.

Experts say that the airlines are not the only ones to blame. The real problem is more endemic. Companies are simply failing to keep their pension programs properly funded.