U.S. Agency to Retire List of Underfunded Pensions

The government’s pension insurance agency said Wednesday it is dropping its controversial listing of companies with the biggest underfunded retirement plans, saying recent legislation makes it unnecessary.

“With full implementation of the Retirement Protection Act reforms, we now have better enforcement tools in place,” said David Strauss, executive director of the Pension Benefit Guaranty Corp.

“Especially important is the requirement that companies with severely underfunded pension plans annually report the under-funding to workers and retirees,” he added.

The 1994 law requires all companies with pension plans funded at less than 90% to report the funding level to workers and retirees each year.

Many companies had complained the annual list of pension plans with the 50 biggest funding shortfalls was unfair. It was published for eight years through 1996. They contended it included financially healthy sponsors with sufficient assets to meet their pensions obligations.

Indeed, the PBGC emphasized in its yearly listing that inclusion did not mean a plan posed an immediate risk.

The PBGC announcement also noted that recent laws give the agency more muscle to enforce pension requirements.

“It is clear that the combination of legislative reforms and PBGC’s active enforcement effort are having an impact on pension funding and should result in gradual and continued improvement in funding levels over the next 10 to 15 years,” Strauss said.

The PBGC said nearly 90% of workers and retirees are covered by well-funded plans.