The government agency that insures the private pensions of 44.4 million workers said Monday that its deficit more than doubled in 2004 to a record $23.3 billion, prompting both Republicans and Democrats in Congress to renew calls for action to shore up the system.
The Pension Benefit Guaranty Corp. said that as of Sept. 30, it had $39 billion in assets to cover $62.3 billion in pension liabilities.
The $23.3-billion deficit was more than twice the $11.2-billion long-term shortfall the agency reported a year ago.
The PBGC was created in 1974 as a government insurance program for traditional defined-benefit pension plans. Employers pay insurance premiums to the agency, and if an employer can no longer support its pension plan, the agency takes over the assets and liabilities and pays promised benefits up to certain limits.
The trouble in recent years has been an explosion in the number of ailing companies dumping their pension liabilities onto the PBGC.
The problem has been particularly acute in industries such as steel and airlines, where older companies are facing stiff competitive pressures from newer rivals that offer less generous pension plans.
Also, many companies are replacing defined-benefit plans, which guarantee a set monthly retirement benefit, with defined-contribution plans, in which employers make contributions toward a retirement fund and workers receive only the amount those investments have earned. The PBGC backs only defined-benefit pension plans.
PBGC Executive Director Bradley D. Belt said that although his agency had enough funds to meet its obligations for a number of years, it was crucial for Congress to address the agency’s financing needs “so that the problem doesn’t spiral out of control.”
Rep. John A. Boehner (R-Ohio), chairman of the House Education and Workforce Committee, said he wanted to move pension reform legislation through his committee next year.