Fed Pension insurance program's deficit swells

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WASHINGTON - Deficits at the government's pension insurance program surged to a record $11.2 billion in 2003 - three times larger than any previous shortfall, with the outgoing director warning Thursday that taxpayers could be called on for a bailout.
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The agency's single-employer program posted a net loss of $7.6 billion for its 2003 financial year ending Sept. 30, added to a $3.6 billion shortfall in 2002.
Falling interest rates and a record number of pension plan bankruptcies - mostly in the steel industry - sent the program deeper in the red.
PBGC still can continue to pay retirement benefits to workers and retirees enrolled in bankrupt plans, but the growing financial troubles threaten "the agency's ability to continue to protect pensions in the future," said Kandarian, who announced last week his plans to leave after more than two years at the helm.
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The PBGC has said a Senate Finance Committee plan to waive contributions to severely underfunded plans for three years would cause shortfalls in those plans to grow by $40 billion.

http://www.washingtonpost.com/wp-dyn/articles/A21601-2004Jan15.html

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