How bad is the problem of corporations underfunding their pension trust funds for employees?
More than 18,000 companies have underfunded their pensions. According to Bradley Belt, out-going director of the PBGC, if every company in America decided to terminate their plans and settle existing obligations, the deficit would total $450 billion. While this is an unlikely scenario, another measure of the problem is the financial health of the PBGC itself, which currently is running a $23 billion deficit. The bulk of that deficit has developed in the past five years as more and larger companies like United Airlines have unloaded their underfunded pension plans on the PBGC. The PBGC is financed by insurance premiums paid by corporations. Some fear that unless Congress acts to increase these premiums, the PBGC may eventually require a taxpayer bailout.
