I-Team: Federal agency insuring private-sector pensions could get swamped by underfunded plans
GAO is recommending reforms
10:55 PM, May 3, 2013
TAMPA - Believe or not, some workers in the private sector can still look forward to a pension in retirement.
Unlike government pensions, though, there are no guarantees. If a company with an underfunded pension plan goes bankrupt and the plan is terminated, a federal agency called the Pension Benefit Guaranty Corporation steps in.
Yet the PBGC's premiums haven't kept up with the risks of plan terminations. In fiscal year 2011, the PBGC estimated it was exposed to potential terminations of $227 billion, an increase from $170 billion a year earlier.
At the end of fiscal year 2011, the PBGC was responsible for insuring the benefits of nearly 44 million workers, retirees, and beneficiaries participating in about 27,000 defined-benefit plans. But the agency faced an accumulated deficit of $26 billion. Most of the deficit --- $23 billion --- reflects the difference between the value of future benefits owed to participants of terminated plans insured under the program and the funds available to pay those benefits.
The U.S. Government Accountability Office is recommending Congress revise the PBGC's premium structure. Companies that consistently under-fund their pension plans would pay higher premiums into the PBGC's insurance fund than those doing a better job of keeping up with their worker obligations.
Tonight at 11, the I-Team reveals who has the best and the worst 401(k) plans in the Tampa Bay area.