Pensions


  The Pension Benefit Guaranty Corp. (PBGC) had an overall deficit of $22 billion for the fiscal year ending Sept. 30, 2009, according to the agency’s Annual Management Report, nearly double the $11.2 billion deficit it had at the end of fiscal year 2008. The deficit was, however, sharply lower than the record $33.5 billion deficit cited in an unaudited report to Congress as of March 31, 2009, the midpoint of the fiscal year.

 

The report says the agency’s potential exposure to future pension losses from financially weak companies increased to about $168 billion from the $47 billion booked in fiscal year 2008. The report classifies 27 large pension plans with total underfunding of $1.64 billion as probable losses on the PBGC balance sheet.

 

The deficit for single-employer pension plans widened to $21.1 billion for the year, up from the prior year’s $10.7 billion shortfall. The deficit in the separate insurance program for multiemployer pensions rose to $869 million, a $396 million increase over the prior year.

 

At the end of fiscal year 2009, the single-employer program had assets of $68.7 billion and liabilities of $89.8 billion. During the year, the single-employer program took in 144 newly terminated pension plans. Overall benefit payments in 2009 totaled $4.5 billion, up from $4.3 billion a year ago. The insurance program for multiemployer plans has about $1.5 billion in assets to cover about $2.3 billion in liabilities.

 

The Annual Management Report: Fiscal Year 2009 is available at pbgc.gov/docs/2009amr.pdf.

 

  The PBGC reached an agreement with the U.K.’s The Pensions Regulator and the Pension Protection Fund that provides a framework for information sharing that will help the agencies protect retirement benefits earned by workers and retirees on both sides of the Atlantic.

 

“In today’s global business world, pension regulators often face common issues that cut across national boundaries,” PBGC Acting Director Vince Snowbarger said in a press release. “This agreement gives the PBGC and our U.K. counterparts a framework for appropriate sharing of information and cooperation in carrying out our missions.”

 

Under the memorandum of understanding, the three agencies will share any unrestricted information that advances the security of defined benefit plans sponsored by private-sector companies. Confidential financial information from those companies will not be shared.

 

The agreement facilitates broad access to data, intelligence and other records, but it is not legally binding. The agencies are not compelled to lend assistance to each other, especially if legal proceedings are under way, and such assistance would be contrary to the interests of either country. The agreement can be canceled at any time by any party.

 

The PBGC is the primary overseer of U.S. pension plans. It currently guarantees payment of basic pension benefits for 44 million American workers and retirees participating in more than 29,000 private defined benefit pension plans.

 

The Pensions Regulator oversees private- sector defined benefit plans in the U.K. and is charged with protecting the retirement benefits of plan members. The Pensions Regulator is also charged with reducing the risk of claims for compensation from the Pension Protection Fund (PPF).

 

The MoU is available at pbgc.gov/about/memorandum.html.

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