The PBGC's financial problems have resulted largely from pension plan terminations in the last five years, according to the latest data from the federal pension insurance agency. From 2000 through 2004, the PBGC piled up $14.3 billion in claims from terminated pension plans, or 70% of the $20.6 billion in total claims since the agency's creation in 1974.
And the terminations of pension plans in the five years have continued to exacerbate the decline in defined benefit pension plans, with only 29,600 insured by the PBGC now, down from 112,000 plans at the peak in 1985.
"While most companies should be able to honor their promises to workers and retirees, far too many are reneging on those promises and shifting costs to the pension insurance program," PBGC Executive Director Bradley Belt said in a statement. "Congress needs to act on the administration's proposal to strengthen the defined benefit system and put the pension insurance program on a sound financial footing."