Famous last words?
James B. Lockhart III, executive director of the Pension Benefit Guaranty Corp. during George H.W. Bush's administration in the late 1980s, spoke with Steven A. Kandarian before he took the same job in 2001. "It's not going to be as exciting as it was when I was there," Mr. Lockhart, now deputy commissioner of the Social Security Administration, recalls telling Mr. Kandarian. "I guess I wasn't a good predictor," he says now.
The pension insurance agency was in the red when Mr. Lockhart ran it, but not as bad as it is now. For the fiscal year ended Sept. 30, 1989, the PBGC had total assets of $3.2 billion and liabilities of $4.2 billion. The PBGC had a net deficit of $23.3 billion as of Sept. 30, 2004.
With the demise of the airline industry's pension funds, and the automotive industry also in trouble, the government may have to step in some day to bail out the PBGC, Mr. Lockhart said.