The Pension Benefit Guaranty Corp.'s good news, just six months ago, that its single-employer program enjoyed a healthy surplus could become another casualty of the current economic crisis.
As sponsors of some of the largest pension plans now wrestle with plummeting revenues and market values, the prospect of the PBGC having to step in if they wind up in bankruptcy suddenly seems less far-fetched.
While the picture is rapidly changing, a look at large sponsors already harmed by the COVID-19 outbreak shows some big potential hits for the PBGC as an insurer. According to 10-K information filed with the Securities and Exchange Commission, as of Dec. 31, General Electric Co. had $19.1 billion in unfunded pension liabilities and The Boeing Co. had $15.9 billion, followed by Exxon Mobil Corp. with $7.3 billion, and General Motors, Delta Air Lines Inc. and American Airlines Group Inc., each with just less than $5.5 billion in unfunded liabilities.
In November, the PBGC annual report showed single-employer program assets of $128.1 billion and liabilities of $119.4 billion as of Sept. 30, thanks to record premiums, investment income and modest losses from plan terminations.
PBGC officials declined to comment on potential impacts of the COVID-19 crisis at this time, but observers note that agency officials keep a close handle on potential problems at companies.