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Underfunded Pensions Double in U.S.; could exceed $80 billion
Reuters ^
| 09-04-03
Posted on 09/04/2003 8:40:26 AM PDT by Brian S
Thu September 4, 2003 11:15 AM ET
WASHINGTON (Reuters) - Underfunded pension liabilities at troubled U.S. companies doubled this fiscal year, and could exceed $80 billion with airlines accounting for nearly a third of the deficit, the government said on Thursday.
The Pension Benefit Guaranty Corp. also told Congress its deficit has grown to $5.7 billion as of July 31. The deficit for the entire fiscal year ending Sept. 30 last year was $3.6 billion. This gives the U.S. agency less money to bail out any troubled company retirement plans.
Airlines, including bankrupt United Airlines Corp. UALAQ.OB , have an underfunded liability of $26 billion, unchanged from April, the agency's executive director, Steven Kandarian, told a House of Representatives hearing.
Kandarian said the underfunded liabilities he cited represent companies that have serious financial problems, including poor investment ratings.
TOPICS: Business/Economy; Front Page News
KEYWORDS: pensionplans; pensions; underfundedpensions
1
posted on
09/04/2003 8:40:26 AM PDT
by
Brian S
To: Brian S
It's just the begining.
2
posted on
09/04/2003 8:45:08 AM PDT
by
VRW Conspirator
(2/3 of the Fed is about the transfer of wealth)
To: VRW Conspirator
there was some talk about changes to the law to allow more stock to back liabilities. Nothing like having stock at 100:1 P/E backing your golden years.
3
posted on
09/04/2003 9:18:42 AM PDT
by
steve50
(Power takes as ingratitude the writhing of it's victims : Tagore)
Comment #4 Removed by Moderator
To: golden1
buy goldor, don't retire. Retirement is not a Constitutional right plus it will make your wife happier to have you out of the house ;-)
5
posted on
09/04/2003 11:05:14 AM PDT
by
varon
To: VRW Conspirator
When I retired from Hughes Aircraft Company in 1989, the pension fund was OVERfunded by a billion dollars. Did the retirees get any of it? Nope.
6
posted on
09/04/2003 11:12:23 AM PDT
by
saminfl
To: Brian S
I had to laugh when I read a report about how things are improving as GM's pension has actually gained 7% of its value this year, compared to the 6% losses from the previous three years. What they don't tell you is that GM probably booked its growth at the maximum 8.5% growth for all three years.
So instead of being up 28% its really down 5%, or 35% difference. For GM's pension to reach the same amount after 10 years at that 8.5% billed rate GM will have to make 11.5% on its investment. That's not going to happen any time soon.
7
posted on
09/04/2003 8:32:55 PM PDT
by
lelio
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