Red ink rising at pension guarantee agency

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WASHINGTON, May 20 (UPI) -- The U.S. agency that guarantees pensions for 44 million people has seen its deficit triple to a record $33.5 billion, officials said Wednesday.

It took just since last October for the situation to develop at the Pension Benefit Guaranty Corp. as more U.S. corporations go into bankruptcy under the weight of the recession, The New York Times reported.

The agency is not in any immediate crisis, since it has assets of $56 billion and its obligations are spread out over the coming decades. It is paying about $4.3 billion a year to about 640,000 beneficiaries.

However, lower interest rates, an atrophying investment portfolio and more companies entering the system mean there will eventually be a day of reckoning, its top official said.

"The PBGC has sufficient funds to meet its benefit obligations for many years because benefits are paid monthly over the lifetimes of beneficiaries, not as lump sums," Acting Director Vince Snowbarger said in a statement. "Nevertheless, over the long term, the deficit must be addressed."

That could mean a federal bailout, higher charges to employers or a healthy increase in its investment returns, the Times said.