WASHINGTON, Jan. 15 (UPI) -- The Pension Benefit Guaranty Corp., which manages underfunded corporate pension plans, said Thursday it had a record $11.2 billion deficit in 2003.
The agency said the termination of corporate pension plans in response to low interest rates lead to deficits triple that of any previous year.
PBGC insures the pensions of 34.5 million Americans in 29,500 plans and paid a record $2.5 billion in benefits last year, nearly $1 billion more than in 2002.
Calls for reform of the nation's pension system are reinforced by the numbers.
Steven Kandarian, PBGC's executive director, noted that the program was not yet in a deep financial crisis, but urged Congress to act soon.
He added that current law does not require employers to fully fund their retirement plans, creating problems when they get into financial straits.
While the House of Representatives has approved a measure providing $25 billion in relief to troubled corporate pensions in 2004 and 2005, the Senate is expected to attempt larger reforms to the system later this year, a politically contentious proposition.
