In brief: Pension guarantor’s deficit nearly doubled
Washington – The government-chartered company that insures the pensions of one in seven Americans said Friday that its deficit this year nearly doubled to $22 billion.
That’s an improvement over the Pension Benefit Guaranty Corp.’s midyear record deficit of $33.5 billion, which spiked as auto makers and other companies faltered and caused the fund’s liabilities to spike.
Experts and officials say that without major changes, such as higher insurance premiums and less risky investments, the fund eventually will require a taxpayer bailout.
The PBGC’s finances this year have been battered by the weak economy, which put it on the hook for 144 new pension plans that failed during the year ended Sept. 30. That compares with 67 in the previous year.
Deal struck on mining Otter Creek coal field
Billings – Arch Coal Inc. has signed a lease agreement to mine the vast Otter Creek coal field in southeastern Montana – ramping up pressure on Gov. Brian Schweitzer and other state officials to lease adjacent coal tracts controlled by the state.
If developed, the 731 million tons of coal would serve power plants in the northern U.S. and provide future supplies for St. Louis-based Arch to expand into coal markets in the Pacific Rim, said Arch CEO Steven Leer.
Combined with Montana’s tracts, the newly leased reserves in the Powder River Basin contain 1.3 billion tons of coal. That’s more than the entire United States burns annually.
Yet it will be difficult for Arch – the nation’s second largest coal company – to move forward without enlisting the state’s cooperation.
The private and public coal tracts are arranged in a checkerboard fashion – meaning development would need to occur in tandem to be economical. And because the reserves are isolated from existing transportation routes, a long-stalled railroad would have to be built to get the fuel to customers.
Euro zone economy shows modest growth
London – Buoyed by strengthening rebounds in Germany and France, the 16-nation euro zone officially climbed out of its worst recession since World War II, fueling hopes that a lasting global recovery is beginning to take shape.
The data released Friday – showing modest 0.4 percent growth among the nations that use the euro during the third quarter, compared to a 0.2 percent contraction in the second quarter – came after the United States and Japan have also officially emerged from recession.