Pension Plan Carries Hefty Surplus

Thanks to the strong economy, the government’s back-up fund for private workers’ pensions had a surplus of $7 billion in 1999.

It was the fourth consecutive year in the black for the Pension Benefit Guaranty Corp., after 20 years of deficits that reached a high of $2.9 billion in 1993.

“The millions of Americans whose pension benefits are backed up by PBGC can be assured that there is a strong PBGC protecting their retirement security,” Labor Secretary Alexis Herman said.

The PBGC insures nearly 40,000 private pension plans relied upon by about 43 million Americans, promising to pay benefits if employers fail to. It is financed from insurance premiums paid by companies as required under a 1974 law.

A separate account kept by PBGC to insure pension plans that are jointly sponsored by several employers had a surplus of $199 million in 1999.

The agency has taken responsibility for paying benefits to about 532,000 people, either retired now or in the future, who were enrolled in 2,785 corporate pension plans that have terminated.

In 1999, PBGC paid $902 million in benefits to 214,890 people.

The strong economy has helped the pension back-up fund because there have been fewer failures of corporate pension plans and the reserve account’s own investments have done better.

But the fund’s executive director, David M. Strauss, said, “Although our financial condition is strong today, we must always remain vigilant.”

Booklet advises on pension, taxes

If you receive a pension, must you file a federal income tax return? To find out, read IRS Publication 3137, “People on a Pension: You May Not Be Required To Have Federal Tax Withheld.”

With this plain-language booklet, you can do a few simple calculations to figure out whether you must file a federal return. You can also use the booklet to see if you must have federal income tax withheld from your pension.

For your free copy, call the IRS at 1-800-829-3676 any time, or contact the agency’s Web site: http://www.irs.gov

`Money’ suggests safe stocks

Would you like to invest in the stock market without taking too much risk?

“Here’s a sound strategy for buying into the hottest market ever,” says Money, March. “The following stocks have room to run, but without the risk of buying the market’s high-flying, high-tech darlings.”

Under “Tech For the Right Price,” the story lists Lucent Technologies Inc., Bell Atlantic Corp., Electronic Data Systems Corp. and Quantum DLT Corp.

Under “Best of the Rest” are Merck & Co. Inc., Bristol-Myers Squibb Co., Wells Fargo & Co., Lowe’s Cos. Inc. and Nabors Industries Inc.