Insurer of pensions hits record deficit

WASHINGTON – The federal agency that insures pensions for one in seven Americans ran the largest deficit last year in its 37-year history.

The Pension Benefit Guaranty Corp. said Tuesday that it ran a $26 billion imbalance for the budget year that ended Sept. 30.

The agency has been battered by the weak economy, which has brought more bankruptcies and failed pension plans.

Their pension obligations rose by $4.5 billion. The PBGC also earned less money in the stock market, which helps to fund pension plans. Returns were $3.6 billion, half what it earned the previous year.

Joshua Gotbaum, the agency director, says taxpayers may have to bail out the agency “eventually” if Congress doesn’t raise companies’ insurance premiums. He didn’t give a timeframe.

The agency insures the pensions for nearly 44 million U.S. workers.

The Obama administration put a proposal before Congress in January to increase premiums and tailor them to the size of companies and their level of financial risk. Bigger companies and those at greater risk of failing would pay larger premiums under the plan. Congress hasn’t acted on it.

The fees haven’t been raised in five years.