The total pension shortfall among the 1,050 pension plans that submitted reports for 2003 was $278.6 billion. The underfunded plans had $641.8 billion in assets to cover $920.3 billion in liabilities, for an average funded ratio of less than70%, according to data released by the Pension Benefit Guaranty Corporation (PBGC).
The figures from 2003 are down from the 1,058 pensions that reported an aggregate shortfall of $305.9 billion in 2002. However, compared to figures reported by the PBGC from 1999, they are up. In that year, only 166 plans reported a shortfall of $18.4 billion.
The reports from which the PBGC pooled its data from are required only of companies with more than $50 million inunfunded pension liabilities, as measured on the basisused to calculate PBGC premiums. Individual company reports are nonpublic by law, the PBGC said.
Breaking down the aggregation, the PBGC said airline and steel companies still have a significant amount of underfunding to contend with. In the airline sector, 11 companies reported a total of $31 billion in pension underfunding in plans covering 444,000 participants. In the steel industry, seven companies reported a total of $6 billion in pension underfunding in plans covering 213,000 participants.
“Today’s announcement on the amount of underfunding among defined benefit plans that exists today remains a cause for significant concern and underscores the need for comprehensive reforms to strengthen the defined benefit system over the long-term,” said U.S. House of Representatives Education & the Workforce Committee Chairman John Boehner (R-Ohio) commenting on the numbers. “Congress is “committed to this effort and are making progress in addressing the underfunding problems that put worker and retiree benefits at risk.”
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