Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, February 28, 1991 TAG: 9102280112
SECTION: BUSINESS PAGE: C6 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The Pension Benefit Guaranty Corp. blamed the huge loss on the general downturn of the U.S. economy and the struggling airline industry.
"The weakened condition of several employers with large underfunded pension plans and the restructuring of the airline industry led to increased losses for PBGC," the agency's annual report said.
Included in last year's estimated losses were the seven pension plans terminated by now-defunct Eastern Air Lines.
Eastern's bankrupt parent, Continental Airlines Holdings, was on a list the agency released earlier this week of the top 50 underfunded pension plans, as was Pan American World Airways, another bankrupt airline.
The $928 million loss from plan terminations, which includes plans labeled "probable" losses, was nearly six times as high as the $163 million loss in 1989, the agency said.
The agency's accumulated deficit almost doubled, surging to $1.8 billion from about $1 billion in 1989.
However, the agency said it has sufficient cash flow to continue paying benefits.
The Labor Department stepped up its enforcement of federal pension laws by adding inspectors last year and Congress is studying other ways to ensure that pension plans are safe so the nation's pension system doesn't turn into another savings-and-loan crisis.
While pension plan losses totalled $928 million in 1990, the agency's net loss was $780 million after assets were figured in.
The PBGC guarantees payment of basic retirement benefits to about 40 million American workers and retirees participating in private-sector defined benefit pension plans.
by CNB