The government has guaranteed much more than the can possibly pay for in the worst case scenerio.
The deficit at the federal agency that guarantees pensions for 44 million Americans more than doubled in the last six months to a record high, reaching $33.5 billion, largely as a result of the surging number of bankruptcies among companies whose pensions it must now take over.
The Pension Benefit Guaranty Corporation, as of October, had faced a shortfall of $11 billion. But the combined effect of lower interest rates, losses on its investment portfolio and the increase in the number of companies filing for bankruptcy protection resulted in a deepening of its estimated deficit, officials said Wednesday.
Because the agency has $56 billion in assets - most of which is invested in Treasury bonds - it is not facing any prospect of default in the short term, officials said.
"The P.B.G.C. has sufficient funds to meet its benefit obligations for many years because benefits are paid monthly over the lifetimes of beneficiaries, not as lump sums," the agency's acting director, Vince Snowbarger, said in a statementWednesday. "Nevertheless, over the long term, the deficit must be addressed."
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