The deficit of the government's troubled Pension Benefit Guaranty Corporation has risen to $36 billion from $34 billion, the agency reported on Friday.
The government’s pension bailout arm said that driving the increase was a $3 billion increase in the deficit of multi-employer plans such as those offered by unions. More of these are set to fail in the next decade, and the PBGC deficit for them rose to $8.2 billion.
The PBGC directly pays pensioners, up to a maximum of $59,000 a year, when an employer bankruptcy or bad financial management causes a private pension to fail. Congress has so far been unable to pass needed legislation that, among other things, could allow the agency to charge higher premiums.
“PBGC stands ready to help, but PBGC’s growing deficit is a reminder that our current resources are inadequate. Without adequate funding we can’t pay benefits or preserve pensions,” PBGC Director Josh Gotbaum said.
“We should not let the problems of a few plans overshadow the reliable retirement security provided by the majority, but neither can we ignore them,” he added.
He pointed out in a press release that the deficit for single employer plans declined to $27.4 billion, down from $29.1 billion in 2012.