NEW YORK (CNN/Money) -
Many of the nation's private sector pension plans are seeing a bigger gap between their assets and their promised benefit levels, according to a published report Tuesday.
The Washington Post reported that the Pension Benefit Guaranty Corp. (PBGC), the government agency that insures the funds, says the 1,108 weakest pension plans were short by an aggregate $353.7 billion at the end of last year.
That figure, which covers the 1,108 weakest pension plans whose assets are at least $50 million below the value of the benefits promised, is up 27 percent from the end of 2003.
"Despite a strong economy, pension plans are reporting even larger shortfalls than last year. Clearly we need new rules that will require companies to fund the pension promises they make," PBGC Executive Director Bradley Belt said Monday, according to the Post.
The Bush administration has proposed new rules which would require greater funding of the plans, known as defined benefit plans because they promise a specific monthly benefit to retirees of the companies.
The Senate Finance committee will hold a hearing on proposed pension reforms Tuesday. Along with the PBGC report on the size of pension funding problems, the New York Times reported Tuesday that it will also hear that much of the problem at United Airlines and other companies with underfunded plans were disguised by federal pension rules, which allowed the companies to treat the funds as fully funded.
The Bush administration is also proposing a hike in premiums that companies with those plans would be required to pay to the PBGC due to an estimated $23 billion shortfall between the agency's own assets and the benefit it owes current and future retirees of plans it has been forced to take over.
For a deeper look at the troubles facing the nation's pension plans, click here.
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