The Pension Benefit Guaranty Corp. (PBGC) on Friday reported a $34 billion deficit for fiscal year 2012, a significant jump from the agency's $26 billion deficit last year.
While the PBGC noted in a release announcing the deficit that this year's amount is the largest in PBGC's 38-year history, the American Benefits Council (ABC) called the deficit number "misleading."
The public, "should not be led to believe the PBGC is in danger of a bailout and Congress and the Obama Administration should not use this number as a pretext to raise premiums paid by pension plan sponsors," said ABC President James Klein. "As employer pension plan sponsors have repeatedly pointed out, all pension fund liabilities—including the PBGC's—are overstated by the historically low interest rates of the past several years. Keeping interest rates low is good policy to stimulate the economy, but it has the perverse effect of making very secure pension funds—and the PBGC's own situation—appear underfunded."
