Pensions in Peril - In Brief

Pension deficit disorder

• The agency established in 1974 to insure private pension plans, the Pension Benefit Guaranty Corp., is—by many accounts—in deep trouble. Poor financial management, bad bets in a falling stock market and an underlying problem of moral hazard have left too few assets in the system to pay pension benefits in the future.

• President Bush and several others have offered reform proposals involving higher insurance premiums, tighter funding requirements and greater financial transparency.

• But changes are being resisted by those who consider the problem overstated and proposed solutions too drastic. The likelihood of significant reform seems politically slim.

Pensions in Peril   [Complete article]