-->BANKRUPTCIES ARE SINKING PENSION AGENCY
NY POST

October 8, 2004 -- The longer-term solvency of the U.S. agency that insures pensions is at risk, threatened by troubled airlines and other companies failing to fund their retirement plans, the agency's director said yesterday.
Pension Benefit Guaranty Corp. Director Bradley Belt said he expects to report a significantly increased deficit for fiscal 2004, which ended Sept. 30, eclipsing 2003's record $11.2 billion deficit for the single employer insurance fund.


The pension agency slipped into a deficit in 2002 after having to bail out failed pension plans in the steel industry.

Since then, troubled airlines have been straining the safety net for traditional pensions that guarantee a set payout at retirement.

US Airways Group Inc. was due in bankruptcy court yesterday to argue its case for suspending pension payments after saddling the PBGC with $2.2 billion in liabilities from its previous bankruptcy, which ended in 2003.

Bankrupt UAL Corp., parent of United Airlines, has said it is weighing terminating its pension plans.

The pension agency, currently paying monthly benefits to nearly half a million people, can keep paying benefits for"a number of years" but needs reforms to sustain it, Belt said. Reuters