Pension Benefit Guaranty Corp

The Pension Benefit Guaranty Corp. said Monday that it had adopted an investment policy designed to increase chances that the government pension guarantor would be fully funded within 10 years. "The PBGC is responsible for the pensions of 1.3 million Americans, but we don't currently have the resources to keep all of our future commitments," Director Charles Millard said.

Building on requirements imposed after the 2001 terrorist attacks, the Federal Aviation Administration proposed new rules to make it harder for hijackers to break into airliner cockpits. The plan would require that manufacturers design jetliners with stronger floors, bulkheads and ceilings. It also calls for the installation of a reinforced closet where a bomb could be placed if one was found during a flight.

A federal agency said Friday that it had taken responsibility for pension plans covering nearly 900 workers and retirees of Kaiser Aluminum & Chemical Co. The Pension Benefit Guaranty Corp., which insures private defined benefit pension plans, estimated that the four pension plans had combined assets of $20.1 million to cover promised benefits totaling $29.6 million. The agency said it would be liable for $2.7 million of the $9.5-million shortfall. Kaiser Aluminum & Chemical Co.

Just before Christmas, retired United Airlines worker Jerry Formulak saw his pension check shrink by $500 a month. On Tuesday, he had a chance to ask how it could happen. "At one point, they [United] were spending money hand over fist," he said. "How could they get away with not putting enough money in the pension?" The question was largely rhetorical.

A federal agency said Friday that it had taken responsibility for three pension plans covering nearly 4,000 workers and retirees of Aloha Airlines, which recently emerged from bankruptcy protection. The Pension Benefit Guaranty Corp., which insures private defined-benefit pension plans, estimated that together the three plans were 55% funded, with $190 million in assets to cover $345 million in benefit promises. The agency said it would be liable for $117 million of the $155-million shortfall.

General Motors Corp. said the federal Pension Benefit Guaranty Corp. had assured it that the buyer of a majority stake in GM's financing unit, General Motors Acceptance Corp., wouldn't be held responsible for GM's pension plan. GM disclosed its agreement with the PBGC in a Securities and Exchange filing. GM also said a unit of PNC Financial Services Group Inc. had joined a Cerberus Capital Management-led consortium to take control of GMAC.

Two senators are asking Congress to find out whether the federal agency that insures private pension plans for millions of Americans has enough money and the right approach to do its job. Finance Committee Chairman Charles E. Grassley (R-Iowa) and the panel's top-ranking Democrat, Max Baucus of Montana, said they wanted the Government Accountability Office to report back by early next year with preliminary information on the Pension Benefit Guaranty Corp.

The federal agency that insures private pension plans for millions of Americans logged a deficit of $18.1 billion this year, a big improvement from last year as a new law helped put the agency on better financial footing. The narrower deficit for the 2006 fiscal year reported by the Pension Benefit Guaranty Corp. on Wednesday was down from a shortfall of $22.8 billion recorded in 2005 and a record $23.3 billion posted in 2004.

Delta Air Lines Inc. and the Pension Benefit Guaranty Corp. have reached a settlement over some key issues related to the carrier's request to terminate its pilot pension plan. Under the agreement, the government's pension insurer would get an unsecured claim of $2.2 billion against the nation's third-biggest carrier. That would put it in line with other unsecured creditors for compensation after Delta emerged from bankruptcy protection.

The federal agency that insures private pension plans for millions of Americans said the maximum annual benefit for plans taken over next year would be $49,500 for workers who wait until 65 to retire. That's up from $47,659, which is this year's maximum annual benefit, said the Pension Benefit Guaranty Corp.