Companies with underfunded pension plans reported a shortfall of $278.6 billion in 2003, down slightly from the $305.9 billion reported in 2002, according to the Pension Benefit Guaranty Corp.
Last year’s total, however, is still dramatically higher than the $18.4 billion reported in 1999.
The 2003 reports were submitted for 1,050 pension plans covering millions of workers and retirees. The underfunded plans had $641.8 billion in assets to cover $920.3 billion in liabilities, for an average funded ratio of 69.7 percent. As recently as 2000, the average funded ratio was 82.8 percent.
Not surprising, a significant amount of pension underfunding continues to exist in the airline and steel industries. In the airline sector, 11 companies reported a total of $31 billion in pension underfunding in plans covering 444,000 participants. In the steel industry, seven companies reported a total of $6 billion in pension underfunding in plans covering 213,000 participants.
Since the PBGC’s inception in 1974, these two sectors have accounted for more than 70 percent of the claims against the pension insurance program while representing less than 5 percent of insured participants.