Private pension plans have reached a record level of underfunding. As reported
here, companies in Standard & Poor’s 500 collectively reported that at the end of their most recent fiscal years, their pension plans had obligations of $1.68 trillion and assets of just $1.32 trillion. General Electric's pensions are underfunded by over $20 billion. AT&T, Boeing, Exxon Mobil, Ford Motor, I.B.M. and Lockheed Martin all have pension plans that are underfunded by over $10 billion. The Pension Benefit Guaranty Corporation, which insures pensions, has a deficit of over $30 billion. The PBGC attributes its shortfall to its inability to charge private employers adequate premiums for insuring pensions. When a private pension plan goes bust there's no guarantee that workers will get anywhere near what they had been promised. The PBGC ensures a maximum of $45,000 a year in benefits for those who retired at 65, but considerably less for those who retired younger. The PBGC's maximum coverage for those who retire at 60 is $28,000. It's not too hard to find instances of retirees seeing their pensions falling by 50% when the company funding them goes bankrupt.