The Analytical Economist; July 1994; Scientific American Magazine; by Wallich; 1 Page(s)
Adisquieting change may soon disrupt the retirement ritual in corporate America. The gold watch and the handshake may linger, but the pension could be in deep trouble. As an increasing number of large companies run into financial difficulty and an aging population swells the ranks of retirees, concern grows about the safety of the retirement benefits secured by privately funded pension plans.
By last year the gap between employers ' pension liabilities and the corresponding assets exceeded $53 billion, nearly four times the figure of just a decade ago. The government-run Pension Benefit Guaranty Corporation (PBGC), which stands behind retirement plans whose sponsors default, has a mere $8 billion in hand to cover the potential shortfall.