The Next Scrambled Nest Egg? Time (08/11/03) Vol. 162, No. 6 p.48; Thottam, Jyoti
Defined-benefit pensioners can only sit back and watch as companies struggle to meet their obligations to retirees. Meanwhile, government officials are trying to develop a temporary solution to help retirees stay financially afloat, which is a difficult task considering the Pension Benefit Guaranty Corp. (PBGC) has a deficit of $5.4 billion and rising as more and more companies declare bankruptcy. Originally, the PBGC was created to pay a fraction of the pension obligations for troubled companies, but since the economy has faltered, more companies have turned to the agency for help. Retired pilots appear to be the group hardest hit by the pension crisis, because the airline industry was thrown into disarray by the September 2001 terrorist attacks in the United States, and airlines like United and U.S. Airways were forced to declare bankruptcy. Stock market losses, low interest rates, and other factors have contributed to the decline of retirement funds, which were once supposed to be a stream of income for older Americans, and many retirees are being forced to re-enter the workforce. Other experts conclude that the stock market is recovering and that government reforms of the pension systems are unnecessary, but retirees would not agree.