PBGC’s Deficit and Ongoing Pension Valuation Debate

In the news today, the Washington Post reports that the Pension Benefit Guaranty Corporation disclosed yesterday that it has a deficit of $5.4 billion, as opposed to a surplus of $7.7 billion just 18 months ago. The Associated Press reports here that more than half of the 32,000 traditional pension plans offered by private employers are underfunded. This in turn relates to the debate going on over how to value pensions in the first place. CFO.com has an article which reports that officials at the Treasury Department believe changes need to be made in the way pensions are valued. A bill sponsored by Rob Portman (R-Ohio) and Benjamin Cardin (D-Md.) would increase the discount rate which is used for determining pension fund obligations and is currently being debated. The New York Times also reports on the subject.