PBGC, the government's pension insurance program, "has not taken over any Enron plans, but we are closely monitoring the situation," Steven Kandarian, PBGC executive director, testified at a Senate Finance Committee hearing.
The Associated Press notes that Enron's pension plan has not gotten much of the spotlight. Most of the focus in the scandal has been on the company's 401(k) plan and its employee stock ownership plans, which are not government-insured.
But Enron also offers traditional pension benefits that are insured. So if the plan goes broke, participants will be paid what they are owed by the government, the AP reports.
Enron's pension plan is underfunded by at least $125 million, Kandarian testified. The plan has about 20,000 participants and about $220 million in assets.
The program hasn't stopped paying benefits, and Enron could offer restructuring plans in bankruptcy, so PBGC hasn't stepped in, Kandarian said.
"Let me assure you the PBGC stands ready to pay guaranteed benefits to participants and beneficiaries if it becomes necessary to terminate the plan," he said.
The PBGC receives no funds from tax revenue. Operations are financed by insurance premiums set by Congress and paid by companies with defined benefit plans, assets from pension plans, investment income and money recovered from failed companies.
It now is paying current or future benefits to about 624,000 people in terminated plans. Payments exceeded $1 billion for the first time in 2001.
PBGC took in 104 plans with 89,000 participants last year. About 180,000 new participants are projected for this year - a record number.
To read the Associated Press article, via the Houston Chronicle, click here.
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executive director of the Pension Benefit Guaranty Corp. told Congress this week that Enron's pension plan is seriously underfunded, and the government might have to step in to pay guaranteed benefits.