PBGC Pension Insurance Data Book 2002

Update for Large Plan Terminations

The tables and charts in this book generally reflect data through September 30, 2002, the end of PBGC's 2002 fiscal year. However, in December 2002, PBGC announced its intention to terminate the pension plans of two large steel companies—Bethlehem Steel and National Steel. The claims from the Bethlehem plans, estimated at $3.9 billion, will be, by far, the largest PBGC has ever incurred. Those from National Steel, $1.3 billion, will be the third largest. These claims will significantly change the claims data presented in this book. Because of their large impact, we are providing this update to show some of the ways the termination of these plans will affect the claims position of PBGC's single-employer insurance program.

Gross claims against PBGC from 1975 through the end of Fiscal 2002 (excluding those from the Bethlehem and National Steel plans) totaled $11.0 billion with more than half this amount, $5.7 billion coming from the plans of just 10 companies. (See Table S-12.) The claims data in this book reflect the claims of trusteed plans and plans in the process of being trusteed. They do not include the expected claims from plans classified as "probables." Probable claims are the expected claims of those underfunded plans PBGC believes, with a high degree of confidence, will terminate in the near term. PBGC does not publicly identify plans classified as probables, but PBGC can disclose information on the Bethlehem and National Steel plans because the termination of those plans was announced after the end of FY 2002. For accounting purposes, PBGC books probable claims on its financial statement. The plans of both Bethlehem Steel and National Steel were classified as probables as of September 30, 2002, and, thus, the claims expected from the termination of these plans were reflected in the financial statements presented in PBGC's 2002 Annual Report. Five of these 10 companies were steel companies and three were airlines. Overall, claims from the primary metals industry accounted for 40 percent of all claims against the single-employer insurance program and those from the air transportation industry were responsible for another 20 percent. (See Table S-15.)

The $5.2 billion in estimated claims from Bethlehem Steel and National Steel will increase the total claims incurred by PBGC by almost 50 percent to $16.3 billion. With these two new claims, total claims from the primary metals industry will be $9.4 billion or 58 percent of the $16.3 billion total. The air transportation industry share of total claims will fall to 13 percent.

The table below shows the new list of 10 companies presenting PBGC with its largest claims ever. Almost half the $16.3 billion in total claims is from the plans of the six steel companies on this list. More than $2 billion is from the plans of three defunct airline companies. Together, the claims from these 10 companies account for 65 percent of all claims the insurance program has ever incurred.

Ten Firms Presenting Larget Claims

Return to Table of Contents