The 10 Biggest Pension Failures

But workers still received their payouts, here’s how much the typical retiree pocketed

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Many traditional pension plans are currently underfunded. But no pension terminations in fiscal year 2008, which ended September 30, have made it into the ranks of the largest pension terminations since 1975, according to data released this week by the Pension Benefit Guaranty Corp. (PBGC), a government agency that insures private-sector pension plans and pays out benefits if the plan fails.

Pension plans abandoned by just two industries, metals and air transportation, account for the majority (73 percent) of PBGC’s payouts. The 10 firms with the largest terminated retirement plans have made up 62 percent of all claims against the PBGC from 1975 to 2008. Here’s a look at the largest terminated pension plans insured by the PBGC between 1975, the year the government began insuring private sector pensions, and 2008.

Firm and year terminated Total claims    Vested Participants Average claim per participant
1. United Airways (2005) $7.3 billion 122,541 $59,217
2. Bethlehem Steel (2003) $3.7 billion 91,312 $40,021
3. US Airways(2003,2005) $2.7 billion 55,770 $48,412
4. LTV Steel (2002,2003,2004) $2.1 billion 83,094 $25,694
5. Delta Air Lines (2006) $1.7 billion 13,028 $133,533
6. National Steel (2003) $1.3 billion 33,737 $37,811
7. Pan American Air (1991,1992) $0.8 billion 31,999 $26,285
8. Trans World Airlines (2001) $0.7 billion 32,236 $20,717
9. Weirton Steel (2004) $0.6 billion 9,410 $68,064
10. Kaiser Aluminum (2004,2007) $0.6 billion 17,727 $33,694
Top 10 total $22 billion 490,881 $43,816
All other total $13 billion 1,097,767 $12,155

Source: Pension Benefit Guaranty Corp.

The pension insurance agency made regular payments to almost 640,000 Americans in 2008 and lump-sum payments to another 17,000 participants, dispersing almost $4.3 billion to retirees and their beneficiaries, PBGC said in its annual data report. Another 495,000 individuals are eligible for future PBGC benefit payments.