The 10 Biggest Failed Pension Plans

A new firm makes this year’s list.

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Pension plans abandoned by just ten companies make up 63 percent of all claims paid out by the Pension Benefit Guaranty Corp., the government agency that insures private sector pensions. Just two industries, air transportation (33 percent) and metals (27 percent), make up the majority of pension failures, according to PBGC data released last week. But a new type of firm jumped to number two this year.

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When the PBGC assumed responsibility for six underfunded pension plans promised to 69,042 Delphi Corp. workers and retirees in July 2009, it became the second biggest pension failure since the PBGC was formed in 1974. The $6.1 billion worth of benefits promised to current and former workers at the automotive parts manufacturer is second only to the $7.4 billion United Airlines pledged to 123,957 employees before the PBGC took over the plan in 2005. Delphi knocked Kaiser Aluminum, which had $0.6 billion in total claims owed to 17,727 pension participants in 2008, off of the top 10 list.

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Motor vehicle equipment manufacturers are now responsible for 15 percent of all PBGC claims. Here’s a look at the 10 biggest pension failures ever turned over to the PBGC.

Firm and Year Terminated Total Claims Vested Participants Average Claim Per Person
1. United Airlines (2005) $7.4 billion 123,957 $60,033
2. Delphi (2009) $6.1 billion 69,042 $88,475
3. Bethlehem Steel (2003) $3.7 billion 91,312 $40,021
4. US Airways (2003) $2.8 billion 55,770 $49,337
5. LTV Steel (2002, 2003, 2004) $2.1 billion 83,094 $25,694
6. Delta Air Lines (2006) $1.6 billion 13,291 $123,473
7. National Steel (2003) $1.3 billion 33,737 $37,811
8. Pan American Air (1991, 1992) $0.8 billion 31,999 $26,285
9. Trans World Airlines (2001) $0.7 billion 32,263 $20,717
10. Weirton Steel (2004) $0.6 billion 9,410 $68,064
Top 10 Total $27 billion 543,875 $49,933

Source: Pension Benefit Guaranty Corp.

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PBGC paid nearly $4.5 billion worth of ongoing payments to approximately 750,000 retirees and lump-sum payments to 12,000 pension participants in 2009. Another 565,000 individuals are eligible for future PBGC benefit payments.