Overheard @: 'We had a $3 billion investment loss'

If the recession drags on, it will be a red-hot summer for the PBGC -- emphasis on "red."

In a report from BenefitNews.com, the Pension Benefit Guaranty Corp. reports that the agency’s underfunded liabilities for its single-employer insurance program hit an all-time high of $33.5 billion, surpassing the former record of $24 billion in 2004.

“The reason that our deficit grew is not because of investment losses, rather because of more plan terminations coming through the agency since the last fiscal year,” Constance Markakis, senior attorney advisor in the legislative and regulatory department at PBGC, said late last week. “We had a $3 billion investment loss on our $63 billion assets portfolio. Also, 70% of our assets are invested in fixed-income.”

Still, the recession and the stock market decline means more defined benefit plans are substantially underfunded, thus seeking distressed terminations. “The $33.5 billion includes both actual terminations and probable terminations, which are terminations that we predict will occur within the next year,” explained Markakis.

PBGC insures the pensions of about 33.8 million workers and retirees in about 28,000 private-sector DB plans under its single-employer insurance program and 10.1 million participants under its multiemployer program in about 1,500 plans, according to the Employee Benefit Research Institute.