Warnings On Looming Pension Crisis

Top government officials have begun a calibrated campaign to bring attention to corporate pension plans, which they say may be on a road to collapse. But underneath their measured words are proposals that could fundamentally change the $1.6 trillion industry, altering the way pension money is set aside and invested.

On Wednesday, the comptroller general placed the Pension Benefit Guaranty Corporation, the agency that guarantees pensions, on a list of "high risk" government operations. Elaine L. Chao, the secretary of labor, issued a statement on the same day warning that the decades-old system in which workers earn government-guaranteed pensions "is, unfortunately, at risk."

Treasury Secretary John W. Snow, a former railroad chief executive who had responsibility for a $1.3 billion pension fund, warned recently that a financial meltdown similar to the savings-and-loan collapse of 1989 might be brewing.

Steven Kandarian, the executive director of the Pension Benefit Guaranty Corporation, gave a speech earlier this month in which he foresaw a possible "general revenue transfer" — polite words for a bailout of the agency.