6 big Md. employers underfund pensions, U.S. says

November 26, 1991|By Kim Clark

Six of Maryland's biggest industrial employers were listed yesterday as having set aside too little for their workers' retirements.

But pension rights advocates said workers for most of the companies on the federal government's annual list of underfunded pensions, issued yesterday, shouldn't worry about the shortages because most of the companies are financially strong and will pay their obligations.

The Pension Benefit Guaranty Corp., the government office that guarantees pension funds, said yesterday that the companies it follows fell farther behind on their pension obligations this year.

The total amount of money the PBGC estimates it may have to pay out for failed pension funds jumped from $8 billion to $14 billion in the last year, the agency said.

But those dire numbers "are not a cause for alarm," insists Karen Ferguson, director of the Pension Rights Center of Washington.

Ms. Ferguson, who heads the non-profit advocacy group, said companies may temporarily be underfunding their pension plan, but as long as they are in good financial condition, the gap doesn't matter.

General Motors Corp. jumped from 50th on last year's list to 35th this year as its funding ratio -- which compares a pension fund's assets to its liabilities -- dropped to 83 percent. The gap between what it has saved for its retirees and what it will have to pay them leaped to $7.1 billion.

GM's minivan plant on Broening Highway employs about 3,400.

But Paul Jackson, a Bethesda man who worked as an actuary for GM's pension plan until he retired recently, said the widened gap is due primarily to inflation and will be made up in a couple of years.

Cyclops Industries Inc. was ranked 23rd, having funded 70 percent of its pension obligations. Cyclops owns the Eastern Stainless Steel plant in Baltimore, which has about 600 workers.

Bethlehem Steel Corp. was 24th, having funded 71 percent. Bethlehem's Sparrows Point steel mill and ship yard employ about 7,400 workers.

Westinghouse Electric Co. was listed 39th for having funded 84 percent of its pension obligations. Westinghouse employs 12,700 workers around the state.

Allied-Signal Inc., which has set aside money for 93 percent of its obligations, was listed 47th. Allied-Signal employs about 3,600 workers in Maryland.

And Armco Inc., owner of the 800-worker Baltimore Specialty Steels Corp., was listed 48th. Armco had funded 93.2 percent of its pension liability, the PBGC said.

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