Short of Funds
|Short of Funds|
Declining interest rates and equity values, rising benefit obligations, increasing liabilities and a lack of sufficient cash contributions to defined-benefit pension plans have caused total underfunding to rise from about $40 billion in 2000 to $450 billion in 2004. If all plan sponsors decided to exit the defined-benefit system simultaneously, they would have to buy $450 billion in private sector annuities to satisfy their pension obligations.
Source: Testimony of Bradley Belt before the House Committee on Education and the Workforce, March 2, 2005