The federal pension program, which protects the retirement incomes of more than 44 million American workers, saw its deficit nearly double in the past year, reaching a record high of $62 billion, the widest deficit in the 40-year history of the program, according to a report released Monday.
Unless Congress steps in, the Pension Benefit Guaranty Corporation (PBGC) has such a large deficit that the report estimates a 50 percent chance of collapse within the next eight years, and a 90 percent chance by 2025.
The increased deficit is largely due to the worsening of finances in some multi-employer pension plans, which are in turn jeopardizing the rest of the program. Multi-employer plans involve groups of businesses joining with unions to provide pension for workers, according to the The Washington Post.
A fluctuating stock market and a decline in employment and union membership account for much of the deficit.
Certain industries such as trucking, construction, mining, retail, food and garment enterprises, have been affected more than others.
While many underfunded multi-employer plans have taken the steps to avoid insolvency, such steps on their own are "not enough," according to U.S. Secretary of Labor, Thomas Perez.
"Congress and stakeholders need to work together to provide solutions and additional tools to help preserve these critically important multi-employer plans," Perez wrote in the report. "The future of the PBGC's insurance programs is vital to the retirement security of America's middle class."
A few changes Congress could make to help secure the future of PBGC include hiking insurance premiums or allowing for preemptive pension cuts in struggling plans, The Washington Post reported.
A premium increase for pensions insured by the plan was proposed by the Obama administration, but Congress has not yet ruled on the issue.
Last year's deficit was $36 billion, however, the deficit in the single-employer program fell to $19.3 billion from $27.4 billion.
