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WASHINGTON – The federal agency that manages funds set aside to pay retirement benefits of workers enrolled in bankrupt plans increasingly is dipping into those monies to pay administrative costs, congressional investigators say. The “skyrocketing” expenses at the Pension Benefit Guaranty Corp. (PBGC) are occurring just as an increasing number of employer-provided pensions go broke, the General Accounting Office said, the Associated Press reported. In 2002, PBGC had a $3.6 billion deficit after exhausting its entire $7.7 billion surplus, for a net loss of $11.37 billion. PBGC assumed control of more than 144 pension plans covering 187,000 people in 2002, the AP reported. It also paid a $1.5 billion in benefits, nearly 50% higher than 2001. PBGC receives no funds from taxpayers, and is financed by insurance premiums set by Congress and paid by employers. In its response to the report, PBGC said congressional investigators failed to consider that the agency incurs numerous indirect costs when it terminates a pension plan. Also, its expenses have grown in relation to the pension plans it controls, the agency said.

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