Senate Budget Committee Chairman Patty Murray (D-WA) and House Budget Committee Chairman Paul Ryan (R-WI) hold a press conference to announce a bipartisan budget deal, the Bipartisan Budget Act of 2013, at the U.S. Capitol on December 10, 2013 in Washington, DC. The $85 billion agreement would set new spending levels for the next two years and create $63 billion in so-called 'sequester relief.' - 

[UPDATED 12:45PM EST] One of the details in yesterday’s budget deal concerns an agency that many Americans have probably never heard of.  But about 44 million people’s retirements could depend on the Pension Benefit Guaranty Corporation -- PBGC for short -- and the agency has run deficits for years.

Right now, it’s $36 billion in the red.  The proposed deal would raise about $8 billion, but that’s not enough, says Olivia Mitchell, who runs the Pension Research Council and teaches at the University of Pennsylvania’s Wharton School of Business.

The PBGC is like a national insurance company for private pension plans:  When companies go bankrupt, and they can’t make good on their pension obligations, the PBGC steps in. 

Mitchell says the agency’s current deficit is only the beginning.

“The problem is, the PBGC faces additional shortfalls for companies that have not yet filed for bankruptcy,” she says. “The possible overhang could be on the order of $300 billion.”

So, if we think of PBGC like a health insurance company, it’s one where all the customers are old and sick. It only serves companies with old-school, “defined-benefit” plans—the kind that guarantee specific income levels for retirees.  And young, healthy companies aren’t setting those up.

The proposed budget deal will effectively raise the premium for companies that are covered now, which Lynn Dudley calls “a terrible idea.” She’s an executive with the American Benefits Council, which lobbies the federal government on behalf of employer-sponsored benefit programs, including pensions.

Like a health-insurance plan that raises rates on its old, sick members, the PBGC would be “shrinking the base” of people who pay in, she says.  In other words, she thinks raising rates could actually make the PBGC go broke.

Mitchell says the question isn’t if the PBGC will go broke: It’s when. She thinks 10 to 12 years is a reasonable estimate.

“But many of us retirees will probably still be around in 10 or 12 years,” she says. “So it’s a dire circumstance.” 

Follow Dan Weissmann at @danweissmann