Sunday, April 3, 2011

NASA Must Cover $548 Million USA Pension Fund Shortfall

Space News reports that "The single biggest check NASA expects to write next year will go to United Space Alliance (USA) to cover a half-billion-dollar shortfall in the space shuttle contractor’s pension fund."

It is not NASA’s fault USA’s pension fund — held in stocks, bonds and other assets company officials said are worth between $600 million and $700 million — has just a little over half of the money it needs to guarantee retirement pay promised to 11,000 past and current employees.

But the U.S. space agency is legally obligated to make up the shortfall, which totaled more than $500 million as of January, because USA operates the shuttle fleet under a cost-reimbursable contract that entitles the company to charge the government for personnel costs, including pay and benefits.

The Obama administration's plan to use commercial crew and cargo services would presumably free NASA of any such future obligations, as the space agency would simply purchase flights to the International Space Station from a private vendor.

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