WASHINGTON--Employers with large underfunded pension plans had an aggregate funding shortfall of nearly $280 billion last year, a slight improvement over 2002 but up dramatically from just a few years ago, the U.S. Pension Benefit Guaranty Corp. reported Thursday.

In 2003, 1,050 pension plans--each with at least $50 million in unfunded liabilities--were underfunded by a total of $278.6 billion. That compares with a funding deficit for 1,058 plans of $305.9 billion in 2002 and a funding shortfall of $18.4 billion for 166 plans in 1999, when a booming stock market significantly boosted the value of pension plan assets.

Pension underfunding was heavily concentrated in several industries. For example, in the financially troubled airline sector, 11 companies reported a total of $31 billion in pension underfunding, a sign of the huge financial exposure the PBGC faces from that industry.

In addition, seven steel industry companies reported that their pension plans last year were underfunded by a total of $6 billion.

Since 1974, pension plan terminations by airline and steel companies have accounted for more than 70% of the PBGC losses.

The information is based on reports that employers whose pension plans are underfunded by at least $50 million must file each year with the PBGC.