The loss resulted from a combination of underfunded plan terminations, a loss on equity investments ($748 million), and actuarial charges, according to the Pension Benefit Guaranty Corporation (PBGC).
The agency paid out more than $1 billion in benefits to nearly 269,000 people last year, according to the report. It was a year in which the PBGC took over 104 terminated single-employer plans covering almost 89,000 people, its largest one-year increase.
However, PBGC projects that it will cover a record 180,000 participants this year.
Its single-employer program, which covers about 35 million people, had assets of nearly $21.8 billion and liabilities of about $14 billion for the financial year ending Sept. 30. That marked the sixth year of surplus in a row for the fund, after more than 20 years of running a deficit.
The agency had its largest pension takeover ever last month, assuming control of three underfunded retirement plans of bankrupt steelmaker LTV (see LTV Dumps Pension Liability on PBGC ). That $2.2 liability covering 82,000 workers and retirees was the largest-ever federal pension takeover.
The PBGC’s separate insurance program for multi-employer plans, which has reported a surplus since 1982, remained sound with a positive net position of $116 million despite a loss of $151 million. This program’s loss was attributable to an increased allowance for probable losses from future financial assistance.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by about 44 million American workers and retirees participating in private-sector defined benefit pension plans.