>The midyear check up was a slight improvement from the program’s 2003 fiscal year end deficit of $11.2 billion. However, the nation’s private pension insurer said the improvement came against a backdrop of significant risk. As of the end of fiscal year 2003, the program had approximately $85.5 billion in “reasonably possible” exposure, defined as the amount of unfunded vested pension benefits promised by financially weak employers, the PBGC said.
>Making up a large portion of the program’s overall underfunding was the air transportation sector, which accounted for $23.4 billion, or 27%, of the total. Overall, the PBGC’s single-employer program insures the pensions of 34.5 million Americans in 29,500 plans.
>Also improving was the PBGC’s multiemployer deficit, which now stands at $150 million. This is a significant improvement from a $261 million deficit at the end of fiscal year 2003. The multiemployer program covers 9.7 million participants in more than 1,600 plans.
>The midyear financial checkup, a program implemented by new PBGC Executive Director Brad Belt, is a snapshot of the PBGC’s finances as of March 31, 2004. Previously, the agency only released the net position of its insurance programs once a year, but Belt said the PBGC would provide more frequent disclose of key information about the financial health of its own insurance programs as well as the defined benefit pension system that it insures.
“One of the Administration’s core pension principles is greater transparency in the defined benefit system,” Belt said. “The PBGC will further that goal by providing more information to workers, retirees and the capital markets.”