PBGC Says Funds "Stronger Than Ever"

March 29, 2001 (PLANSPONSOR.com) - The finances of the nation's pension insurance fund have never been stronger, according to the Pension Benefit Guaranty Corporation (PBGC).

As of September 30, 2000, PBGC’s single-employer program had assets of $20.7 billion and liabilities of about $11 billion, resulting in a positive net position of $9.7 billion.

The PBGC cited significantly higher earnings from investments and low losses from plan terminations as the primary factors for the strong bottom line of the program, which covers more than 34 million people.

It was the fifth consecutive annual surplus, which peaked at $2.9 billion in 1993, following more than two decades of deficits.

The agency maintains a separate insurance program for multi-employer plans, which has recorded a surplus since 1982.

Covering more than 9.1 million individuals in 1,750 plans, the multi-employer program currently enjoys a positive net position of $267 million, with assets of $694 million and liabilities of $427 million.

Total investment income exceeded $2.46 billion due to strong returns from both fixed-income and equity investments. Premium income declined by $94 million as variable-rate premium payments fell for the fourth year in a row, a sign of the strengthening financial positions of the nation’s pension programs.

Current Coverage

Through the two insurance programs, PBGC paid out $903 million in benefits to 226,700 people last year. 

The agency currently has direct responsibility for the pensions of about 541,000 people, including those who will retire in the future, and 2,874 terminated pension plans.

In addition to the financials, the annual report also details PBGC’s progress in meeting the performance goals set under the agency’s five-year strategic plan.

PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by more than 43 million American workers and retirees participating in nearly 38,000 private sector defined benefit pension plans.