both the single-employer and multiemployer programs and of nonrecoverable future financial assistanceunder the multiemployer program. Methods and procedures for both single-employer and multiemployerplans were generally the same as those used in 2005.

Present Value of Future Benefits and Nonrecoverable Financial Assistance - 2006

	Number of Plans	Number of Participants (in thousands)	Liability (in millions)
1. SINGLE-EMPLOYER PROGRAM
A. Terminated plans
1. Seriatim at fiscal year-end (FYE)	3,300	540	$20,598
2. Seriatim at DOPT, adjusted to FYE	53	106	7,433
3. Nonseriatim (note 1)	320	496	36,549
4. Rettig Settlement (seriatim) (note 2)		*	1
5. Missing Participants Program (seriatim) (note 3)		19	44
Subtotal	3,673	1,161	64,625
B. Probable terminations (nonseriatim) (note 4)	27	128	17,430
Total (note 5)	3,700	1,289	$82,055
2. MULTIEMPLOYER PROGRAM
A. Pre-MPPAA terminations (seriatim)	10	*	$ 2
B. Post-MPPAA liability (net of plan assets)	85	110	1,876
Total	95	110	$ 1,878

* Fewer than 500 participants

Notes:
1) The liability for terminated plans has been increased by $55 million for settlements.

2) The Rettig Settlement refers to the liability that the PBGC incurred due to the settlement of a class action lawsuit that increased benefits for some
participants and provided new benefits to others. The remaining participants not yet paid are valued seriatim.

3) The Missing Participants Program refers to a liability that the PBGC assumed for unlocated participants in standard plan terminations.

4) The net claims for probable plans reported in the financial statements include $87 million for not-yet-identified probable terminations. The assets for the
probable plans, including the expected value of recoveries on employer liability and due-and-unpaid employer contributions claims, are $12,568 million.
Thus, the net claims for probable terminations as reported in the financial statements are $17,430 million less $12,568 million, or $4,862 million.

5) The PVFB in the financial statements ($69,143 million) is net of estimated plan assets and recoveries on probable terminations ($12,568 million), estimated
recoveries on terminated plans ($62 million), and estimated assets for plans pending trusteeship ($282 million), or, $82,055 million less $12,568 million less
$62 million less $282 million = $69,143 million.

SINGLE-EMPLOYER PROGRAM

The PBGC calculated the single-employer program’s liability for benefits in the terminated plansand probable terminations, as defined in Note 2 to the financial statements, using a combination of twomethods: seriatim and nonseriatim. For 3,300 plans, representing about 90% of the total number ofsingle-employer terminated plans (47% of the total participants in single-employer terminated plans), thePBGC had sufficiently accurate data to calculate the liability separately for each participant’s benefit - theseriatim method. This was an increase of 191 plans over the 3,109 plans valued seriatim last year. For 53plans whose data were not yet fully automated, the PBGC calculated the benefits and liability seriatim asof the date of plan termination (DOPT) and brought the total amounts forward to the end of fiscal year2006.

For 320 other terminated plans, the PBGC did not have sufficiently accurate or complete data tovalue individual benefits. Instead, the Corporation used a "nonseriatim" method that brought theliabilities from the plan’s most recent actuarial valuation forward to the end of fiscal year 2006 usingcertain assumptions and adjustment factors.

For the actuarial valuation, the PBGC used a select and ultimate interest rate assumption of4.85% for the first 25 years after the valuation date and 4.82% thereafter. The mortality table used forvaluing healthy lives was the 1994 Group Annuity Mortality Static Table (with margins), set forward oneyear, projected 22 years to 2016 using Scale AA, the same as the table used in the September 30, 2005valuation. The projection period is determined as the sum of the elapsed time from the date of the table(1994) to the valuation date plus the period of time from the valuation date to the average date ofpayment of future benefits. The PBGC assumed an explicit loading for expenses in all terminated plansand single-employer probable terminations. The reserve for expenses in the 2006 valuation was assumedto be 1.18% of the liability for benefits plus additional reserves for cases whose plan assetdeterminations, participant database audits, and actuarial valuations were not yet complete. The factorsto determine the additional reserves were based on case size, number of participants, and time sincetrusteeship.

For non-pay-status participants, the PBGC used expected retirement ages, as explained insubpart B of the Allocation of Assets in Single-Employer Plans regulation. The PBGC assumed thatparticipants who had attained their expected retirement age were in pay status. In seriatim plans, forparticipants who were older than their plan’s normal retirement age, were not in pay status, and wereunlocated at the valuation date, the PBGC reduced the value of their future benefits to zero over thethree years succeeding normal retirement age to reflect the lower likelihood of payment.

MULTIEMPLOYER PROGRAM

The PBGC calculated the liability for the 10 pre-MPPAA terminations using the sameassumptions and methods applied to the single-employer program.

The PBGC based its valuation of the post-MPPAA liability for nonrecoverable future financialassistance on the most recent available actuarial reports, Form 5500 Schedule B’s, and information provided by representatives of the affected plans. The Corporation expected 85 plans to need financialassistance because severe industrial declines have left them with inadequate contribution bases and theyhad insufficient assets for current payments or were expected to run out of assets in the foreseeablefuture.

STATEMENT OF ACTUARIAL OPINION

This valuation has been prepared in accordance with generally accepted actuarial principles andpractices and, to the best of my knowledge, fairly reflects the actuarial present value of the Corporation’sliabilities for the single-employer and multiemployer plan insurance programs as of September 30, 2006.

In preparing this valuation, I have relied upon information provided to me regarding planprovisions, plan participants, plan assets, and other matters, some of which are detailed in a completeActuarial Report available from the PBGC.

In my opinion, (1) the techniques and methodology used for valuing these liabilities are generallyacceptable within the actuarial profession; (2) the assumptions used are appropriate for the purposes ofthis statement and are individually my best estimate of expected future experience discounted usingcurrent settlement rates from insurance companies; and (3) the resulting total liability represents my bestestimate of anticipated experience under these programs.

Joan M. Weiss, FSA, EA
Chief Valuation Actuary, The PBGC
Member, American Academy of Actuaries

A complete actuarial valuation report, including additional actuarial data tables, is available from The PBGC upon request.

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