PBGC Reports Stronger Financial Condition, Improved Customer Service
FOR IMMEDIATE RELEASE
March 29, 2000
The Pension Benefit Guaranty Corporation (PBGC) today released its 1999 Annual Report, citing an improved net financial position for the insurance program and significant advances in service to customers.
PBGC attributed its financial improvement to increased earnings from equity investments, low losses from plan terminations, and lower liabilities for benefits due to an increase in interest rates. As of September 30, 1999, PBGC's single-employer program had assets of $18.4 billion and liabilities of $11.4 billion, resulting in a positive net position of $7 billion. This program covers nearly 34 million people.
Secretary of Labor Alexis M. Herman, Chairman of PBGC's Board of Directors, said, "The millions of Americans whose pension benefits are backed up by PBGC can be assured that there is a strong PBGC protecting their retirement security."
The insurance program recorded its fourth yearend surplus after more than 20 consecutive years of deficits that reached $2.9 billion in 1993. Because the program remains vulnerable to long-term risks, the surplus will provide a cushion against future losses.
"PBGC's guarantee makes a real difference in people's lives. Although our financial condition is strong today, we must always remain vigilant. Also important, we want customers to be delighted with the quality of our service. We listen carefully to their views on what works and what needs improvement, so we can meet their needs and expectations in the future," said PBGC Executive Director David M. Strauss.
Through focus groups, surveys, and meetings, PBGC maintains a continuing dialogue with its customers. Guided by these findings, teams of PBGC employees have developed many service improvements. For 1999, these included simplified benefit applications, earlier communication with participants in PBGC-trusteed plans, benefit and premium letters in plain language, a customer service center and toll-free telephone number for plan sponsors and pension professionals, a later premium filing date, and faster processing of requests for premium refunds and waivers of premium penalties.
The agency's separate insurance program for multiemployer plans, in surplus since 1982, remained financially strong with a positive net position of $199 million despite losses from investments and financial assistance. The multiemployer program has assets of $692 million and liabilities of $493 million and covers about 8.8 million people in 1,800 plans.>
PBGC paid $902 million in benefits to 214,890 people during 1999. The agency is responsible for the pensions of about 532,000 people, including those who will retire in the future, and 2,785 terminated pension plans.
Total investment income exceeded $670 million due to strong returns from equity investments. Premium income declined by $64 million as variable-rate premium payments fell for the third year in a row.
The Annual Report also includes the annual performance report required by the Government Performance and Results Act. The report details PBGC's progress in meeting the performance goals set under the agency's five-year strategic plan.
PBGC's financial statements received an unqualified audit opinion for the seventh consecutive year. The audit was performed by PricewaterhouseCoopers LLP under the direction and oversight of PBGC's Inspector General.
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 43 million American workers and retirees participating in private-sector defined benefit pension plans. PBGC insures nearly 40,000 pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns.
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PBGC No. 00-20