The single-employer program suffered significant losses from completed and probable plan terminations and interest rate changes that drove its deficit to a record high of $11.2 billion. The net loss for the year totaled $7.6 billion, down from the $11.4 billion recorded in 2002. At the same time, the program’s total assets of $34.0 billion assure the Corporation’s ability to meet its obligations for a number of years.
PBGC absorbed the largest single plan (95,000 participants) and largest loss from one company in its history (about $3.6 billion) with its trusteeship of the Bethlehem Steel pension plan. PBGC continues to face significant exposure from troubled companies with underfunded pension plans, especially in the air transportation and steel sectors, the termination of which could produce substantial additional losses.
PBGC paid nearly $2.5 billion in benefits during the year, a new record for annual benefit payments that exceeded the previous record amount (paid in 2002) by almost $1 billion.
In 2003, PBGC became trustee of 152 terminated single-employer plans covering about 206,000 people, up from 144 plans and 187,000 participants in 2002. This was the largest one-year increase in the total number of people owed guaranteed benefits by the Corporation. A total of 155 underfunded plans terminated during the year.
At year-end, PBGC was responsible for the pensions of more than 930,000 people—more than 459,000 who are currently receiving benefits, another 375,000 who will begin to receive benefits when they retire in the future, and 100,000 who are receiving or will receive benefits due to PBGC’s financial assistance to multiemployer plans. Despite dramatic growth in its workload, the Corporation further reduced the average time needed to issue final benefit determinations, significantly exceeding its annual performance target.
The multiemployer program reported a year-end deficit of $261 million, its first deficit in more than 20 years and largest deficit ever, primarily because PBGC recorded substantial additional probable losses from expected nonrecoverable future financial assistance.
PBGC advanced its electronic government initiatives with tests of its first online selfservice centers and first fully electronic business transactions. PBGC expects to implement its initial production versions of both during 2004.
PBGC recorded investment income of $3.4 billion in 2003 as the relative performance of equity and fixed-income investments was reversed from 2002. PBGC’s total return on investments was a positive 10.3% in 2003 compared to 2.1% in 2002.
PBGC’s annual performance report (pp. 12-16) describes gains in both productivity and customer satisfaction.
Table - Financial and Operational
Highlights
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