ACTUARIAL VALUATION REPORT - 2004 FISCAL YEAR

ACTUARIAL VALUATION REPORT - 2004 FISCAL YEAR

The 2004 Annual Report of the Pension Benefit Guaranty Corporation (PBGC) contains a summary of the results of the September 30, 2004 actuarial valuation. The purpose of this separate Actuarial Valuation Report is to provide greater detail concerning the valuation of future benefits than is presented in PBGC's Annual Report.

Overview

PBGC calculated and validated the present value of future benefits (PVFB) for both the single-employer and multiemployer programs and of nonrecoverable financial assistance under the multiemployer program. These calculations reflect the present value of claims as of the date of the financial statements. They present a snapshot of the liabilities as of a point in time and do not include liability projections over the period subsequent to the date of the financial statements.

For the single-employer program, the liability as of September 30, 2004 consisted of:

$44.95 billion for the 3,469 plans that have terminated; and
$30.95 billion for the 45 probable terminations.

Liabilities for "probable terminations" reflected reasonable estimates of the losses for plans that are likely to terminate in a future year. These estimated losses were based on conditions that existed as of PBGC's fiscal year-end. Management believes it is likely that one or more events subsequent to PBGC's fiscal year-end will occur, confirming the fact of the loss. In addition, the liability for reasonably possible terminations has been calculated and is discussed in Note 7 to the financial statements on pages 33-34 of PBGC's 2004 Annual Report. A discussion of PBGC's potential claims and net financial condition over the next ten years is presented on pages 11-12 of that report.

For the multiemployer program, the liability as of September 30, 2004 consisted of:

$3 million for 10 pension plans that terminated before the passage of the Multiemployer Pension Plan Amendments Act (MPPAA) and of which PBGC is trustee; and
$1,295 million for probable and estimable post-MPPAA losses due to financial assistance to 67 multiemployer pension plans that were, or were expected to become, insolvent.

The results of the valuation (the present value of future benefits and nonrecoverable financial assistance) are presented in Table 1 and are displayed in the graphs on pages 7 and 8.

Table - Present Value of Future Benefits and Nonrecoverable Financial Assistance - 2004

Back to Actuarial Report Index | PDF version of PBGC's 2004 Actuarial Report as printed | Back to WWW.PBGC.GOV