• The single-employer program's financial condition improved by $4.6 billion, due largely to credits for previously recorded probable losses that reflected the airline relief provisions in the Pension Protection Act of 2007.  These credits, combined with premium and investment income, more than offset losses due to actuarial charges, leaving the program with a deficit of $18.1 billion. As noted, later, in the chapter on the PBGC’s single-employer program exposure, the reductions in airline industry probable claims were reclassified as reasonably possible losses and, as such, remain potential claims against the insurance program that may be expected to grow over time.

  o      The multiemployer program reported a net loss of $404 million and a year-end deficit of $739 million, largely due to an increased provision for probable losses from expected future financial assistance to troubled plans.

  o      The PBGC=s future exposure to new probable terminations declined from the 2005 estimate of $108 billion.  The 2007 estimate is approximately $73 billion in underfunding exposure classified as reasonably possible that is attributable to plan sponsors whose credit ratings are below investment grade or who meet one or more of the financial distress criteria.  This exposure declined primarily due to a net reduction in the unfunded vested benefit liabilities of the plans whose sponsors remained at risk, largely as the result of improved economic conditions.

  o      The PBGC received its 14th consecutive unqualified audit opinion on its financial statements, which were released to the public 45 days after the end of the fiscal year.

  o      The PBGC continued to provide high quality service to its customers.  It paid nearly $4.1 billion in benefits to nearly 612,000 people and issued 152,000 final benefit determinations.

  o      At year-end, the PBGC was responsible for the pensions of about 1.3 million people.  In addition to the 612,000 people already receiving benefits, these include 549,000 people who will begin to receive benefits from the PBGC when they retire in the future and 110,000 who are receiving or will receive benefits through the PBGC=s financial assistance to multiemployer plans.

  o      PBGC actions in the courts and in settlement negotiations resulted in financial recoveries—including the largest in PBGC history—that protected plan participants and the insurance program from billions of dollars in unnecessary losses.

  
  

  o      The PBGC continued to enhance and expand electronic services for its customers through its separate Internet sites for plan participants and plan administrators.

Table - Highlights

Perspectives on the Year

The single-employer program's deficit improved due largely to credits for previously recorded probable losses that reflected the airline relief provisions in the Pension Protection Act of 2007.

The multiemployer program recorded an additional loss for the year due to additional probable losses for expected future financial assistance, worsening the program's deficit.

The PBGC assumed responsibility for the benefits of 46,000 new participants during the year, a sharp decline compared to the record numbers of participants taken in by the PBGC in the previous five years. Total participants owed benefits remained at about 1.3 million.

Both the number of PBGC-insured plans and the number of covered participants continued to slowly decline. Total participants now number slightly less than 44 million.

Section 508 Tags for Annual Report PDF

p. 3.  Net Position, Single-Employer Program, 1997-2007
 This line graph illustrates the change in the net position of the single-employer program between 1997 and 2007, beginning with a surplus of nearly $3.5 billion in 1997 and ending with the deficit of $18.1 billion reported for 2007.  The program’s surplus rose to a peak of $9.7 billion in 2000 before sharply declining to a deficit that reached a peak of $22.8 billion in 2004.  The deficit has been gradually improving since 2004.

p. 3.  Net Position, Multiemployer Program, 1997-2007

 This line graph illustrates the change in the net position of the multiemployer program between 1997 and 2007, beginning with a surplus of $219 million in 1997 and ending with the deficit of $739 million reported for 2007.  The program’s surplus reached a peak of $341 million in 1998 before gradually declining to a deficit that has worsened almost steadily since 2003.

p. 3.  Participants in Trusteed Plans, 1997-2007

 This combined line and bar graph illustrates the fluctuations in the annual number of participants in newly trusteed plans and the rising total number of participants owed benefits under the pension insurance program.  New participants have fluctuated widely;  in the period from 1997 to 2000, the number varied between 50,500 new participants in 1997 and 27,100 in 2000.  From 2001 to 2005, the number generally rose, reaching a peak of 269,000 new participants in 2005. In 2007, the number fell sharply to 45,769.  During the period from 1997 through 2007, however, the total number of participants owed benefits generally rose, from 465,000 in 1997 to a peak of 1,296,000 in 2005, with a slight decline to 1,271,000 in 2007.

p. 3.  PBGC-Insured Plans and Participants, 1986-2007

 This combined line and bar graph illustrates the changes in the numbers of PBGC-insured plans and covered participants during the period from 1986 through 2007.  The number of covered participants generally rose from a total of 38.2 million in 1986 to a peak of 44.4 million in 2004, when it began to decline, falling 43.958 million in 2007.  During the same period, however, the number of insured plans fell continuously and relatively steadily, from a high of 114,097 plans in 1986 to 30,328 insured plans in 2007.

p. 7.  Distribution of PBGC's Potential 2016 Financial Position

This graph illustrates the distribution of possible financial outcomes for PBGC for the 10-year period ending in September 2016, based on 5,000 simulations conducted with PBGC's stochastic modeling system, the Pension Insurance Modeling System (PIMS).  As shown by the graph, PIMS projects a median outcome of a $15.4 billion deficit in 2016 and a mean outcome of a $17.6 billion deficit.  The standard deviation is $18.4 billion.  There is a 5 percent chance of a deficit of  $50.7 billion or more, a 10 percent chance of a deficit of $39.0 billion or more, a 25 percent chance of a deficit of $26.1 billion or more, a 25 percent chance of a deficit of $6.4 billion or less, a 10 percent chance of a surplus of $2.4 billion or more, and a 5 percent chance of a surplus of $8.2 billion or more.  There is a 13 percent chance that there will be a surplus of any amount in 2016.

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