Fiscal Year 2008 Financial Statement Highlights
· PBGC's combined financial condition improved by $2.92 billion, reducing the Corporation’s deficit from $14.07 billion as of September 30, 2007, to $11.15 billion as of September 30, 2008.
· The single-employer program’s net position improved by $2.43 billion, reducing the program’s deficit to $10.68 billion. The multiemployer program's net position improved by $482 million, reducing that program’s deficit to $473 million.
· Liability valuation interest factors increased by 135 basis points to 6.66% at September 30, 2008, from 5.31% at September 30, 2007. This increase in PBGC’s interest factors resulted in a
reduction to actuarial charges, due to change in interest rates, of $7.56 billion that more than offsets the actuarial charges for passage of time of $3.40 billion. The FY 2008 favorable impact due to changes in interest rates was strongly influenced by the unprecedented increase in highly rated long-term corporate bond yields that occurred as a result of credit market volatility at year-end. This caused a significant drop in PBGC’s Present Value of Future Benefits (PVFB) at September 30, 2008, but could easily reverse itself in the future if interest factors decline.
· During FY 2008, 67 underfunded single-employer plans were terminated. As a consequence of PBGC’s previous efforts to thoroughly evaluate its exposure to probable terminations, $148 million of the net claims for these plans had already been reflected in PBGC’s results as of the end of 2007. The 67 plans had an average funded ratio of approximately 59% and resulted in an aggregate net loss to PBGC of $271 million (see Note 11).
· No new large plans were classified as probable terminations in 2008 although twenty smaller plans were added as new probable terminations with underfunding of $233 million. Probable terminations represent PBGC’s best estimate of claims for plans that are likely to terminate in a future year.
· At year-end, PBGC’s estimate of its exposure from underfunding by plan sponsors whose credit ratings were below investment grade or who met one or more financial distress criteria totaled approximately $47 billion, down from $66 billion in 2007. PBGC classifies these sponsors’ underfunded plans as reasonably possible terminations (see Note 8 and Note 16).
(Dollars in millions) |
2008 |
2007 |
||||||
|
|
|
|
|||||
SINGLE-EMPLOYER AND MULTIEMPLOYER PROGRAMS COMBINED |
||||||||
---|---|---|---|---|---|---|---|---|
Summary of Operations |
|
|
|
|
||||
$ |
1,492 |
$ |
1,557 |
|||||
Losses (Credits) from Completed and Probable |
|
|
|
|
||||
Terminations |
$ |
(826) |
$ |
399 |
||||
Investment Income (Loss) |
$ |
(4,043) |
$ |
4,760 |
||||
Actuarial Charges (Credits) and Adjustments |
$ |
(4,814) |
$ |
346 |
||||
|
|
|
|
|
||||
Insurance Activity |
|
|
|
|
||||
Benefits Paid |
$ |
4,292 |
$ |
4,266 |
||||
Retirees |
|
640,240 |
|
631,330 |
||||
Total Participants Receiving or Owed Benefits |
|
1,274,000 |
|
1,305,000 |
||||
New Underfunded Terminations |
|
67 |
|
110 |
||||
Terminated/Trusteed Plans (Cumulative) |
|
3,860 |
|
3,793 |
||||
|
|
|
|
|
||||
Financial Position |
|
|
|
|
||||
SINGLE-EMPLOYER AND MULTIEMPLOYER PROGRAMS COMBINED |
|
|
|
|
||||
Total Assets |
$ |
62,975 |
$ |
68,438 |
||||
Total Liabilities |
$ |
74,126 |
$ |
82,504 |
||||
Net Income |
$ |
2,915 |
$ |
4,815 |
||||
Net Position |
$ |
(11,151) |
$ |
(14,066) |
||||
|
|
|
|
|
||||
SINGLE-EMPLOYER PROGRAM |
|
|
|
|
||||
Total Assets |
$ |
61,648 |
$ |
67,241 |
||||
Total Liabilities |
$ |
72,326 |
$ |
80,352 |
||||
Net Income |
$ |
2,433 |
$ |
5,031 |
||||
Net Position |
$ |
(10,678) |
$ |
(13,111) |
||||
|
|
|
|
|
||||
MULTIEMPLOYER PROGRAM |
|
|
|
|
||||
Total Assets |
$ |
1,327 |
$ |
1,197 |
||||
Total Liabilities |
$ |
1,800 |
$ |
2,152 |
||||
Net Income (Loss) |
$ |
482 |
$ |
(216) |
||||
Net Position |
$ |
(473) |
$ |
(955) |
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