US - The Pension Benefit Guaranty Corporation (PBGC) has reported a deficit of US$13.1bn in fiscal year 2007, according to the agency's annual management report submitted to Congress.
The insurance program for single-employer pension plans said the deficit represented a $5bn improvement over last year's $18.1bn shortfall. As of 30 September, it reported assets of $67.2bn and liabilities of $80.4bn.
Charles Millard, interim director of the PBGC, said a robust economy, strong investment returns and higher valuation interest factors had combined to reduce PBGC's current deficit.
“Much of the change in PBGC's stated deficit is due to the fact that no large plans failed this year and that higher valuation interest factors resulted in a lower calculation of the corporation's liabilities,” said Millard.
Over the longer term, the PBGC said it needed to exercise prudent stewardship of its assets, and would continue to seek a more complete array of financial tools, such as a premium-setting authority, in order to meet its obligations.
The PBGC had an investment income of $4.7bn and a $2.8bn actuarial credit as a result of higher valuation interest factors. Total return on invested funds was 7.2%.
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