The Pension Benefit Guaranty Corporation's (PBGC) single-employer insurance program is a federal program that insures certain benefits of the more than 34 million worker, retiree, and separated vested participants of over 29,000 private sector defined benefit pension plans. In 2003, we placed PBGC's single-employer insurance program on our high-risk list of agencies and programs that need broad-based transformations to address major challenges because of our concerns about the program's long-term viability. In recent years, because of unfavorable economic conditions and the collapse of large underfunded pension plans sponsored by well-known firms like Bethlehem Steel, U.S. Airways, and United Airlines, the program's financial condition has worsened significantly. From a $9.7 billion surplus at the end of fiscal year 2000, the program reported a $23.3 billion deficit as of September 2004, including a $12.1 billion loss for fiscal year 2004. While 73 percent ($16.9 billion) of this deficit is due to PBGC's estimated liability for its probable claims (claims from plans that PBGC deems likely to terminate in the future), historically over 95 percent of claims so classified by the PBGC have subsequently terminated and become direct obligations of the agency. We are providing answers to several Congressional questions about single-employer probable claims regarding (1) PBGC's methodology for determining single-employer probable claims, (2) PBGC's efforts to monitor probable claims, and (3) PBGC's practices for disclosing financial information about these claims.
Skip to Highlights