WASHINGTON-The lack of big pension plan failures and higher interest rates helped the Pension Benefit Guaranty Corp. narrow its deficit to $10.7 billion in fiscal 2008.

That is a $2.4 billion improvement compared with 2007 and is more than $12.5 billion less than 2004's record $23.3 billion deficit. 2008 marks the fourth consecutive year the agency's deficit has declined.

But the good news almost certainly is nearing an end. More corporate failures are certain in the slumping economy, which likely would result in the PBGC taking over more underfunded pension plans.

In a statement, PBGC Director Charles E.F. Millard said that while the lower deficit is good news, "it is important to remember that the deficit is a snapshot of where we stood on Sept. 30."

Since the close of the PBGC's fiscal year, the equities market has taken a huge beating, reducing the value of PBGC assets in its single-employer insurance program, which was $61.6 billion on Sept. 30.

During fiscal 2008, the PBGC terminated 67 plans, down from 110 plans in 2007. Most of those losses were small, with no single plan termination even close to generating $100 million in losses.

The PBGC's most recent large loss occurred in 2006 when it took over the pension plan of Delta Air Lines Inc. pilots, which had $920 million in unfunded guaranteed benefits.

The PBGC is funded in part by premiums paid by employers with defined benefit plans. In fiscal 2008, the agency collected about $1.48 billion in premium income, down from $1.6 billion in 2007. It racked up $4 billion in investment losses in 2008 vs. $4.7 billion in investment gains in fiscal 2007.

The PBGC paid $4.3 billion in benefits to participants in terminated plans in 2008, about the same as in the previous year. In all 640,070 people were receiving benefits from the PBGC at the end of fiscal 2008, up from 631,130 in 2007.