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Because defined benefit plans generally are so well-funded, the volatility in the stock market last week was expected to have little impact on the pension plans.

The long-running bull market has left most defined benefit plans with a comfortable surplus. Indeed, as of the end of 1997, pension plans sponsored by major industrial companies were on average 111% funded, up from 108% at the end of 1996, while plans sponsored by large service companies were 114% funded, up from 113%, according to benefit consultant Watson Wyatt Worldwide.

Even if stock market values do fall sharply and the U.S. economy heads into a recession, the Pension Benefit Guaranty Corp. is in its best-ever financial shape to assume the liabilities of plans terminated by companies that cannot meet their obligations.

The PBGC, funded by premiums paid by employers with defined benefit plans, enjoyed a surplus of $3.5 billion in 1997 in its single-employer insurance program, up from an $869 million surplus in 1996 and a $1.9 billion deficit in 1990.