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WASHINGTONThe Pension Benefit Guaranty Corp. reported an improvement in its financial position for its 2006 fiscal year, with the agency's deficit narrowing to $18.1 billion from $22.8 billion a year ago.
Much of the $4.7 billion improvement at the PBGC's insurance program for single-employer pension plans stemmed from airline industry pension funding relief in the recently enacted Pension Protection Act, which resulted in "a sharp reduction in the amount of 'probable' liabilities reflected on the agency's balance sheet," the PBGC said in a statement.
That law, which President Bush signed in August, gives commercial airlines whose plans are severely underfunded more time to fund their plans, making it less likely that the airlines will terminate their plans and shift the liabilities to the PBGC.
As of Sept. 30, the agency reported assets of $60 billion and liabilities of $78.1 billion. In addition, the PBGC noted that its potential exposure to losses from pension plans sponsored by financially weak employers decreased to $73 billion from $108 billion in 2005.
In its statement, the PBGC attributed that improvement in part to higher interest rates, better credit ratings and improved plan funding at some employers.
"The PBGC's financial condition appears to have stabilized for the time being," PBGC Interim Director Vince Snowbarger said in the statement.
"Our current assets can cover pension payments coming due for a number of years into the future, and our exposure to additional losses has declined," he said.