Pension agency’s deficit shrinks
WASHINGTON — The federal agency that insures private pension plans for millions of Americans logged a deficit of $18.1 billion this year, a big improvement from last year as a new law helped put the agency on better financial footing.
The narrower deficit for the 2006 fiscal year reported by the Pension Benefit Guaranty Corp. on Wednesday was down from a shortfall of $22.8 billion recorded in 2005 and a record $23.3 billion posted in 2004.
The agency’s “financial condition appears to have stabilized for the time being,” said Vince Snowbarger, interim director of the agency, which insures pensions for 44 million workers and retirees.
The agency disclosed in its annual financial report that as of Sept. 30 it had assets of $60 billion to cover liabilities of $78.1 billion.
The agency mainly attributed the shrinking deficit to a provision in the new pension law that carves out special treatment for the airline industry, giving airlines that are in Bankruptcy Court and have frozen their pension plans extra time for their pension plans to become financially whole.
The agency said this led to a sharp reduction in the amount of probable liabilities reflected on the agency’s balance sheet.
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