The PBGC lost $3.1 billion in stock investments in its trust fund in the 11 months ended Aug. 31, House Education and Labor Committee Chairman George Miller announced today.
Mr. Miller, D-Calif., announced the loss at a hearing in San Francisco, according to the committees website. He also said the Pension Benefit Guaranty Corp. invested a significant portion of its funds in mortgage-backed securities, according to the release.
The loss is based on preliminary unaudited figures. The agency had a gain of $579 million through its fixed-income investments.
"PBGC's overall portfolio is down 1.2% from Jan. 1 through Aug. 31. That compares to a 14.3% decline in the S&P 500 over the same period," Jeffrey Speicher, PBGC spokesman, wrote in an e-mail response for comment.
As of September 2007, the latest date for which figures are available, the agency had $62.6 billion in assets.
"Investment performance is only part of PBGC's financial picture," Mr. Speicher wrote. "When the FY2008 audited financial statement is released in mid-November, PBGC's deficit is expected to be significantly lower than the 2007 figure of $14 billion, due to other factors such as increased interest rates used to calculate liabilities. We expect the new deficit figure will be about $10 billion to $12 billion."
PBGC Director Charles E.F. Millard will testify before the committee on Friday, the House Education and Labor Committee website said.
At a time when Americans anxiety about their economic future is escalating, Millard's testimony is vital to better understand the financial situation of the nations pension guarantor," Mr. Miller said in a statement on the website. Now is the time to gather all the information we need in order to rescue the economy and help workers and retirees."
The testimony invitation comes after Mr. Millard rebuffed a committee subpoena in July that demanded the agency turn over documents regarding a report into the agency's mismanagement and lax governance practices the statement said.