The PBGC had total assets of $68.4 billion at the end of the previous fiscal year, according to written testimony Millard submitted.
He told the House Education and Labor Committee in Washington that he estimated the PBGC's deficit would decline to $10 billion to $12 billion at the end of fiscal 2008, down from the $14 billion deficit of a year earlier.
Rep. George Miller, D-California, the committee's chairman, called the hearing over concern that a new Pension Benefit Guaranty Corp. investment policy adopted in February could lead to additional investment losses for the agency. But Millard said the fiscal 2008 losses had resulted from the more conservative agency investment policy that was previously in place.
Under the new policy, 45 percent of the agency's $55 billion in investible assets will be in equities, 45 percent in fixed income and 10 percent in alternatives, including private equity and real estate. Previously, 75 to 85 percent of assets were in a liability-driven investment strategy, with the remainder in stocks.
"We have not made the shift yet, even though we are preparing to do so," Millard testified. "The PBGC is actually sounder today than it was 12 months ago."
Millard also said he couldn't guarantee that the new investment policy would be successful, only that it would improve the prospects that the agency would be able to eliminate its budget deficit over time.
Miller vowed continued scrutiny of the agency's implementation of the new policy. "I'm not sold on it at this point," he said.
After the hearing, a committee news release said the Pension Benefit Guaranty Corp. had lost $4.8 billion in equities during fiscal 2008, including a $1.7 billion loss in September alone. A PBGC spokesman said the losses in stocks were partially offset by gains in the PBGC's fixed-income portfolio.