Pension Benefit Guaranty Corporation: Improvements Needed to Strengthen Governance Structure and Strategic Management

The U.S. Government Accountability Office (GAO) is an independent agency that works for Congress. The GAO watches over Congress, and investigates how the federal government spends taxpayers dollars. The Comptroller General of the United States is the leader of the GAO, and is appointed to a 15-year term by the U.S. President. The GAO wants to support Congress, while at the same time doing right by the citizens of the United States. They audit, investigate, perform analyses, issue legal decisions and report anything that the government is doing. This is one of their reports.

The Pension Benefit Guaranty Corp. (PBGC) insures the retirement future of nearly 44 million people in more than 30,000 private-sector defined benefit pension plans. In July 2003, PBGC¿s single-employer pension insurance program was designated as ¿high risk,¿ meaning that it needed urgent attention and transformation. The program remains on the list today with a projected financial deficit of over $13 billion, as of Sept. 2007. Because Congress exercises oversight of PBGC, the author was asked to testify on: (1) the critical role PBGC plays in protecting the pension benefits of workers and how PBGC is funded; (2) the financial challenges facing PBGC; and (3) the PBGC¿s governance, oversight and management challenges. Tables.

The Pension Benefit Guaranty Corp. (PBGC) insures the pension benefits of 44 million private sector workers and retirees in over 30,000 employer-sponsored pension plans. It was reported that PBGC¿s governance structure needed improvements. Congress is considering expanding the board of dir. to include additional members. It was also recommended that the board develop policies and mechanisms consistent with corp. governance practices, and develop formal guidelines to clarify the roles and respon. of the board chair, members, and their rep. This report addresses: the steps PBGC has taken to improve policy direction and oversight; and (2) how Congress applies oversight to PBGC and what other oversight mechanisms exist for gov¿t. corps. Illus.

Pension Benefit Guaranty Corporation : financial challenges highlight need for improved governance and management : testimony before the Special Committee on Aging, U.S. Senate

"Pension Benefit GuarantyCorporation (PBGC) insures thepension benefits of more than 44million U.S. workers and retirees inmore than 27,500 private definedbenefit plans. In response to growingworkloads over the last 20 years,PBGC has come to rely heavily oncontractors to perform its work. Withthe influx of plan terminations duringthe recent economic downturn, GAOwas asked to examine: (1) how PBGCdecides between contracting forservices and performing services inhouse; (2) the steps PBGC has takento strengthen its internal controlsover the contracting process; and (3)PBGC's implementation of aperformance-based approach in itsrecent contracts.To conduct this study, GAO reviewedfederal and PBGC contractingpolicies; interviewed PBGC officialsand selected contractors; examined asmall judgmental sample of eightrecent contracts selected based ontype, amount, and location; andassessed PBGC's actions in responseto past GAO and PBGC InspectorGeneral (IG) recommendations."