Improving the Stability of PBGC

• The Pension Benefit Guaranty Corporation (PBGC) faces financial challenges. The agency's combined single–employer and multi–employer pension programs registered a negative net accumulated position of $21.9 billion in end-of-FY2009, an increase in the deficit of $10.8 billion over the prior year.
  
  Highlights of GAO-08-1162T (PDF)

Figure: PBGC Net Financial Position, Combined Insurance Programs

Note: Net position equals program assets less the current value of future benefit obligations for terminated plans and those deemed likely to default. Values are as of the end of fiscal year.

• PBGC’s governance structure of PBGC could be made more effective. The Secretaries of Labor, Commerce, and the Treasury, who constitute the board of directors, have limited time and resources to provide policy direction and oversight to PBGC that is consistent with corporate governance standards.
  
  Highlights of GAO-07-808 (PDF)

^ Back to topWhat Needs to Be Done

• To better prepare for and manage the calculation of benefit amounts and communications with participants in cases involving large, complex plans, PBGC should set goals for timeliness and monitor the progress made in finalizing benefit determinations for these plans separately from other plans; prioritize the calculation of estimated benefits for retirees subject to the guarantee limits, and adjust estimates, as needed, throughout the benefit determination process; prioritize the processing of appeals for those already receiving benefits; develop improved procedures for adapting and reviewing letters to participants; and provide information to help participants better understand their benefit calculations.
  
  Highlights of GAO-09-716 (PDF)
• Congress may need to carefully monitor the financial health of PBGC’s programs, and of defined benefit plans generally, and may need to take additional action to safeguard the private pension system’s role in national retirement security.  In the longer term, PBGC may remain at risk from a weak premium rate structure that does not adequately reflect its exposure to losses and from funding rules that have not yet facilitated the accumulation of sufficient plan reserves.
  
  Highlights of GAO-09-271 (PDF)
• PBGC should provide for all legal functions to be overseen by a single chief legal officer with full authority to delineate the duties of each legal office and a direct reporting relationship to the Director.
  
  Full Reports of GAO-07-757R (PDF, 14 pages)
• To strengthen PBGC’s policy direction and oversight, Congress should consider expanding PBGC’s board of directors. In addition, the board should take steps to ensure greater accountability for the full implementation of the board’s new investment policy decisions and for appropriate oversight of an investment policy that carries more risk.
  
  Highlights of GAO-07-808 (PDF), Highlights of GAO-08-667 (PDF)
• PBGC should take steps to improve its contract management as it implements a performance-based approach to contracting; revise its human capital strategic plan to reflect the importance of contracting and its use of contractors; and better link staffing and contracting decisions at the corporate level.
  
  
  Highlights of GAO-08-871 (PDF), Highlights of GAO-08-624 (PDF)

^ Back to topKey Reports

Pension Benefit Guaranty Corporation

Pension Benefit Guaranty Corporation

Pension Benefit Guaranty Corporation

PBGC Assets

Pension Benefit Guaranty Corporation

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