Premium Accounting System:

Pension Benefit Guaranty Corporation System Must Be an Ongoing Priority

IMTEC-92-74: Published: Aug 11, 1992. Publicly Released: Aug 11, 1992.

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Joel C. Willemssen
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Pursuant to a congressional request, GAO provided information on the Pension Benefit Guaranty Corporation's (PBGC) modifications to the automated premium accounting system and procurement of a replacement system.

GAO found that: (1) the PBGC premium computerized accounting system has undergone a two-phase modification and restoration, and the first phase has restored partial system function, but the second phase remains incomplete; (2) lack of sufficient oversight, management, technical expertise, and institutional knowledge has resulted in delays; (3) the system posts total payments, makes refunds, and issues past-due filing notices and statements of account prior to 1987; (4) the system lacks adequate documentation, uses outdated technology, incorporates design and construction inflexibility, and cannot identify variable rates payment or generate statements of accounts for after 1987; (5) modification estimates for the system involve adding or altering 23,000 lines of system code, requiring six staff members; and (6) new system requirements must include flexible and accurate recording of premium operations, correspondence generation, and the ability to respond to legislative changes.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: PBGC has dedicated a senior-level manager to develop a new premium accounting system and has hired a contractor, Wang Federal, to perform the day-to-day operations and maintenance of the system. PBGC implemented a new Premium Accounting System (PAS) in about October 1995. The Inspector General is reviewing PAS internal controls.

    Recommendation: To ensure the long-term success of the premium accounting system, the Executive Director, PBGC, should establish a permanent management structure, with senior-level technical staff responsible for the day-to-day operation and maintenance of the system.

    Agency Affected: Pension Benefit Guaranty Corporation


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