[Response to Request for Advance Decision Concerning PBGC Use of Contingent Fee Arrangement With Outside Counsel]

The Pension Benefit Guaranty Corporation (PBGC) requested a decision on whether it was authorized to enter into a contingent-fee arrangement with an outside counsel for litigation against companies that terminated employee pension plans. GAO held that, when PBGC served as a trustee for a terminated plan: (1) it was serving the interest of the plan's participants in the same manner and to the same degree as a nongovernmental party appointed to the same position; (2) it was not bound by laws applicable to federal agencies when contracting for investment management services for trust funds; and (3) its reasonable expenses in administering, preserving, or otherwise managing the plan were properly chargeable to trust assets. Accordingly, PGBC was not precluded from contracting for the services on a contingent basis.