Monday, June 01, 2009
Tweet[IWS] GAO: PENSION BENEFIT GUARANTY CORPORATION: Financial Challenges Highlight Need for Improved Governance and Management [20 May 2009]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Pension Benefit Guaranty Corporation: Financial Challenges Highlight Need for Improved Governance and Management
GAO-09-702T, May 20, 2009
http://www.gao.gov/new.items/d09702t.pdf
[full-text, 25 pages]
What GAO Found:
Financial and economic conditions have deteriorated since we last reported
on PBGC's finances. While PBGC's deficit improved for fiscal year 2008, the
fiscal year ended just prior to the severe market downturn, and this lower
deficit may be a product of conditions that no longer exist. As a result, it is
likely that PBGC's net position looks different today. Other recent events have
also added to PBGC's financial challenges. These events include: recent
legislation that grants funding relief to certain sponsors, developments with
PBGC's investment policy, and a concern that a wide array of industry
sectors—including the automotive sector—are under financial distress and
may expose PBGC to future claims. As a result, the potential for automaker
pension plan terminations could dramatically increase not only PBGC's
deficit, but also its administrative workload.
With mounting financial challenges and the potential for PBGC's workload to
dramatically increase, our concerns about PBGC governance and strategic
management have become acute, and improvements are needed, now more
than ever. PBGC's board has limited time and resources to provide policy
direction and oversight. The three-member board includes the Secretary of
Labor, as the Chair of the Board, and the Secretaries of Commerce and
Treasury. These board members have numerous other responsibilities and are
unable to dedicate consistent and comprehensive attention to PBGC. With
only 3 members, PBGC's board may not be large enough to include the
knowledge needed to direct and oversee PBGC. In fact, the new board
members have yet to meet, and there has not been a face-to-face board
meeting in the last 15 months. In addition, without an appointed director,
PBGC's governance structure is further exposed to challenges. Further, PBGC
continues to lack a fully-adopted strategic approach to its acquisition and
human capital management needs. Although contract employees comprise
two-thirds of PBGC's workforce, PBGC's strategic planning generally does not
recognize contracting as a major aspect of PBGC activities.
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Pension Benefit Guaranty Corporation: Financial Challenges Highlight Need for Improved Governance and Management
GAO-09-702T, May 20, 2009
http://www.gao.gov/new.items/d09702t.pdf
[full-text, 25 pages]
What GAO Found:
Financial and economic conditions have deteriorated since we last reported
on PBGC's finances. While PBGC's deficit improved for fiscal year 2008, the
fiscal year ended just prior to the severe market downturn, and this lower
deficit may be a product of conditions that no longer exist. As a result, it is
likely that PBGC's net position looks different today. Other recent events have
also added to PBGC's financial challenges. These events include: recent
legislation that grants funding relief to certain sponsors, developments with
PBGC's investment policy, and a concern that a wide array of industry
sectors—including the automotive sector—are under financial distress and
may expose PBGC to future claims. As a result, the potential for automaker
pension plan terminations could dramatically increase not only PBGC's
deficit, but also its administrative workload.
With mounting financial challenges and the potential for PBGC's workload to
dramatically increase, our concerns about PBGC governance and strategic
management have become acute, and improvements are needed, now more
than ever. PBGC's board has limited time and resources to provide policy
direction and oversight. The three-member board includes the Secretary of
Labor, as the Chair of the Board, and the Secretaries of Commerce and
Treasury. These board members have numerous other responsibilities and are
unable to dedicate consistent and comprehensive attention to PBGC. With
only 3 members, PBGC's board may not be large enough to include the
knowledge needed to direct and oversee PBGC. In fact, the new board
members have yet to meet, and there has not been a face-to-face board
meeting in the last 15 months. In addition, without an appointed director,
PBGC's governance structure is further exposed to challenges. Further, PBGC
continues to lack a fully-adopted strategic approach to its acquisition and
human capital management needs. Although contract employees comprise
two-thirds of PBGC's workforce, PBGC's strategic planning generally does not
recognize contracting as a major aspect of PBGC activities.
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 3:37 PM
