ANNUAL PERFORMANCE REPORT
PBGC’s current five-year strategic plan has four broad goals that form the framework of the Corporation’s short- and long-term plans. The PBGC goals are to:
protect existing defined benefit plans and their participants;
provide high quality, responsive services and accurate and timely payment of benefits to participants;
strengthen financial programs and systems to keep the pension insurance system solvent; and
improve internal management support operations.
PBGC’s performance measures track specific results that are significant to its customers and gauge PBGC’s solvency and customer service accomplishments. For 2003 PBGC added measures for benefit accuracy and monitoring ongoing pension plans. PBGC also dropped two measures where it had effectively reached the upper limit of performance: for premium collection (99 percent in 2002) and the age of pre-trusteeship inventory (an average age of well below one year in 2002).
PBGC is in the process of revising its strategic plan for fiscal years 2004-2008. That new plan will reflect two revised strategic goals and new performance measures focused on customer satisfaction, underfunding of insured pension plans and PBGC’s cost-effectiveness.
PBGC’s strategic plan may be found on PBGC’s Web site at www.pbgc.gov/about/stratplan.htm. The following table shows the results achieved in 2003 and meets the annual reporting requirement of the Government Performance and Results Act.
Table - 2003 PBGC Corporate Performance Measures
Achieving Performance Targets
Protecting the Interests of Defined Benefit Plan Participants, Thereby Encouraging New Plans:
When a company sponsoring a defined benefit plan files for bankruptcy, PBGC becomes the advocate for the interests of the plan’s participants and the pension insurance system. In 2003, PBGC fulfilled this advocacy role in 172 cases involving 676,899 participants.
PBGC protects participant interests by monitoring companies sponsoring underfunded defined benefit plans and reviewing their corporate transactions for impact on their plan participants and the pension insurance system. In 2003, PBGC monitored 902 controlled groups involving 2,917 plans.
Customer Satisfaction:
The American Customer Satisfaction Index is the national indicator of customer satisfaction. One hundred seventy private sector companies and fifty federal agencies participate in the index, which is produced by a partnership between the University of Michigan Business School, the American Society for Quality, and the CFI Group. PBGC’s 2003 index for participants in trusteed plans was 77, three points higher than the target of 74, and almost seven points higher than the federal government average of 70.2. The results identify causes and effects of satisfaction, and focus PBGC’s efforts to improve three activities: customer care, concern resolution and written communications.
PBGC’s 2003 ACSI index for pension practitioners was 69, the same as in 2002. While one point below the 2003 combined index of all federal agencies, it was well above the indices for comparable federal collection programs.
Operations:
PBGC reviewed the benefit determinations issued in 2003 to verify the accuracy of its benefit calculations and issued a Statement of Reasonable Assurance of Accuracy based on the results of that review, thus meeting the goal for the year. This statement is management’s confirmation that PBGC has consistently and properly applied plan formulas and actuarial factors using the best information available at the time of the calculation.
The principal measure of operations is the average time frame needed to send benefit determinations to participants in defined benefit pension plans taken over by PBGC. PBGC’s goal has been to reduce the average time frame needed to 3 years. Efforts to speed up processing have succeeded. Plans with nearly 400,000 participants were trusteed by PBGC in 2002 and 2003, compared to the 100,000 anticipated in PBGC’s original projections. In spite of this significant increase in workload, in 2003 PBGC reduced the average time it takes to get benefit determinations to participants to 2.2 years, significantly exceeding the target.
During 2003 PBGC made trusteeship decisions within one year of opening the case for non-bankruptcy reportable events 92 percent of the time.
Of eligible participants who completed benefit applications, 97 percent received pension payments from PBGC within three months, achieving the annual target and exceeding last year’s result by two percentage points.
In 2003, PBGC located 7,729 missing participants, some of whom might otherwise lose pension benefits they earned.
Financial Management:
Timeliness of PBGC’s response to requests for premium refunds, waiver of penalties and reconsideration of premium decisions is a measure important to the practitioner community. The Corporation’s target is ninety days from receipt to completion of the request. In 2003 PBGC met its target 82 percent of the time. This figure fell short of the 85 percent milestone set for the year but improved dramatically over the 41 percent result achieved in 2002.
Investment management results are measured against recognized industry indices aggregated over a five-year period. PBGC realized investment returns in 2003 that were comparable to its industry indices. Returns on fixed-income securities, which represent 54 percent of the Corporation’s portfolio, equaled the benchmark while equities slightly exceeded their index.
Program Evaluation
PBGC annually evaluates the satisfaction of participants in plans trusteed by PBGC and of pension practitioners who have dealings with us on premium payment or standard termination matters. The American Customer Satisfaction Index provides the evaluations and a means to compare PBGC’s results with those of other government and private organizations. Evaluation of the survey responses enables PBGC to continually improve its program operations.
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