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About PBGC

PBGC Board of Directors Meeting

February 11, 2014

Department of Labor
Thomas E. Perez, Secretary of Labor and Chair of the PBGC Board of Directors
Phyllis C. Borzi, Assistant Secretary of Labor, Employee Benefits Security Administration
Judy Mares, Deputy Assistant Secretary of Labor, Employee Benefits Security Administration
Hilary Duke, Division Chief, Office of Policy and Research, Employee Benefits Security Administration
Nicole Swift, Employee Benefits Law Specialist, Employee Benefits Security Administration

Department of the Treasury
Jacob J. Lew, Secretary of the Treasury
Patricia Kao, Acting Director, Office of Financial Institutions Policy
Philip Quinn, Senior Policy Analyst, Office of Financial Institutions Policy
Sam Valverde, Senior Advisor
Kim Egert, Policy Advisor
Liz Hipple, Policy Advisor

Department of Commerce
Penny Pritzker, Secretary of Commerce
Mark Doms, Under Secretary for Economic Affairs
Rick Lattimer, Policy Analyst, Economics and Statistics Administration

Joshua Gotbaum, Director
Ann Orr, Chief of Staff
Judith Starr, General Counsel and Secretary to the Board
Patricia Kelly, Chief Financial Officer
Sanford Rich, Chief of Negotiations and Restructuring
Philip Langham, Director, Benefits Administration and Payment Department
Barry West, Chief Information Officer
Michael Rae, Deputy Chief of Negotiations and Restructuring

PBGC Office of Inspector General
Deborah Stover-Springer, Deputy Inspector General
Rashmi Bartlett, Assistant Inspector General for Audit
Patrick Byer, Partner, CliftonLarsonAllen (PBGC Audit Firm)
George Fallon, Partner, CliftonLarsonAllen (PBGC Audit Firm)
Marlon Perry, Senior Manager, CliftonLarsonAllen (PBGC Audit Firm)

PBGC Participant and Plan Sponsor Advocate
Constance Donovan


 The Chair called the meeting to order at 1:49 p.m., welcomed the attendees, and recognized PBGC's new Participant and Plan Sponsor Advocate, Constance Donovan. The meeting then proceeded in accordance with the established agenda.

Director Gotbaum reported on improvements made in PBGC's personnel, processes and systems, noting its recent American Customer Satisfaction Index (ACSI) score of 79, at the threshold of the ACSI excellence standard of 80. He addressed legislative developments, trends of concern affecting lifetime income, and potential governmental responses.

 Board Representative Phyllis Borzi and Director Gotbaum reported on ongoing work to analyze proposals to reform the multiemployer system. Secretary Lew expressed his view that PBGC should inform the policy process by providing a stark but objective analysis of the state of the insurance program, projections for the future, and what will happen if current policy is not changed. He emphasized the need to authoritatively state the size of the problem and not advocate for any particular policy or set of policies to address it. Director Gotbaum noted that the 2013 Exposure Report offers an important opportunity to call attention to the problem.

 Director Gotbaum then reported on the status of outstanding audit recommendations and walked the Board through the PBGC audit roadmap. Board Members requested internal timelines with intermediate deliverables and plans to address each audit finding and recommendation noted in the PBGC Audit Roadmap (Gantt charts). Director Gotbaum agreed to provide them.

 Acting Inspector General Deborah Stover-Springer recognized PBGC's highly successful first quarter of 2014, in which OIG closed more than half of the outstanding recommendations for the Benefits Administration and Payments Department (BAPD), many of which were old. She explained that if old recommendations are no longer relevant, PBGC management should come back to OIG and explain what action they think makes sense strategically.

 CliftonLarsonAllen audit partner Patrick Byer then discussed the required communications between the outside auditor and the Board. He acknowledged PBGC's improved focus in the corrective actions it has taken and noted that more progress had been made in the past year than in most of his time as outside auditor. However, like the Acting Inspector General, he noted that more corrective action work needs to be done.

 Chief Financial Officer Patricia Kelly reported on the highlights of the 2013 financial statements and the investment portfolio performance. She agreed to send the Board a summary of PBGC's implementation of the current Investment Policy Statement.

 The Board then went into executive session with the Acting Inspector General and then into an executive session with the Director. The meeting concluded at 3:30 p.m.