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Meeting of the Board of Directors of the Pension Benefit Guaranty Corporation September 24, 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
Sharon Block, Senior Counselor to the Secretary of Labor
Ali Khawar, Chief of Staff, Employee Benefits Security Administration
Hilary Duke, Division Chief, Office of Policy and Research, Employee Benefits Security Administration

Department of the Treasury

Jacob J. Lew, Secretary of the Treasury
Matthew Rutherford, Acting Under Secretary for Domestic Finance
Philip Quinn, Senior Policy Analyst, Office of Financial Institutions Policy
Kim Egert, Policy Advisor, Office of Financial Institutions Policy
Liz Hipple, Policy Advisor, Office of Financial Institutions Policy

Department of Commerce

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

PBGC Advisory Committee

David Strauss, Chairman


Alice C. Maroni, Acting Director
Ann Orr, Chief of Staff
Judith Starr, General Counsel and Secretary to the Board
Patricia Kelly, Chief Financial Officer
John Greenberg, Chief Investment Officer
Sandy Rich, Chief of Negotiations and Restructuring
Cathy Kronopolus, Acting Chief of Benefits Administration
Dan Rourke, Senior Advisor

PBGC Office of Inspector General

Deborah Stover-Springer, Acting Inspector General
Rashmi Bartlett, Assistant Inspector General for Audit
Peter Paradis, Assistant Inspector General for Investigations

PBGC Participant and Plan Sponsor Advocate

Constance Donovan

Secretary Pritzker called the telephonic meeting, the Board’s fourth for fiscal year 2014, to order at 11:03 a.m. She greeted Treasury’s new Board Representative, Acting Under Secretary for Domestic Finance Matthew Rutherford, and welcomed the attendees. The meeting then proceeded in accordance with the established agenda (Attachment 1).

PBGC Acting Director Alice Maroni thanked the Board for the faith it placed in her and adverted to her written report. She announced that in light of the resignation of Phil Langham, Chief of Benefits Administration and Director of the Benefits Administration and Payment Department, Cathy Kronopolus would serve as the acting official in both roles. A seasoned senior executive and highly competent professional, Ms. Kronopolus has the full confidence of the Acting Director and the senior executives of PBGC.

Confidential Employer Information

Secretary Pritzker then recognized Advisory Committee Chair David Strauss, who updated the Board on the status of the project plan for investment policy review and recommendations for an emerging manager program. The plan addresses all of the questions raised by the Board at the last meeting. Secretary Lew noted that we should consider the inclusion of smaller asset-manager relationships. He offered the assistance of the Treasury Department with research on an emerging manager program, and expressed his hope that demonstrable progress can be made. Mr. Strauss assured the Board that the Committee would be in a position to make a recommendation on an emerging manager program in time for the next Board meeting.

Acting Inspector General Deborah Stover-Springer provided observations from the ongoing financial statement audit and reviewed the findings of the recent security assessment. She also discussed her letter to Congress on the processing of the Delphi Salaried Plan, noting PBGC is highly committed to meeting its timeline without sacrificing quality control, but that there are challenges to meeting the timeline from competing priorities and cascading dependencies.

Acting Director Maroni advised the Board that she agreed with Ms. Stover-Springer’s assessment that the schedule is aggressive, but that so far PBGC is able to meet it. She committed to advise the Board of any show stoppers.

In response to a question from Secretary Lew, Chief Financial Officer Patricia Kelly advised that PBGC has not implemented any changes to the current ranges surrounding the asset allocations in the current investment policy, but is awaiting direction from the Board. The Advisory Committee will review this issue when it receives detailed analytic work in December. The Board then discussed whether other expert advice should be sought on investment policy and left it open for subsequent responses by Board Members or staff.

The meeting adjourned at 11:38 a.m.

Attachment 1



Wednesday, September 24, 2014

11:00 AM – 11:30 AM

I. Introduction by Secretary Perez

II. Acting Director’s Report

III. Update on Investment Policy and Diverse and Emerging Managers

IV. Acting Inspector General Report

V. Executive Session