Meeting of the Board of Directors of the Pension Benefit Guaranty Corporation December 04, 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
Kendra Kosko, Employee Benefits Law Specialist, Employee Benefits Security Administration
Department of the Treasury
Jacob J. Lew, Secretary of the Treasury
Matthew Rutherford, Acting Under Secretary for Domestic Finance
Mark Iwry, Senior Advisor to the Secretary of the Treasury and Deputy Assistant Secretary (Retirement and Health Policy)
Sam Valverde, Senior Advisor to the Under Secretary for Domestic Finance
Patricia Kao, Director, Office of Financial Institutions Policy
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
Donald Butt (by telephone)
Dallas Salisbury (by telephone)
Alice 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
Michael Rae, Acting Deputy Chief Policy Officer
Chris Bone, Director, Policy Research and Analysis Department
Dan Rourke, Senior Advisor
PBGC Office of Inspector General
Deborah Stover-Springer, Acting Inspector General
Rashmi Bartlett, Assistant Inspector General for Audit
Patrick Byer, Principal, CliftonLarsonAllen LLP
George Fallon, Principal, CliftonLarsonAllen LLP
Marlon Perry, Senior Manager, CliftonLarsonAllen LLP
PBGC Participant and Plan Sponsor Advocate
The Chair called the meeting to order at 10:30 a.m. and welcomed the attendees. He extended his thanks to Acting Director Alice Maroni and PBGC senior staff, as well as to the members of the PBGC Advisory Committee for all their hard work. The meeting then proceeded in accordance with the agenda (Attachment 1).
Advisory Committee Chair David Strauss discussed the Advisory Committee's recommendation to establish a smaller managers program aimed at removing barriers so smaller managers could compete for PBGC investment management business. Mr. Strauss explained the process undertaken by the Committee to craft a roadmap for a program within the existing legal and regulatory framework. The Committee's recommendation takes three parts: lower the required level of assets under management, lower the size of the mandate, and engage in outreach to smaller managers.
Board Members discussed the recommendations and agreed that starting with a pilot program would both enable the program to be implemented sooner and give the agency real world experience with the program on which to build. The Chair directed the Board Representatives to work with PBGC to craft a smaller managers program consistent with the Advisory Committee's recommendation and have a pilot program ready to go by the end of 2015. Board Representative Phyllis Borzi stated that a resolution to this effect would be drafted.
Acting Director Alice Maroni, recognizing the fullness of the agenda, adverted to her written Director's Report. She advised the Board that, in addition to what she had reported, KPMG had delivered its report on the Delphi Salaried Plan asset evaluation on November 26 as scheduled.
The Board then went into executive session to discuss confidential matters.
The Board reconvened and the Chair recognized the Acting Inspector General.
Acting Inspector General Deborah Stover-Springer introduced Patrick Byer of CliftonLarsonAllen LLP (CLA), the independent auditor. Mr. Byer recognized PBGC's achievement of an unmodified opinion on its financial statements, but noted CLA had again issued an adverse opinion on internal controls. Three material weaknesses from the previous audit remain; there was improvement but further work must be done to remove them. One significant deficiency was removed, but two more were added. The Acting Inspector General then informed the Board that following a full and open competition, CLA had won the new audit contract for the next five years.
Participant and Plan Sponsor Advocate Constance Donovan briefed the Board on her first year on the job and the impressions she has gained of PBGC from within and outside the agency.
The Chair thanked Ms. Donovan and the Board went into executive session with the Acting Inspector General.
The meeting adjourned at noon.