Skip to main content

About PBGC

Meeting of the Board of Directors of the Pension Benefit Guaranty Corporation July 30, 2015

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

Sarah Bloom Raskin, Deputy Secretary of the Treasury
Amias Gerety, Acting Assistant Secretary for Financial Institutions
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
Justin Antonipillai, Deputy General Counsel


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
Cathy Kronopolus, Chief of Benefits Administration
Bob Scherer, Chief Information Officer
Chris Bone, Director, Policy Research and Analysis Department

PBGC Office of Inspector General

Bob Westbrooks, Inspector General

PBGC Participant and Plan Sponsor Advocate

Constance Donovan

The Chair called the meeting to order at 10:01 a.m. He greeted the attendees and announced that Treasury Deputy Secretary Sarah Bloom Raskin would be attending in place of Secretary Lew. The meeting then proceeded in accordance with the established agenda (Attachment 1).

Acting Director Alice Maroni reported on the Corporation's progress in addressing open audit recommendations. She discussed how the Corporation has been responding to issues raised by the Participant and Plan Sponsor Advocate and addressing customer concerns. In addition, Acting Director Maroni announced that Acting Chief Policy Officer Michael Rae has agreed to accept the position on a permanent basis.

After noting his continuing interest in the processing of the Delphi final benefit determinations, the Chair discussed with the Acting Director how PBGC expects to progress on closing audit recommendations this year. Secretary Pritzker suggested that management and the auditors collaborate on a timeline for recommendation closures to manage expectations and Acting Director Maroni agreed to initiate that conversation. Secretary Pritzker stressed the importance of getting to the point where the Board can say that the Corporation has its controls in order. Acting Director Maroni noted that the standard is continually being raised for all government agencies such as the National Institute for Standards and Technology (NIST) standards for security controls. Deputy Secretary Raskin observed that this underscores the need to have a risk management culture to stay ahead of changes so they don't come as shocks.

PBGC Chief Information Officer (CIO) Bob Scherer reported on the state of PBGC cybersecurity. He observed that in his four months on the job, he has found issues similar to those he dealt with successfully as CIO of the National Transportation Safety Board. He identified two necessary conditions for closing the IT-related recommendations:  executive support and a professional, productive relationship with the Inspector General, and pointed to specific examples of each at PBGC. He further reported that, although as a small agency PBGC is not required to implement the OMB "cybersecurity sprint," PBGC is doing so anyway, as part of the effort to raise the bar and instill a risk management culture.

Secretary Pritzker inquired about creating a dashboard that would enable the Board to track progress. Deputy Secretary Raskin suggested that it be created for the cybersecurity sprint items as they are all quantifiable. Attention also needs to be paid to training people in this area. CIO Scherer agreed to provide the dashboard, and, with regard to training, noted that PBGC recently conducted an unannounced phishing test.

The Chair then turned to approval of the Investment Policy Statement (IPS). The Advisory Committee had recommended that the asset allocation be changed from 70% fixed income/30% equity to 65% fixed income/35% equity, with 7% of the equity allocation devoted to alternative investments. The Advisory Committee also had recommended that PBGC develop an implementation plan for alternative investments. After a thorough discussion, the Board reached an understanding that the Advisory Committee's recommendation to increase the equity allocation was premised on having alternative investments occupy that increased equity share. The Board determined that until it could review an implementation plan for alternatives, it could not determine whether to approve a change in the allocation to accommodate this new asset class. Therefore, the Board agreed to freeze the status quo until it could review an implementation plan from PBGC and the Advisory Committee and requested that the plan be provided to the Board in time to make a final decision on the IPS by the end of this year.

The next item involved the reporting line of the Participant and Plan Sponsor Advocate.  After discussing its basis in the MAP-21 law, the Chair moved that the Advocate be required to report to the Board. The motion was seconded and passed. The Chair directed the Board Representatives to work with Acting Director Maroni to implement the Board's action.

Inspector General Bob Westbrooks then gave his report. He explained that his framework is to balance independence with positive engagement with management, the Board and Congress. For his first year, Inspector General Westbrooks has a three point plan to (1) conduct a risk assessment, (2) rebaseline audit recommendations and (3) restructure the audit function. He further emphasized the need to improve audit follow-up on OIG's part and discussed the steps he has taken thus far.

The Board then went into Executive Session.

The meeting concluded at 11:30 a.m.


Attachment 1


Thursday, July 30, 2015
10:00 AM - 11:30 PM


I.Introduction by Secretary Perez

II. Acting Director's Report

III. PBGC Cybersecurity

IV. Investment Policy Statement Approval                                                                                             

V. Participant and Plan Sponsor Reporting Relationship           

VI. OIG Report                                                                            

VII. OIG Executive Session                                                          

VIII. Board Member Executive Session