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News & Policy

FROM THE PBGC BOARD OF DIRECTORS: PBGC Board of Directors Approves New Investment Policy


May 27, 2011
Contact: Mike Trupo or Jason Surbey,
U.S. Department of Labor, 202-693-6588 or 202-693-4668

The Board of Directors of the Pension Benefit Guaranty Corporation today announced that it has unanimously adopted a new investment policy.

The investment policy objective is to maximize total return within a prudent risk framework that is informed by PBGC's fixed obligations and asset composition of potential trusteed plans. The investment policy establishes a 30 percent target asset allocation for equities and other non-fixed income assets, and a 70 percent asset allocation for fixed income. It permits an allocation range of plus or minus 5 percent.

The PBGC Bylaws require the board to review the investment policy at least every two years and approve an investment policy at least every four years. The investment policy was developed after an extensive review process that included consultation with outside investment and finance experts, the PBGC Advisory Committee, industry and stakeholder groups and the PBGC Director and staff. The review also included comprehensive analyses of the impact of a range of economic, portfolio, and demographic risks on PBGC's liabilities.

The PBGC plays a critical role in the retirement security of more than 44 million workers who rely on private defined benefit pensions, and 1.5 million more who depend on PBGC for their current or future pension benefits. PBGC's most recent Annual Report released November 12, 2010 reported a $23 billion deficit between liabilities and assets available to pay those liabilities. PBGC has almost $80 billion in assets and can pay benefits for many years to come but at present does not have the resources to fully satisfy its obligations in the long-run.

PBGC assets are divided between a revolving fund for premium revenue, and a trust fund for assets acquired from failed pension plans and recoveries from their sponsors. Short-term holdings in the revolving fund are managed internally by PBGC staff, with all other discretionary investments managed by professional asset management firms.

The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. The PBGC Board of Directors is comprised of the Secretaries of Labor, Treasury, and Commerce, and is chaired by the Secretary of Labor.

The Investment Policy Statement is posted on the PBGC web site at

For further information please contact:

Mike Trupo or Jason Surbey at the U.S. Department of Labor at 202-693-6588 or 202-693-4668.

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