ANNUAL PERFORMANCE REPORT
PBGC's five-year strategic plan has four broad goals that form the framework
of the Corporation's short- and long-term plans. The PBGC goals are to:
- protect existing defined benefit plans and their participants, thereby
encouraging new plans;
- provide high quality, responsive services and accurate and timely payment
of benefits to participants;
- strengthen financial programs and systems to keep the pension insurance
system solvent; and
- improve internal management support operations.
The performance measures track specific results that are significant to PBGC's
customers and customer service accomplishments. The following table shows the
results achieved in 2001 and meets the annual reporting requirement established
by the Government Performance and Results Act. PBGC will revise its performance
measures during 2002 to keep them meaningful to stakeholders and will begin
reporting against the revised measures in 2003. PBGC's strategic plan may be
found on PBGC's Web site at www.pbgc.gov/about/stratplan.htm.
Achieving Performance Targets
Protecting the Interests of Participants, Thereby Encouraging New Plans:
- When a company sponsoring a defined benefit plan files for bankruptcy,
PBGC becomes the advocate for the interests of the plan's participants and
the pension insurance program. In 2001 PBGC fulfilled this advocacy role in
118 cases involving more than 122,000 participants.
- PBGC protects participants' interests by educating participants and pension
practitioners about defined benefit plans. PBGC conducted 68 group meetings
to inform participants in PBGC-trusteed pension plans about the PBGC guarantee
and what they can expect. Similarly, PBGC officials participated in meetings
and conferences with pension practitioners to address issues of mutual concern
and to get their feedback.
Customer Satisfaction:
- In 2001 PBGC joined the American Customer Satisfaction Index, the national
indicator of customer satisfaction. One hundred and seventy private sector
companies and 39 federal agencies participate in the index, which is produced
by a partnership between the University of Michigan Business School, the American
Society for Quality and the CFI Group. For its participant customers, PBGC's
2001 index is 73, two points higher than the combined index of all federal
agencies and the index of private sector service companies. PBGC's index of
confidence (a measure of PBGC customers' expectation that PBGC will do a good
job in the future) is 80. The results identify causes and effects of satisfaction
and focus PBGC's efforts to improve three activities: customer care, concern
resolution and written communications.
- 71 percent of pension practitioners rated PBGC's overall service "outstanding"
or "above average" in 2001, achieving the 2001 goal. This significant
improvement over the prior year is attributed, in part, to changes PBGC made
to its premium regulations to ease the burden for plan administrators. PBGC
also continued to stress the importance of delivering on its customer service
pledge.
- In 2001 the 10,000th missing participant was located through PBGC's efforts.
Participants thus found received pension benefits -- totaling in the millions
of dollars -- they otherwise would have lost.
Operations:
- The principal measure of operations is to "reduce to 3 to 4 years
the average time frame to send benefit determinations to participants in defined
benefit pension plans taken over by PBGC." Efforts to speed up processing
have succeeded. Participants received benefit determinations in 2001 more
than one year faster on average than participants in the previous year. As
an indication of continued improvement in processing times in the future,
the average age of unissued benefit determinations was reduced again this
year, from 2 years to 1.5 years.
- As occurred in 2000, participants received final benefits that were within
10 percent of the earlier estimated benefits in 94 percent of the cases, exceeding
PBGC's goal for the year.
- At the end of 2001, 98 percent of cases awaiting trusteeship were two years
old or less. The goal is that no pending case be more than one year old by
2002.
- 92 percent of eligible participants who completed applications received
pension payments from PBGC within three months, a further improvement over
the previous year.
Financial Management:
- The premium collection rate is the amount of premiums collected divided
by the amount of premiums due. PBGC collected 98 percent of the premiums due
in 2001, approximating its goal for the year.
- PBGC established a new definition for measuring the timely response to
requests for premium refunds, waiver of penalties and reconsideration of premium
decisions. The standard is 90 days from receipt to completion of the request,
and in 2002 PBGC's goal is to achieve this 75 percent of the time. Practitioners
said this is an important service element.
- Investment management results are measured against recognized industry
indices aggregated over a five-year period. The five-year period smooths out
volatility in annual market performance and provides a more realistic, long-term
view of investment success. In 2001 PBGC's five-year performance approximated
the indices for equities and fixed-income investments.
Table - 2001 PBGC Corporate Performance Measures
Program Evaluation
PBGC conducted customer satisfaction surveys of participants in plans trusteed
by PBGC and of pension practitioners who have dealings with us on premium payment
or standard termination matters. Evaluation of the survey responses resulted
in improvements in program operations, as discussed elsewhere in the Annual
Report. In 2001 the National Academy of Public Administration completed a study
of PBGC's workforce planning requirements and recommended a methodology that
PBGC has adopted to ensure that the skills needed to meet long-term workforce
requirements are available. A PBGC team evaluated the appeals process and completed
a business re-engineering study to improve the long-term efficiency of appeal
resolutions.
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