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Meeting of the Board of Directors of the Pension Benefit Guaranty Corporation

Monday, April 15, 2013
6:00 PM – 7:30 PM


Department of Labor
Seth D. Harris, Acting Secretary of Labor and Chair of the PBGC Board of Directors
Phyllis C. Borzi, 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
Jacob J. Lew, Secretary of the Treasury
Mary J. Miller, Under Secretary for Domestic Finance
Mark Iwry, Senior Advisor to the Secretary/Deputy Assistant Secretary for Retirement and Health Policy
Philip Quinn, Senior Policy Analyst, Office of Financial Institutions Policy
Matthew Carey, Policy Advisor

Department of Commerce
Rebecca M. Blank, Deputy Secretary of Commerce
Mark Doms, Under Secretary for Economic Affairs
Rick Lattimer, Policy Analyst, Economics and Statistics Administration

Joshua Gotbaum, Director
Ann Orr, Chief of Staff
Judith Starr, General Counsel and Secretary to the Board
Patricia Kelly, Chief Financial Officer
Leslie Kramerich, Deputy Chief Policy Officer

PBGC Office of Inspector General
Rebecca Anne Batts, Inspector General
Deborah Stover-Springer, Deputy Inspector General
Aaron Jordan, Assistant Inspector General for Investigations


 The Chair called the meeting to order at 6:10 p.m., and welcomed Treasury Secretary Jack Lew to the PBGC Board. After greeting the attendees, the Chair turned to the established agenda (Attachment 1).

 Director Gotbaum gave his report. After updating the Board on PBGC management and operational issues, he discussed the major concerns facing PBGC finances and Americans' retirement security.

 Chief Financial Officer Patricia Kelly reported on PBGC's financial condition and investment performance for the past quarter. She announced that the new financial risk management system is now live and thanked the Board for approving its funding. Ms. Kelly also informed the Board of the Inspector General's March 15, 2013 report finding PBGC in compliance with the Improper Payments Elimination and Recovery Act (IPERA) requirements under an alternative OMB-approved approach. After discussing the drivers of PBGC liabilities, she and Director Gotbaum agreed with a suggestion from Secretary Lew that PBGC undertake additional work on interest rate sensitivity.

 Board Representative Phyllis Borzi explained the bylaw requirement that the Board review the investment policy at least every two years and approve the investment policy statement at least every four years. Ms. Borzi announced that the two-year review would be coordinated with the requirement of the Moving Ahead for Progress in the 21st Century Act (MAP-21) for an annual meeting between the Board and the PBGC Advisory Committee.

 Director Gotbaum led a discussion of the state of multiemployer plans and the multiemployer insurance program. He emphasized the importance of these plans to more than 10 million people and described the challenges they, and PBGC's program insuring them, now face. The Board discussed with the Director the ongoing research and analysis being undertaken by PBGC and the Board agencies in response to the Board's guidance at the last Board meeting to look at options for reform.

 The Chair then turned to Board Secretary Starr's report on the status of PBGC actions to comply with MAP-21 and reviewed current progress.

 Board Representative Borzi updated the Board on the ongoing peer review of PBGC's Pension Insurance Modeling System (PIMS) by the Social Security Administration, the designated peer reviewer, using two of its Retirement Research Consortium grantees.

 Inspector General Rebecca Batts briefed the Board on the reports her office has issued since the December 2012 Board meeting. She described the status of open recommendations, particularly in the information technology area. She noted that, although progress has been slow, IT staff has dug deep into her office's recommendations and has exhibited a good understanding of what needs to be done.

The Board then went into executive session with the Inspector General. The meeting concluded at 7:40 p.m.


Attachment 1



Topic Number Topic Presenter
Topic One I. Introduction Seth Harris, Acting Secretary of Labor
Topic Two II. Director's Report Josh Gotbaum, PBGC Director
Topic Three III. Financial/Investment Update Patricia Kelly, PBGC Chief Financial Officer
Topic Four IV. Biannual Investment Policy Review Phyllis Borzi, Assistant Secretary of Labor
Topic Five V. Multiemployer Issues Josh Gotbaum, PBGC Director
Topic Six VI. MAP-21 Briefing Judith Starr, PBGC General Counsel and Board Secretary
Topic Seven VII. PIMS Peer Review Phyllis Borzi, Assistant Secretary of Labor
Topic Eight VIII. OIG Update Rebecca Anne Batts, PBGC Inspector General
Topic Nine IX. Executive Session with OIG  
Topic Ten X. Board Member Executive Session  
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