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MEETING OF THE BOARD OF DIRECTORS OF THE PENSION BENEFIT GUARANTY CORPORATION (PBGC) June 16, 2020 10:30 – 11:30 am (ET)

U.S. Department of Labor
Eugene Scalia, Secretary of Labor, and Chair, PBGC Board of Directors
Patrick Pizzella, Deputy Secretary of Labor
Jeanne Klinefelter Wilson, Acting Assistant Secretary, Employee Benefits Security Administration
Rachel Mondl, Chief of Staff to the Secretary
Andrew Kilberg, Counselor to the Secretary
Tim Cummings, Chief of Staff, Employee Benefits Security Administration
Rebecca Cole, Senior Policy Advisor, Employee Benefits Security Administration
Nicole Swift, Senior Employee Benefits Law Specialist, Employee Benefits Security Administration

U.S. Department of the Treasury
Steven Mnuchin, Secretary of the Treasury
Bimal Patel, Assistant Secretary for Financial Institutions
Philip Quinn, Senior Financial Analyst, Office of Financial Institutions Policy
W. Moses Kim, Director, Office of Financial Institutions Policy

U.S. Department of Commerce
Wilbur Ross, Secretary of Commerce
Tom Gilman, Chief Financial Officer and Assistant Secretary of Commerce for Administration (CFO/ASA)
Kevin Preskenis, Senior Advisor and Chief of Staff, CFO/ASA

Pension Benefit Guaranty Corporation
Gordon Hartogensis, Director, Pension Benefit Guaranty Corporation
Paul Chalmers, Acting General Counsel and Secretary to the Board
Kristin Chapman, Chief of Staff
Michael Rae, Deputy Chief Policy Officer
Patricia Kelly, Chief Financial Officer
John Greenberg, Chief Investment Officer
Robert Scherer, Chief Information Officer
Tyler Hernandez, Senior Advisor, Office of Policy and External Affairs
Karen Morris, Chief of Negotiations and Restructuring
Adi Berger, Director, Corporate Finance & Restructuring Department
David Foley, Chief of Benefits Administration
Latreece Wade, Risk Management Officer

PBGC Office of Inspector General
Nick Novak, Acting Inspector General
Brooke Holmes, Assistant Inspector General for Audits

PBGC Office of the Participant and Plan Sponsor Advocate
Constance Donovan, Participant and Plan Sponsor Advocate
Camille Castro, Senior Associate Participant and Plan Sponsor Advocate

The Chair called the telephonic meeting to order and welcomed the attendees. The Chair asked for approval of the minutes from the February 28, 2020, meeting, which the Board then approved by voice vote. The meeting then proceeded in accordance with the established agenda (Attachment 1).

Director Gordon Hartogensis described PBGC’s efforts to maintain its operational effectiveness in the face of the COVID 19 pandemic and to keep employees safe. PBGC deployed IT resources to support remote continuity of operations, and more than 98% of PBGC federal staff are currently teleworking. He also described PBGC’s efforts to enhance its emergency response planning and Continuity of Operations Plan to address future emergencies.

Director Hartogensis next discussed the guilty plea entered by former PBGC Procurement Director Jeffrey Donahue to a charge of conspiracy to bribe a public official in 2015 and 2016. He described the investigations he ordered upon learning of these charges.

The Director updated the Board on PBGC’s investment portfolio performance. He reported that while the financial market dislocations in March 2020 impacted PBGC’s investment portfolio, that impact was mitigated by PBGC’s investment approach.

He then discussed PBGC’s efforts to implement applicable provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted March 27, 2020, and to provide technical assistance to Congress on multiemployer pension issues.

The Chair thanked Director Hartogensis for his report and inquired as to the impact on the single-employer program of current and expected bankruptcies. Director Hartogensis described several bankruptcies occurring since February and potential trends, but he noted that it is too soon to know for certain what the impact would be on the single-employer program. The Chair also noted that PBGC’s Inspector General had recently departed and emphasized the urgency of finding a qualified replacement.

The Chair then recognized Bob Scherer, PBGC’s Chief Information Officer. Mr. Scherer reported on PBGC’s efforts to enhance its IT security. He noted that PBGC’s security posture has steadily improved as reflected in numerous metrics and described future strategies. The Chair thanked Mr. Scherer for his report and stressed the cybersecurity threats that exist and the need to protect against them.

The Chair then recognized PBGC’s Acting Inspector General, Nick Novak. Mr. Novak reported on facts disclosed to date regarding Procurement Director Jeff Donahue’s actions and the Inspector General’s efforts to identify any other wrongdoing and recommend measures to prevent future misconduct. He also described investigations by the Office of Inspector General of attempts by outsiders to defraud PBGC. He stated that PBGC’s financial statement audit is now underway and that it would be conducted virtually this year. He noted that PBGC is using a new audit firm and that PBGC management is being very cooperative.

The Chair emphasized that investigations of Mr. Donahue’s actions and potential remedial measures should not be limited to PBGC’s Procurement Department. The Chair stated that PBGC should ensure that whistleblower complaints are taken seriously; there were whistleblower complaints submitted before many of the events in the case unfolded. Mr. Novak defended how these complaints were handled. He also noted that there will be an examination of controls, some of which are outside the Procurement Department, such as increasing review by PBGC’s Office of General Counsel of procurement actions.

Secretary Ross asked whether there are any assurances that no one else was involved besides those who have already been charged with criminal misconduct. He also asked if PBGC knew which, if any, controls had broken down. Mr. Novak responded that the investigation as to both issues is still underway and that the investigation will go wherever the evidence leads. Director Hartogensis also stated that PBGC will look both within the Procurement Department and elsewhere to make certain that effective controls are in place to prevent future misconduct. The Chair stated that if efforts at ensuring effective controls is impeded by confidentiality associated with any additional Department of Justice investigations, there needs to be further discussions at the Board level.

There being no further business, the Chair adjourned the meeting.

Attachment 1

 

AGENDA

 

MEETING of the BOARD of DIRECTORS

of the PENSION BENEFIT GUARANTY CORPORATION (PBGC)

 

February 28, 2020

3:30 PM – 4:30 PM

U.S. Department of Labor

OSEC Conference Room Number S-2508

 

 

  1.  Introduction and Approval of
        February 28, 2020 Board Meeting Minutes                 Secretary Scalia
  2. Director’s Report:                                                          Director Gordon Hartogensis             
  3. Data Security:                                                               Chief Information Officer Bob Scherer
  4. OIG Update:                                                                 Acting IG Nick Novak
                                                                 

 

 

Last Updated: December 9, 2020