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Meeting of the Board of Directors of the Pension Benefit Guaranty Corporation October 13, 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
Ali Khawar, Counselor to the Secretary, Department of Labor
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
Amias Gerety, Acting Assistant Secretary for Financial Institutions
Philip Quinn, Senior Policy Analyst, Office of Financial Institutions Policy
Kim Egert, Senior Policy Advisor, Office of Financial Institutions Policy
Liz Hipple, Policy Advisor, Office of Financial Institutions Policy

Department of Commerce
Penny Pritzker, Secretary of Commerce
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
Bob Scherer, Chief Information Officer
Michael Rae, Deputy Chief Policy Officer
Edgar Bennett, Acting Chief Management Officer
Chris Bone, Director, Policy Research and Analysis Department
Bernice Lemaire, Acting Risk Management Officer
Deborah Herald, Senior Advisor, Benefit Administration and Payment Department
Susan Strassman, Operations Manager, Benefit Administration and Payment Department

PBGC Office of Inspector General
Bob Westbrooks, Inspector General
William Owens, OIG Chief of Staff

PBGC Participant and Plan Sponsor Advocate
Constance Donovan, Participant and Plan Sponsor Advocate

The Board convened telephonically in executive session at 10:30 a.m.  At 11:00, the Chair called the meeting to order.  He announced that the Senate had confirmed Tom Reeder as PBGC's Director.  Joined by Secretaries Pritzker and Lew, he thanked Acting Director Maroni for her service during the transition.  The meeting then proceeded in accordance with the established agenda.

Acting Director Maroni reported on three issues she understood to be of importance to the Board.  She explained the steps taken since the April Board meeting to address enterprise risk management, including appointment of an acting risk management officer, creation of a corporate-wide risk management council, and creation of dashboards to monitor risk.  Acting Director Maroni then updated the Board on PBGC progress in addressing outstanding OIG recommendations.  Finally, she advised on the status of the Smaller Asset Managers pilot program, which is in the confidential technical evaluation stage of the procurement.  In response to the Chair's question, she estimated the process would be complete by late spring or early summer of 2016.

The Chair observed that this transition period would be an opportune time to talk with the Advisory Committee about its role, and that the Board has views as well.  Acting Director Maroni agreed, noting that with some membership changes coming up, this is a timely request.  The Chair asked for a separate conversation about the Delphi case processing and Acting Director Maroni agreed to schedule one.

The Chair next brought up the investment policy agenda item.  After expressing his gratitude to the Advisory Committee for its hard work, he reported that the Advisory Committee, after reviewing additional information, had recommended the current asset allocation policy be maintained, and that the Board agreed.  As suggested by the Advisory Committee at the April Board meeting, the Chair requested that PBGC continue to work with the Advisory Committee to examine the current strategy within the bond portfolio to determine if a different allocation would provide a more optimal fixed income portfolio.

Accordingly, the Chair moved to approve the Investment Policy Statement (IPS) in Tab 3 of the Board Book, which includes continuing the current asset allocation without change and minor changes to revise dated content of the prior IPS.  The motion was seconded and passed.

The Chair then recognized Inspector General Bob Westbrooks.  Inspector General Westbrooks reported that audit recommendations continue to trend down and by the first week in November the auditors should have a good indication of how far the needle has moved.  This quarter his office issued a report on cloud computing similar to reports issued at other agencies, emphasizing the need to have controls in contracts to adequately audit and monitor third party providers.  The Inspector General anticipates soon issuing a report on governance of internal controls to provide information to the Board and the Corporation on where there are gaps and to provide meaningful recommendations to address them.

The Board then went into executive session with the Inspector General.

The meeting concluded at 11:32 a.m.



Tuesday, October 13, 2015

I. Board Member Executive Session
II. Introduction by Secretary Perez
III. Acting Director’s Report
IV. Investment Policy Statement
V. OIG Report
VI. OIG Executive Session

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