Acting PBGC Head Recommends Dumping Money Mgmt. Contracts

May 20, 2009 ( - Vince Snowbarger, acting director of the Pension Benefit Guaranty Corporation, has recommended three controversial contracts with Wall Street firms be dropped, according to a letter released Wednesday.

U.S. Secretary of Labor Hilda L. Solis revealed the Snowbarger recommendation to the agency’s board in a letter sent to and released by U.S. Senator Herb Kohl (D-Wisconsin), chairman of the Senate Special Committee on Aging, which conducted a hearing into the private-sector pension insurer on Wednesday (see PBGC Future Depends on What Happens to DB Plans  ).

Questions have been raised about contacts between former Director Charles Millard’s office and the three firms chosen to help implement a controversial asset allocation change (see Former PBGC Head Draws Scrutiny ). Millard appeared before Kohl’s committee Wednesday but asserted his Constitutional rights against incrimination rather than respond to questions (see Millard Invokes Fifth Amendment Rights at Senate Hearing ).

Regarding Snowbarger’s comments to terminate agreements with   Goldman Sachs, BlackRock and JPMorganto invest up to $2.5 billion in PBGC assets, Solis asserted: “As part of our governance and oversight responsibilities, we take this matter very seriously…

The Solis letter to Kohl is available  here .