In response to a request for information on ways the agency could reduce the burden associated with its regulations, ERIC said the stakeholder advisory group would regularly meet to review regulations and the impact of the PBGC’s activities on the pension system, and identify in advance major issues before the regulations are proposed.
ERIC also urged the PBGC to use a more collaborative process for promulgating major regulations to help ensure they are workable and appropriately balance the needs of all stakeholders. The group argued that, under the standard process, the PBGC is forced to consider comments and resolve complicated issues largely on its own, which takes a long time and there is a significant risk of not getting everything “right.” By contrast, back-and-forth sharing of ideas and concerns is an efficient way to develop final rules that everyone can live with, ERIC said, and cited negotiated rulemaking as an example of what worked.
ERIC called for an expansion of the PBGC’s Board of Directors to include outside directors who can represent stakeholder interests. ERIC cited a December 2010 Government Accountability Office study recommending that Congress consider expanding the PBGC’s Board of Directors “to include additional members with diverse backgrounds who possess knowledge and expertise useful to PBGC’s mission.”
ERIC also addressed the PBGC’s support of efforts to transfer from Congress to the PBGC sole authority to assess individualized premium rates based on employer/plan sponsor credit-worthiness as demonstrating the need to include stakeholders on the Board of Directors. “Putting the PBGC in charge of determining not only the amount of the premium that individual employers pay, but also the means by which they are set—with no effective oversight from Congress or another neutral party—would create a direct conflict of interest,” ERIC President Mark Ugoretz said in the comment letter.Ugoretz warned that, “The risk of being assessed unpredictable premiums based on a conflicted governmental agency’s assessment of credit worthiness would accelerate the flight from the defined benefit system; and it would all but ensure that employers who do not have defined benefit pension plans never create them.”