The United States Government Accountability Office (GAO), which has been critical of the PBGC in the past over its governance practices (See GAO: PBGC Investment Policy May be Riskier than First Thought ), asserted in the latest report that the fact that the PBGC’s board only has three members makes it impossible for directors to provide the level of oversight the GAO contended was necessary.
GAO researchers also suggested the agency provide any new directors or top PBGC officials replaced by the new presidential administration after the November elections earlier GAO studies about the PBGC’s operations as well as similar documents generated by the PBGC’s Inspector General. PBGC officials have agreed to the request, the GAO said.
The good news, according to the GAO, concerns the steps the PBGC has already taken to beef up its administration that were covered by earlier GAO studies.
For example, the PBGC board revised the corporation’s bylaws to more clearly define their roles and responsibilities and those of the agency’s representatives, director, and senior management. PBGC also contracted with a consulting firm to provide a background report to assist the board in its review of alternative corporate governance structures, including restructuring the board of directors as GAO suggested in 2007, the GAO said (See GAO: Role of PBGC Board Needs Clarification ).
In terms of potential changes to come: “While the PBGC is subject to routine congressional oversight, some government corporations have other types of reporting requirements in place – such as congressional notifications and reporting protocols for their advisory committees – to ensure effective communication exists between the corporations and Congress,” the GAO said.
According to the report, the nature of the PBGC’s work makes continual governance improvements important. “With more than 44 million Americans insured by PBGC, it is essential that the corporation is soundly governed and efficiently managed to guarantee that retirement income will be available to all those covered,” the GAO asserted.
The report is available here .