“We now have three children in college, and I promised my wife that this year I would return to the private sector,” Gotbaum wrote in a letter to PBGC staff.
Gotbaum said he has mixed emotions about leaving, noting the accomplishments the agency has achieved under his direction, as well as the additional work he feels needs to be done. “American Airlines was a reminder that PBGC is more than a safety net. That it can preserve pensions as well as replace them; 130,000 workers and their families are better off as a result,” he noted. The agency’s work with American Airlines was a point of praise offered by U.S. Labor Department Secretary Thomas E. Perez in a letter to Gotbaum following his resignation. Gotbaum had attached the note from Perez to his letter to colleagues, writing “Although the letter is addressed to me, it is really about you and the important work PBGC does in preserving retirement security.”
Gotbaum also mentioned the reversal of “at least one unjust abuse of the church plan exemption” the agency worked with the Treasury Department to secure to enable it to take on the pensions for employees of the Hospital Center at Orange. And, he listed ongoing improvements stemming from the strategic review of the PBGC’s Benefits and Payment Department (BAPD) as an accomplishment during his tenure.
But, Gotbaum said “much remains to be done.” The agency itself is in financial trouble with a deficit of about $36 billion for the 2013 fiscal year, and Gotbaum has long warned of the troubles with its multiemployer plan program.
During his time at the agency, Gotbaum has spoken before Congress and during industry group’s events to promote policy to encourage the offering of defined benefit (DB) pension plans by employers (see “Gotbaum Encourages Traditional Pension Offerings,” and “Retirement Industry Needs More Options to Prepare Workers for Retirement”), as well as proposed lighter rules to make it easier for employers to do so. He has also used creative ways to help preserve pensions, such as using the agency’s authority to partition an insolvent employer’s participants from a multiemployer plan to boost the plan’s financial position. The move to save the Bakery and Sales Drivers Local 33 Industry Pension Fund in Baltimore, which was slated to go insolvent following the bankruptcy filing of Hostess Brands, was only the third time the agency had used its partition authority in its history.In his letter to colleagues, Gotbaum said “there will always be unfinished challenges.” About his resignation he concluded: “Making the change now will guarantee a new Director two full years in which to work—and PBGC now has a full career leadership team that can carry on these efforts.”