Pension Benefit Guaranty Corporation: Need for Improved Oversight
Persists (10-SEP-08, GAO-08-1062).				 
                                                                 
The Pension Benefit Guaranty Corporation (PBGC) insures the	 
pension benefits of 44 million private sector workers and	 
retirees in over 30,000 employer-sponsored pension plans. In July
2007, GAO reported that PBGC's governance structure needed	 
improvements, and asked Congress to consider expanding the board 
of directors to include additional members. GAO also recommended 
that the board develop policies and mechanisms consistent with	 
corporate governance practices, and develop formal guidelines to 
clarify the roles and responsibilities of the board chair,	 
members, their representatives, and the director. On the basis of
that work, this report addresses (1) the steps PBGC has taken to 
improve policy direction and oversight and (2) how Congress	 
applies oversight to PBGC and what other oversight mechanisms	 
exist for government corporations. GAO reviewed PBGC's new	 
corporate bylaws and the structure and reporting requirements of 
selected government corporations. GAO also interviewed PBGC and  
Department of Labor officials.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-1062					        
    ACCNO:   A84142						        
  TITLE:     Pension Benefit Guaranty Corporation: Need for Improved  
Oversight Persists						 
     DATE:   09/10/2008 
  SUBJECT:   Advisory committees				 
	     Congressional oversight				 
	     Federal advisory bodies				 
	     Federal corporations				 
	     Federal funds					 
	     Financial management				 
	     Funds management					 
	     Investigations into federal agencies		 
	     Pension claims					 
	     Pensions						 
	     Program evaluation 				 
	     Program management 				 
	     Reporting requirements				 
	     Retirement 					 
	     Retirement income					 
	     Strategic planning 				 
	     Policies and procedures				 
	     GAO High Risk Series				 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-08-1062

   

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as part 
of a longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to [email protected]. 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 

Report to the Chairman, Committee on Ways and Means, House of 
Representatives: 

United States Government Accountability Office: 
GAO: 

September 2008: 

Pension Benefit Guaranty Corporation: 

Need for Improved Oversight Persists: 

GAO-08-1062: 

GAO Highlights: 

Highlights of GAO-08-1062, a report to the Chairman, Committee on Ways 
and Means, House of Representatives. 

Why GAO Did This Study: 

The Pension Benefit Guaranty Corporation (PBGC) insures the pension 
benefits of 44 million private sector workers and retirees in over 
30,000 employer-sponsored pension plans. In July 2007, GAO reported 
that PBGCï¿½s governance structure needed improvements, and asked 
Congress to consider expanding the board of directors to include 
additional members. GAO also recommended that the board develop 
policies and mechanisms consistent with corporate governance practices, 
and develop formal guidelines to clarify the roles and responsibilities 
of the board chair, members, their representatives, and the director. 
On the basis of that work, this report addresses (1) the steps PBGC has 
taken to improve policy direction and oversight and (2) how Congress 
applies oversight to PBGC and what other oversight mechanisms exist for 
government corporations. 

GAO reviewed PBGCï¿½s new corporate bylaws and the structure and 
reporting requirements of selected government corporations. GAO also 
interviewed PBGC and Department of Labor officials. 

What GAO Found: 

Although PBGCï¿½s board has strengthened the corporationï¿½s governing 
bylaws, the three-member board of directors is still limited in its 
ability to provide policy direction and oversight to PBGC. In 
implementing our earlier recommendation, the board revised the 
corporationï¿½s bylaws to more clearly define the roles and 
responsibilities of PBGCï¿½s board members, 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. However, because of 
its small size, the board has not been able to develop procedures and 
mechanisms to monitor PBGCï¿½s operations, such as standing committees, 
which are mechanisms used by other government corporations. PBGC may 
also be exposed to challenges as the board, its representatives, and 
the director will likely change with the upcoming presidential 
transition in January 2009. While PBGC management has experienced a 
partial leadership change in recent years and provides operational and 
financial information to those newly appointed, PBGC Inspector General 
and GAO reports have recently identified additional financial and 
operational challenges facing the corporation. This additional 
information could help the new board members better understand the 
vulnerabilities and challenges facing the corporation. 

PBGC is subject to routine congressional oversight, but certain other 
government corporations have other types of reporting requirements in 
placeï¿½such as congressional notifications and reporting protocols for 
their advisory committeesï¿½to ensure effective communication exist 
between the corporations and Congress. Congressional oversight of PBGC 
in recent years has ranged from formal committee hearings to 
investigations and studies conducted by its congressional support 
agencies. For example, since 2002, PBGC officials have testified 19 
times before several different committees on issues such as the status 
of its financial condition. Further, GAO, the Congressional Budget 
Office, and the Congressional Research Service have issued a variety of 
reports and testimonies on PBGC financial and operational matters. 
However, PBGC does not have reporting requirements applied to other 
government corporations for providing additional information to 
Congress. For example, the Millennium Challenge Corporation and the 
Commodity Credit Corporation are required to notify Congress prior to 
conducting certain financial transactions. The advisory committee of 
the Federal Deposit Insurance Corporation formally reports to its board 
of directors, while the Export-Import Bank of the United Statesï¿½ 
advisory committee formally reports to its board and Congress each year 
on matters related to their respective organizations. In addition, the 
advisory boards of other government entities with retirement-related 
responsibilitiesï¿½such as the Social Security Administration, the 
Railroad Retirement Board, and the Federal Retirement Thrift Investment 
Boardï¿½provide reports to their overseeing bodies. 

What GAO Recommends: 

GAO recommends that PBGC provide Office of Inspector General and GAO 
reports on the corporationï¿½s management and financial challenges to the 
newly appointed board members, board representatives, and director. In 
response, PBGC agreed to provide such reports to new appointees. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-1062]. For more 
information, contact Barbara Bovbjerg at (202) 512-7215 or 
[email protected]. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Revised Bylaws Improve Policy Direction and Oversight, but Board 
Structure Continues to Limit Attention and Oversight: 

Congress Has Overseen PBGC in Several Ways, but Some Other Government 
Corporations Have Additional Reporting Requirements: 

Conclusions: 

Recommendation for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Selected PBGC Single-Employer Plan Pension Data by State: 

Appendix III: Bylaws of the Pension Benefit Guaranty Corporation, May 
23, 2008: 

Appendix IV: List of Selected Reports and Testimonies Related to the 
Pension Benefit Guaranty Corporation: 

Appendix V: Comments from the Pension Benefit Guaranty Corporation: 

Appendix VI: GAO Contact and Acknowledgments: 

Tables: 

Table 1: PBGC Appearances before Congress since 2002: 

Table 2: Examples of Advisory Committees at Government Corporations: 

Figures: 

Figure 1: Number of Payees Receiving Single-Employer Program Benefits 
from PBGC, Fiscal Year 2006: 

Abbreviations: 

Amtrak: National Railroad Passenger Corporation: 

CBO: Congressional Budget Office: 

CCC: Commodity Credit Corporation: 

CRS: Congressional Research Service: 

ERISA: Employee Retirement Income Security Act of 1974: 

FDIC: Federal Deposit Insurance Corporation: 

GCCA: Government Corporation Control Act of 1945: 

MCC: Millennium Challenge Corporation: 

OPIC: Overseas Private Investment Corporation: 

PBGC: Pension Benefit Guaranty Corporation: 

SSA: Social Security Administration: 

[End of section] 

United States Government Accountability Office:
Washington, DC 20548: 

September 10, 2008: 

The Honorable Charles Rangel: 
Chairman: 
Committee on Ways and Means: 
House of Representatives: 

The Pension Benefit Guaranty Corporation (PBGC) insures the pension 
benefits of 44 million private sector workers and retirees in over 
30,000 employer-sponsored pension plans. Since its creation in 1974, 
PBGC's assets have increased significantly, making its financial 
portfolio one of the largest of any federal government corporation. 
PBGC holds approximately $68 billion in assets and approximately $82 
billion in liabilities from underfunded plans--many of which were 
terminated in the past decade. As a result, PBGC has an accumulated 
deficit that currently stands at about $14 billion. Recognizing the 
effect PBGC's financial condition could have on the federal budget, in 
2003, we placed PBGC's largest insurance program on GAO's High Risk 
list; a list composed of federal programs that need attention and 
transformation.[Footnote 1] PBGC's insurance program remains on the 
list today. 

PBGC is governed by a three-member board of directors consisting of the 
Secretaries of the Treasury, Labor, and Commerce, who are responsible 
for providing policy direction and oversight of PBGC. In July 2007, we 
reported that the board structure was not sufficient in size to include 
the expertise or diverse set of interests needed to provide policy 
direction and oversight of PBGC. Consequently, we asked Congress to 
consider restructuring the corporation's board of directors by 
appointing additional members with diverse backgrounds who possess 
knowledge and expertise useful to PBGC's responsibilities. We also 
recommended that the board develop policies and mechanisms consistent 
with corporate governance practices and develop formal guidelines to 
articulate the roles and responsibilities of the board chair, members, 
their representatives, and the director.[Footnote 2] You asked us to 
update the progress PBGC has made in improving its governance structure 
to provide policy direction and oversight since our report. 
Specifically, this report addresses (1) the steps PBGC has taken to 
improve its policy direction and oversight and (2) how Congress applies 
oversight to PBGC and what other oversight mechanisms exist for 
government corporations. 

To identify the steps PBGC has taken to improve its governance 
structure, we updated our prior work, collecting and reviewing 
documents related to PBGC's bylaws, which were published in May 2008. 
We also reviewed reports on PBGC's organizational structure. To 
identify how Congress has recently exercised oversight of PBGC, we 
reviewed congressional hearings from 2002 to the present related to 
PBGC matters, examined the work of the Congressional Budget Office, the 
Congressional Research Service, and PBGC's Office of Inspector General, 
and reviewed PBGC's congressional reporting requirements. To identify 
oversight mechanisms that exist at other government corporations, we 
collected information on the federal government corporations we 
identified for our July 2007 review that have similar missions or 
designations to those of PBGC. Moreover, we reviewed government 
agencies with retirement-related responsibilities to determine what 
additional mechanisms may exist. We also met with officials from PBGC 
and the Department of Labor. 

We conducted this performance audit between June 2008 and September 
2008 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. Appendix I 
discusses our scope and methodology in further detail. 

Results in Brief: 

Although PBGC's board has strengthened the corporation's governing 
bylaws, the three-member board of directors is still limited in its 
ability to provide policy direction and oversight to PBGC. In 
implementing our earlier recommendation, the board revised the 
corporation's bylaws to more clearly define the roles and 
responsibilities of PBGC's board members, 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 we suggested in 2007. However, because of its 
small size, the board has not been able to develop procedures and 
mechanisms to monitor PBGC's operations, such as standing committees, 
which are mechanisms used by other government corporations. PBGC may 
also be exposed to challenges as the board, its representatives, and 
the director will likely change with the upcoming presidential 
transition in January 2009. While PBGC management has experienced a 
partial leadership change in recent years and provided operational and 
financial information to those newly appointed, PBGC's Inspector 
General and our reports have recently identified additional financial 
and operational challenges facing the corporation. This additional 
information could help the new board members and their representatives 
better understand the vulnerabilities and challenges facing the 
corporation. 

PBGC is subject to routine congressional oversight, but 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. Congressional oversight of PBGC in 
recent years has ranged from formal committee hearings to 
investigations and studies conducted by congressional support agencies. 
For example, since 2002, PBGC officials have testified 19 times before 
several different committees on issues such as the status of PBGC's 
financial condition. Further, GAO, the Congressional Budget Office, and 
the Congressional Research Service have issued a variety of reports and 
testimonies on PBGC financial and operational matters. However, PBGC 
does not have reporting requirements applied to other government 
corporations for providing additional information to Congress. For 
example, the Millennium Challenge Corporation and the Commodity Credit 
Corporation are required to notify Congress prior to conducting certain 
financial transactions. The advisory committee of the Federal Deposit 
Insurance Corporation formally reports to its board of directors, while 
the Export-Import Bank of the United States' advisory committee 
formally reports to its board and Congress each year on matters related 
to their respective organizations. In addition, the advisory boards of 
other government entities with retirement-related responsibilities-- 
such as the Social Security Administration, the Railroad Retirement 
Board, and the Federal Retirement Thrift Investment Board--provide 
reports to their overseeing bodies. 

To ensure that recently identified management and financial challenges 
facing PBGC are shared with those newly appointed, we are making a 
recommendation that PBGC provide Office of Inspector General and GAO 
reports on the corporation's financial and management challenges to the 
newly appointed board members, board representatives, and director so 
that they can take appropriate action as needed. In response to our 
draft report, PBGC's director stated that PBGC agreed with our 
recommendation. 

Background: 

Congress passed the Employee Retirement Income Security Act of 1974 
(ERISA) to protect the interests of participants and beneficiaries of 
private sector employee benefit plans. [Footnote 3] Before the 
enactment of ERISA, few rules governed the funding of defined benefit 
pension plans,[Footnote 4] and participants had no guarantee that they 
would receive promised benefits. ERISA established PBGC to insure 
private sector plan participants' benefits and to encourage the 
continuation and maintenance of private sector defined benefit pension 
plans by providing timely and uninterrupted payment of pension 
benefits.[Footnote 5] 

PBGC is a wholly owned government corporation--that is, the federal 
government does not share ownership interests with nonfederal entities, 
and PBGC is subject to requirements under the Government Corporation 
Control Act of 1945, as amended, such as annual budgets, audits, and 
management reports.[Footnote 6] According to public administration 
experts, a government corporation is appropriate for the administration 
of government programs that are: 

* predominately of a business nature; 

* produce revenue and are potentially self-sustaining; 

* involve a large number of business-type transaction with the public, 
and: 

* require greater budget flexibility than a government department or 
agency. 

The United States government is not liable for any obligation or 
liability incurred by PBGC.[Footnote 7] The corporation is funded 
through insurance premiums from employers that sponsor insured pension 
plans, as well as assets from terminated pension plans and investment 
income. 

PBGC insures certain private sector defined benefit plans through its 
single-employer and multiemployer insurance programs.[Footnote 8] 
Through its single-employer insurance program, PBGC paid nearly $4.1 
billion in benefits to 622,000 participants and beneficiaries across 
the United States in fiscal year 2006 (see fig. 1). The geographic 
breakdown of PBGC-insured participants largely matches the overall 
population. Appendix II includes information on PBGC's single-employer 
plans by each U.S. state and territory, as shown in figure 1. 

Figure 1: Number of Payees Receiving Single-Employer Program Benefits 
from PBGC, Fiscal Year 2006: 

[See PDF for image] 

This figure is a map of the United States depicting the number of 
payees receiving single-employer program benefits from PBGC, fiscal 
year 2006 in the following five categories: 

0-9,999: 
Alaska: 
Arizona: 
Arkansas: 
Colorado: 
Connecticut: 
District of Columbia: 
Hawaii: 
Idaho: 
Iowa: 
Kansas: 
Kentucky: 
Louisiana: 
Maine: 
Minnesota: 
Mississippi: 
Montana: 
Nebraska: 
Nevada: 
New Hampshire: 
New Jersey: 
New Mexico: 
North Dakota: 
Oklahoma: 
Oregon: 
Puerto Rico: 
Rhode Island: 
South Dakota: 
Utah: 
Vermont: 
Washington: 
Wisconsin: 
Wyoming. 

10,000-19,999: 
Alabama: 
Delaware: 
Georgia: 
Maryland: 
Massachusetts: 
Missouri: 
South Carolina: 
Tennessee: 
Texas: 
Virginia: 
West Virginia. 

20,000-29,999: 
Indiana: 
Michigan: 
North Carolina. 

30,000-39,999: 
California: 
Illinois: 
New York. 

40,000 and above: 
Florida: 
Ohio: 
Pennsylvania. 

Source: GAO analysis; Map, Map Resources. 

[End of figure] 

PBGC is governed by a board of directors that consists of the 
Secretaries of the Treasury, Labor, and Commerce, with the Secretary of 
Labor serving as chair of the board.[Footnote 9] Prior to the passage 
of the Pension Protection Act of 2006,[Footnote 10] ERISA provided the 
Secretary of Labor with responsibility for administering PBGC's 
operations, personnel, and budget. The Secretary has historically 
delegated the responsibility for administering PBGC to an executive 
director. The Pension Protection Act replaced the chair of the board as 
PBGC's administrator with a Senate-confirmed director. The corporation 
is also aided by a seven-member Advisory Committee appointed by the 
President to represent the interest of labor, employees, and the 
general public.[Footnote 11] This committee has an advisory role, but 
has no statutory authority to set PBGC policy or conduct formal 
oversight. PBGC also has an Office of Inspector General that reports to 
the board through the chair. With 22 staff, the Office of Inspector 
General generally conducts audits, inspections, and investigations of 
PBGC's programs and operations in order to promote program 
administration effectiveness and deter waste, fraud, and abuse of PBGC 
resources. 

Revised Bylaws Improve Policy Direction and Oversight, but Board 
Structure Continues to Limit Attention and Oversight: 

PBGC's board has taken steps to improve its governance structure by 
revising the corporation's bylaws. PBGC also contracted with a 
consulting firm to assist the board in its review of alternative 
corporate governance structures. However, the board consists of three 
cabinet secretaries, a fact that limits their ability to provide policy 
direction and oversight. PBGC may also face additional challenges as 
the board members, their representatives, and director will all likely 
change with the upcoming presidential transition, thus limiting the 
corporation's institutional knowledge. 

PBGC Has Taken Steps to Address Concerns: 

PBGC has taken steps to improve its policy direction and oversight 
through the revision of its bylaws. In our July 2007 report, we 
recommended PBGC's board of directors establish formal guidelines that 
articulate the authorities of the board, the Department of Labor, other 
board members, and their respective representatives.[Footnote 12] As 
part of its May 2008 bylaw revision, the board of directors more 
clearly defined the roles and responsibilities of its members, 
representatives, and director. For example, the new bylaws state that 
the board is responsible for establishing and overseeing the policies 
of the corporation. The new bylaws explicitly outline the board's 
responsibilities, which include approval of policy matters 
significantly affecting the pension insurance program or its 
stakeholders; approval of the corporation's investment policy; and 
review of certain management and Inspector General reports. In 
addition, the new bylaws explicitly define the role and 
responsibilities of the director and the corporation's senior officer 
positions. See appendix III to view PBGC's new bylaws. 

Our July 2007 report also asked Congress to consider restructuring the 
board of directors to appoint additional members of diverse backgrounds 
who possess knowledge and expertise useful to PBGC's responsibilities 
and can provide the attention needed for strong corporate oversight. In 
response to these findings, PBGC contracted with a consulting firm to 
review governance models and provide a background report to assist the 
board in its review of alternative corporate governance structures. The 
consulting firm's final report describes the advantages and 
disadvantages of the corporate board structures and governance 
practices of other government corporations and select private sector 
companies, and concludes that there are several viable alternatives for 
PBGC's governance structure and practices. 

Board's Limited Ability to Provide Policy Direction and Oversight 
Persists: 

Our July 2007 report found that PBGC's board has limited time and 
resources to provide policy direction and oversight and has not 
established procedures and mechanisms to monitor PBGC operations. 
Although board members have met more frequently since 2003, the three 
cabinet secretaries who compose the board have numerous other 
responsibilities. Because of their responsibilities and the small size 
of the board, it is difficult for the board to establish and manage 
oversight mechanisms, such as the use of standing committees--which are 
common mechanisms used by both government and private corporate boards. 
According to board officials, the board representatives, assisted by 
their staff, undertake some of the oversight functions that could be 
conducted by standing committees.[Footnote 13] Other government 
corporations, such as the Federal Deposit Insurance Corporation (FDIC), 
the Overseas Private Investment Corporation (OPIC), and the National 
Railroad Passenger Corporation (Amtrak), have established standing 
committees to conduct certain oversight functions. For example, FDIC's 
board of directors established standing committees, such as the Case 
Review Committee and the Audit Committee, to conduct certain oversight 
functions. 

Instead, PBGC's board continues to rely on the Inspector General and 
PBGC's management oversight committees to ensure that PBGC is operating 
effectively.[Footnote 14] However, our prior work found that while the 
board requires the Inspector General to brief it at its semiannual 
meetings, there were no formal protocols requiring the Inspector 
General to routinely meet with the board or its representatives and 
staff. Consequently, when the board and its representatives likely 
change, it is unclear whether the board would be aware of this informal 
protocol. Further, we reported that the board relies on PBGC's 
executive committees and working groups for monitoring and reviewing 
PBGC's operations. However, these committees and working groups are 
neither independent of the PBGC director nor required to formally 
report all matters to the board.[Footnote 15] 

PBGC may also be exposed to challenges as the board, its 
representatives, and director will likely change with the upcoming 
presidential transition in January 2009, thus limiting institutional 
knowledge of the challenges facing the corporation. As we noted in 
2007, because PBGC's board is composed of cabinet secretaries, PBGC 
board members, their representatives, and the director typically change 
with each administration. Other government corporations' authorizing 
statutes--such as OPIC's--have established board structures with 
staggered terms for their directors, possibly avoiding gaps in their 
organization's institutional knowledge. PBGC management has experienced 
partial leadership transitions in recent years, and in anticipation of 
the forthcoming complete leadership change, PBGC is developing 
additional materials to include in its official transition package for 
newly appointed officials. This new information includes information on 
standards of ethical conduct, appointments, compensation levels, and 
information on presidential transitions. While PBGC typically provides 
newly appointed members, representatives, and directors with 
information on its operations and financial position, PBGC's Office of 
Inspector General and our work recently identified additional financial 
and operational challenges facing the corporation. This additional 
information could help the new board members and their representatives 
better understand the vulnerabilities and challenges facing the 
corporation. 

Congress Has Overseen PBGC in Several Ways, but Some Other Government 
Corporations Have Additional Reporting Requirements: 

Congressional oversight of PBGC in recent years has ranged from formal 
congressional hearings to the use of its support agencies, such as GAO, 
the Congressional Budget Office (CBO), and the Congressional Research 
Service (CRS). However, unlike some other government corporations, PBGC 
does not have certain reporting requirements for providing additional 
information to Congress. In general, our prior work has shown that 
congressional oversight is designed to fulfill a number of purposes, 
including but not limited to ensuring executive compliance with 
legislative intent; improving the efficiency, effectiveness, and 
economy of government operations; evaluating program performance; and 
conducting investigations. 

Congress Has Overseen PBGC in a Variety of Ways: 

Since 2002, PBGC officials have testified 19 times before various 
congressional committees--mostly on broad issues related to the status 
of the private sector defined benefit pension policy and its effect on 
PBGC (see table 1). For example, in 2005, the PBGC director testified 
before the House Committee on Transportation and Infrastructure's 
Subcommittee on Aviation regarding pension challenges facing the 
airline industry. The director's testimony discussed the possible 
effects such defaults would have on the defined benefit pension 
industry and the financial position of the corporation. Congress also 
recently began exercising oversight of PBGC through the confirmation 
process of PBGC's director. With the passage of the Pension Protection 
Act of 2006, PBGC's director now must be confirmed by the Senate. 
[Footnote 16] During the confirmation hearing conducted in 2007, 
members expressed concerns about key defined benefit pension policy 
issues and PBGC's financial condition, as well as sought the nominee's 
thoughts on addressing weaknesses in PBGC's governance structure, such 
as the concerns we raised about the corporate governance practices. 
[Footnote 17] 

Table 1: PBGC Appearances before Congress since 2002: 

Date: Feb. 27, 2002; 
Congressional committee: Committee on Finance; United States Senate; 
Subject of hearing or testimony: Enron Corporation's defined benefit 
pension plan. 

Date: June 20, 2002; 
Congressional committee: Committee on Ways and Means; Subcommittee on 
Oversight; House of Representatives; 
Subject of hearing or testimony: The state of defined benefit pension 
system. 

Date: Jan. 14, 2003; 
Congressional committee: Committee on Appropriations; Subcommittee on 
Labor, Health and Human Services, and Education; United States Senate; 
Subject of hearing or testimony: Restoration of U.S. Airways pension 
plans. 

Date: Mar. 11, 2003; 
Congressional committee: Committee on Finance; United States Senate; 
Subject of hearing or testimony: The state of defined benefit pension 
system. 

Date: Apr. 30, 2003; 
Congressional committee: Committee on Ways and Means; Subcommittee on 
Selected Revenue Measures; House of Representatives; 
Subject of hearing or testimony: Defined benefit pension plan funding. 

Date: Sept. 4, 2003; 
Congressional committee: Committee on Education and the Workforce; 
House of Representatives; 
Subject of hearing or testimony: Defined benefit pension plan funding 
and the health of PBGC. 

Date: Sept. 15, 2003; 
Congressional committee: Committee on Governmental Affairs; 
Subcommittee on Financial Management, the Budget and International 
Security; United States Senate; 
Subject of hearing or testimony: Defined benefit pension plan funding 
and the health of PBGC. 

Date: Oct. 14, 2003; 
Congressional committee: Special Committee on Aging; United States 
Senate; 
Subject of hearing or testimony: The financial health of PBGC and 
future of defined benefit pension plans. 

Date: Oct. 7, 2004; 
Congressional committee: Committee on Science, Commerce and 
Transportation; United States Senate; 
Subject of hearing or testimony: The financial and policy challenges 
facing the private defined benefit pension system and PBGC's federal 
pension insurance program. 

Date: Mar. 1, 2005; 
Congressional committee: Committee on Finance; United States Senate; 
Subject of hearing or testimony: Defined benefit pension plan funding 
and the health of PBGC. 

Date: Mar. 2, 2005; 
Congressional committee: Committee on Government Reform; Subcommittee 
Government Management, Finance and Accountability; House of 
Representatives; 
Subject of hearing or testimony: Defined benefit pension plan funding 
and the health of PBGC. 

Date: Mar. 2, 2005; 
Congressional committee: Committee on Education and Workforce; House of 
Representatives; 
Subject of hearing or testimony: Defined benefit pension plan funding 
and the health of PBGC. 

Date: Mar. 8, 2005; 
Congressional committee: Committee on Ways and Means; Subcommittee on 
Select Revenue Measures; House of Representatives; 
Subject of hearing or testimony: Defined benefit pension plan funding 
and the health of PBGC. 

Date: Apr. 26, 2005; 
Congressional committee: Committee on Health, Education, Labor and 
Pensions; Subcommittee on Retirement Security and Aging; United States 
Senate; 
Subject of hearing or testimony: Defined benefit pension plan funding 
and the health of PBGC. 

Date: June 7, 2005; 
Congressional committee: Committee on Finance; United States Senate; 
Subject of hearing or testimony: Private pension reform and the 
Administration's proposals. 

Date: June 15, 2005; 
Congressional committee: Committee on Budget; United States Senate; 
Subject of hearing or testimony: Defined benefit pension plan funding 
and the health of PBGC. 

Date: June 22, 2005; 
Congressional committee: Committee on Transportation and 
Infrastructure; Subcommittee on Aviation; House of Representatives; 
Subject of hearing or testimony: Pension challenges facing the airline 
industry and role of PBGC. 

Date: July 25, 2007; 
Congressional committee: Committee on Finance; United States Senate; 
Subject of hearing or testimony: Confirmation of PBGC Director. 

Date: Sept. 6, 2007; 
Congressional committee: Committee on Health, Education, Labor, and 
Pensions; United States Senate; 
Subject of hearing or testimony: Confirmation of PBGC Director. 

Source: PBGC. 

[End of table] 

Beyond formal congressional hearings, PBGC staff told us that they 
frequently discuss pension policy matters with congressional staff. In 
addition, PBGC must annually submit reports to Congress on its prior 
fiscal year's financial and operational matters, which include 
information on PBGC's financial statements, internal controls, and 
compliance with certain laws and regulations.[Footnote 18] For example, 
the Pension Protection Act of 2006 requires that PBGC provide a 
comparison of the average return on investment earned with respect to 
asset investments by the corporation, which PBGC includes in its annual 
report. 

Through its support agencies--GAO, the Congressional Budget Office, and 
the Congressional Research Service--Congress has also provided 
oversight and reviewed PBGC. Specifically, Congress has asked GAO to 
conduct assessments of policy, management, and the financial condition 
of PBGC. For example, we conducted more than 10 reviews of PBGC over 
the past 5 years, including assessments related to PBGC's 2005 
corporate reorganization and weaknesses in its governance structure, 
human capital management, and contracting practices. Our work also 
raised concerns about PBGC's financial condition and the state of the 
defined benefit industry. In addition, CBO has published nine specific 
reports on PBGC since 2005. [Footnote 19] For example, in April 2008, 
CBO reported that PBGC's investment policy is likely to produce higher 
returns over the long run, but noted the new strategy increases the 
risk that PBGC will not have sufficient assets to cover retirees' 
benefit payments when the economy and financial markets are weak. 
[Footnote 20] Further, CRS has published eight studies related to PBGC 
since 2006. Appendix IV includes a list of selected GAO, CBO, and CRS 
reports and testimonies related to PBGC. 

Some Government Corporations Have Additional Congressional Reporting 
Requirements: 

Some government corporations have additional reporting requirements for 
notifying Congress of significant actions. The Millennium Challenge 
Corporation is required to formally notify the appropriate 
congressional committees 15 days prior to the allocation or transfer of 
funds related to the corporation's activities.[Footnote 21] The 
Commodity Credit Corporation is subject to a similar requirement, which 
obliges the Secretary of Agriculture to alert the Committee on 
Agriculture, Nutrition, and Forestry of the Senate and the Committee on 
Agriculture of the House of Representatives prior to making adjustments 
to a certain price support program.[Footnote 22] The Overseas Private 
Investment Corporation is required to submit a detailed report to the 
Committee on Foreign Relations of the Senate and the Committee on 
Foreign Affairs of the House of Representatives at least 60 days prior 
to issuing, among other things, political risk insurance for losses due 
to business interruption for the first time.[Footnote 23] These 
examples demonstrate how Congress has required additional reporting 
requirements for certain activities conducted by government 
corporations. While PBGC generally has no requirements to formally 
notify Congress prior to taking significant financial or operational 
actions, PBGC officials said that they informally notify Congress prior 
to certain policy shifts. For example, in fiscal year 2008, PBGC 
officials met with congressional staff before modifying the investment 
policy to decrease the corporation's fixed-income asset investments. In 
addition to its annual reporting requirements, PBGC is required to 
report proposals for certain premium rate revisions, including reasons 
for such revisions, to specific congressional committees; however, 
these premium rate revisions are not considered effective until 30 days 
after enactment of a law approving them.[Footnote 24] 

Like other government corporations, PBGC has an advisory committee. 
PBGC's advisory committee is charged with advising the corporation on 
its policies and procedures related to the corporation's appointment of 
trustees in termination proceedings, investments of monies, whether 
terminated plans should be liquidated immediately or continued in 
operation, and any other matters the corporation may request. Unlike 
PBGC's advisory committee, the advisory boards or committees of other 
government corporations--such as the Export-Import Bank and FDIC--are 
subject to the Federal Advisory Committee Act[Footnote 25] and some 
submit formal reports to their board chair and directors (see table 2). 
In contrast, PBGC's advisory committee is not subject to the Federal 
Advisory Committee Act. According to PBGC officials, the corporation is 
exempt because of the proprietary nature of its work. PBGC's advisory 
committee typically reports only to the director, although 
representatives of PBGC's board members frequently attend advisory 
committee meetings and officials said that the committee can submit 
concerns to the board if it believes it is warranted. 

Table 2: Examples of Advisory Committees at Government Corporations: 

Federal government corporation: Export-Import Bank of the United 
States; Advisory committee: 
Advisory Committee of the Export-Import Bank of the United States; 
Reports to: Board of Directors and Congress; 
Number of members: 17; 
Subject to Federal Advisory Committee Act: Yes. 

Federal government corporation: Saint Lawrence Seaway Development 
Corporation; 
Advisory committee: Advisory Board of the Saint Lawrence Seaway 
Development Corporation; 
Reports to: Administrator; 
Number of members: 5; 
Subject to Federal Advisory Committee Act: Yes. 

Federal government corporation: Federal Deposit Insurance Corporation; 
Advisory committee: 
Advisory Committee on Economic Inclusion; 
Reports to: Chairman of the board; 
Number of members: Not to exceed 20; 
Subject to Federal Advisory Committee Act: Yes. 

Federal government corporation: Pension Benefit Guaranty Corporation; 
Advisory committee: Advisory Committee of the Pension Benefit Guaranty 
Corporation; 
Reports to: Director; 
Number of members: 7; 
Subject to Federal Advisory Committee Act: No. 

Source: GAO analysis. 

[End of table] 

Beyond reporting to the chairman of its board, the Export-Import Bank's 
advisory committee is also required to submit an annual report to 
Congress on the extent to which the Export-Import Bank is providing 
competitive financing to expand U.S. exports, along with suggestions 
for improvements. In addition to government corporations, some 
government agencies with retirement-related responsibilities--such as 
the Social Security Administration (SSA), the Railroad Retirement 
Board, and the Federal Retirement Thrift Investment Board--have 
advisory committees as part of their governance structures, which 
annually report to their respective overseeing bodies. For example, 
when Congress established SSA as a separate and distinct agency from 
the Department of Health and Human Services, it also established an 
independent seven-member bipartisan Advisory Board to advise the 
President, Congress, and the commissioner of Social Security on 
respective policy issues. 

Conclusions: 

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. Despite PBGC's efforts to improve its bylaws, the three-member 
board of directors is still one of the smallest and least diverse of 
any government corporation. Other government corporations' governance 
structures include oversight mechanisms, such as standing committees, 
and additional reporting requirements to conduct certain oversight 
functions and assist their boards of directors. While PBGC's board 
should be restructured, additional reporting requirements, like some 
government corporations have, may not be appropriate for PBGC given the 
proprietary nature of its financial work; thus, any reporting changes 
would need to be carefully considered. 

The limitations of the board structure will become even more apparent 
in the coming months as the board, its representatives, and the 
corporation's director will likely be replaced with a new presidential 
administration. Because board members and their representatives serve 
by virtue of their positions in the federal government, there is no 
assurance that these individuals will have the needed expertise to 
understand the corporation's business or financial vulnerabilities. 
Without adequate information and preparation, this transition could 
limit not only the progress made by the current board, its 
representatives, and director, but may also curtail the corporation's 
ability to insure and deliver retirement benefits to millions of 
Americans that rely on the corporation. 

Recommendation for Executive Action: 

To ensure that recently identified management and financial challenges 
facing PBGC are shared with those newly appointed, we recommend that 
PBGC provide Office of Inspector General and GAO reports on the 
corporation's financial and management challenges to the newly 
appointed board members, board representatives, and director so that 
they can take appropriate action as needed. 

Agency Comments and Our Evaluation: 

We obtained written comments on a draft report from PBGC's director, 
which are reproduced in appendix V. In addition, the Departments of the 
Treasury, Labor, and Commerce provided joint technical comments, which 
were incorporated into the report where appropriate. 

In response to our draft report, the PBGC director stated that PBGC 
prepares substantial in-depth briefing materials on its operational 
issues for incoming administrations. The director agreed with our 
recommendation, stating that PBGC will ensure that the transition 
materials provided to those newly appointed will also include pertinent 
PBGC Office of Inspector General and GAO reports. Further, the director 
stated that PBGC will continue to work in concert with the board to 
provide oversight information necessary to address the important issues 
that they confront in providing pension security to Americans. 

We are sending copies of this report to the Secretaries of the 
Treasury, Labor, and Commerce, as well as the PBGC director and other 
interested parties. We will also make copies available to others on 
request. If you or your staff has any questions concerning this report, 
please contact me on (202) 512-7215 or [email protected]. Contact 
points for our Office of Congressional Relations and Public Affairs may 
be found on the last page of this report. GAO staff who made key 
contributions to this report are listed in appendix VI. 

Signed by: 

Barbara D. Bovbjerg: 
Director, Education, Workforce, and Income Security Issues: 

[End of section] 

Appendix I: Scope and Methodology: 

To identify the steps that the Pension Benefit Guaranty Corporation 
(PBGC) has taken to improve its governance structure, we reviewed our 
work issued in July 2007, as well as collected and reviewed documents 
related to PBGC's bylaws, which were last published in May 2008. 
[Footnote 26] We reviewed reports on PBGC's organizational structure 
and financial condition. We also identified provisions of the Employee 
Retirement and Income Security Act of 1974,[Footnote 27] the Pension 
Protection Act of 2006,[Footnote 28] and chapter 91 of the U.S. Code, 
which is commonly known as the Government Corporation Control Act 
(GCCA),[Footnote 29] that outline the authority of PBGC's board of 
directors as well as the administrative responsibilities of PBGC's 
director. To understand the board of directors', their 
representatives', and PBGC's director's role, we reviewed documentation 
related to the board members' activities to identify what types of 
actions the board members had considered and taken. 

To determine how Congress exercises oversight of PBGC, we identified 
the number of times PBGC officials testified before Congress since 
2002, and reviewed the issues discussed at each formal hearing. 
Further, we reviewed the work of the Congressional Budget Office, the 
Congressional Research Service, PBGC's Office of Inspector General, and 
our work on PBGC's financial and management challenges. To determine 
the oversight mechanisms and reporting requirements that exist at other 
government corporations, we collected information on select federal 
government corporations that we identified in our July 2007 work, which 
are listed under the Government Corporation Control Act of 1945, as 
amended, and have similar missions or designations to those of PBGC. We 
reviewed information on the following government corporations: 

* Commodity Credit Corporation; 

* Export-Import Bank of the United States; 

* Federal Crop Insurance Corporation; 

* Federal Deposit Insurance Corporation; 

* Federal Financing Bank; 

* Federal Prison Industries (UNICOR); 

* Financing Corporation; 

* Government National Mortgage Association; 

* Millennium Challenge Corporation; 

* National Railroad Passenger Corporation (Amtrak); 

* Overseas Private Investment Corporation; 

* Resolution Funding Corporation; 

* Saint Lawrence Seaway Development Corporation; 

* Tennessee Valley Authority, and; 

* United States Postal Service. 

We also reviewed government agencies with retirement-related 
responsibilities to determine what other oversight mechanisms may 
exist; the agencies include the Social Security Administration, the 
Railroad Retirement Board, and the Federal Retirement Thrift Investment 
Board. Moreover, we met with officials from PBGC and the Department of 
Labor. 

[End of section] 

Appendix II: Selected PBGC Single-Employer Plan Pension Data by State: 

State: Alabama; 
Claims 1975-2006: Plans: 17; 
Claims 1975-2006: Claims: $23,807,269; 
Coverage 2005: Plans: 248; 
Coverage 2005: Participants: 415,872; 
Benefits Paid 2006: Payees: 12,116; 
Benefits Paid 2006: Payments: $44,588,012; 
Benefits Paid 2006: Mean Monthly Pension: $295. 

State: Alaska; 
Claims 1975-2006: Plans: 4; 
Claims 1975-2006: Claims: $1,171,886; 
Coverage 2005: Plans: 26; 
Coverage 2005: Participants: 86,673; 
Benefits Paid 2006: Payees: 214; 
Benefits Paid 2006: Payments: $1,789,662; 
Benefits Paid 2006: Mean Monthly Pension: $732. 

State: Arizona; 
Claims 1975-2006: Plans: 24; 
Claims 1975-2006: Claims: $10,460,945; 
Coverage 2005: Plans: 484; 
Coverage 2005: Participants: 545,397; 
Benefits Paid 2006: Payees: 6,937; 
Benefits Paid 2006: Payments: $56,848,787; 
Benefits Paid 2006: Mean Monthly Pension: $677. 

State: Arkansas; 
Claims 1975-2006: Plans: 12; 
Claims 1975-2006: Claims: $9,578,594; 
Coverage 2005: Plans: 127; 
Coverage 2005: Participants: 165,700; 
Benefits Paid 2006: Payees: 3,377; 
Benefits Paid 2006: Payments: $12,287,719; 
Benefits Paid 2006: Mean Monthly Pension: $300. 

State: California; 
Claims 1975-2006: Plans: 187; 
Claims 1975-2006: Claims: $978,952,261; 
Coverage 2005: Plans: 3,848; 
Coverage 2005: Participants: 3,233,642; 
Benefits Paid 2006: Payees: 31,583; 
Benefits Paid 2006: Payments: $287,934,252; 
Benefits Paid 2006: Mean Monthly Pension: $762. 

State: Colorado; 
Claims 1975-2006: Plans: 17; 
Claims 1975-2006: Claims: $202,019,557; 
Coverage 2005: Plans: 327; 
Coverage 2005: Participants: 483,819; 
Benefits Paid 2006: Payees: 7,672; 
Benefits Paid 2006: Payments: $87,626,865; 
Benefits Paid 2006: Mean Monthly Pension: $987. 

State: Connecticut; 
Claims 1975-2006: Plans: 115; 
Claims 1975-2006: Claims: $339,608,195; 
Coverage 2005: Plans: 785; 
Coverage 2005: Participants: 504,152; 
Benefits Paid 2006: Payees: 7,081; 
Benefits Paid 2006: Payments: $32,920,689; 
Benefits Paid 2006: Mean Monthly Pension: $379. 

State: Delaware; 
Claims 1975-2006: Plans: 8; 
Claims 1975-2006: Claims: $4,878,368; 
Coverage 2005: Plans: 130; 
Coverage 2005: Participants: 138,983; 
Benefits Paid 2006: Payees: 1,273; 
Benefits Paid 2006: Payments: $8,528,959; 
Benefits Paid 2006: Mean Monthly Pension: $544. 

State: District of Columbia; 
Claims 1975-2006: Plans: 15; 
Claims 1975-2006: Claims: $12,606,511; 
Coverage 2005: Plans: 242; 
Coverage 2005: Participants: 83,384; 
Benefits Paid 2006: Payees: 335; 
Benefits Paid 2006: Payments: $1,749,182; 
Benefits Paid 2006: Mean Monthly Pension: $430. 

State: Florida; 
Claims 1975-2006: Plans: 77; 
Claims 1975-2006: Claims: $369,603,170; 
Coverage 2005: Plans: 866; 
Coverage 2005: Participants: 2,065,553; 
Benefits Paid 2006: Payees: 41,860; 
Benefits Paid 2006: Payments: $298,574,227; 
Benefits Paid 2006: Mean Monthly Pension: $580. 

State: Georgia; 
Claims 1975-2006: Plans: 61; 
Claims 1975-2006: Claims: $601,098,985; 
Coverage 2005: Plans: 511; 
Coverage 2005: Participants: 744,446; 
Benefits Paid 2006: Payees: 19,217; 
Benefits Paid 2006: Payments: $86,596,390; 
Benefits Paid 2006: Mean Monthly Pension: $365. 

State: Hawaii; 
Claims 1975-2006: Plans: 22; 
Claims 1975-2006: Claims: $142,207,993; 
Coverage 2005: Plans: 213; 
Coverage 2005: Participants: 119,957; 
Benefits Paid 2006: Payees: 3,052; 
Benefits Paid 2006: Payments: $26,084,695; 
Benefits Paid 2006: Mean Monthly Pension: $920. 

State: Idaho; 
Claims 1975-2006: Plans: 7; 
Claims 1975-2006: Claims: $12,709,939; 
Coverage 2005: Plans: 63; 
Coverage 2005: Participants: 142,722; 
Benefits Paid 2006: Payees: 1,649; 
Benefits Paid 2006: Payments: $11,769,270; 
Benefits Paid 2006: Mean Monthly Pension: $585. 

State: Illinois; 
Claims 1975-2006: Plans: 254; 
Claims 1975-2006: Claims: $8,945,225,727; 
Coverage 2005: Plans: 1,745; 
Coverage 2005: Participants: 1,746,522; 
Benefits Paid 2006: Payees: 33,912; 
Benefits Paid 2006: Payments: $285,817,417; 
Benefits Paid 2006: Mean Monthly Pension: $676. 

State: Indiana; 
Claims 1975-2006: Plans: 105; 
Claims 1975-2006: Claims: $1,406,771,939; 
Coverage 2005: Plans: 495; 
Coverage 2005: Participants: 867,713; 
Benefits Paid 2006: Payees: 24,614; 
Benefits Paid 2006: Payments: $207,556,275; 
Benefits Paid 2006: Mean Monthly Pension: $660. 

State: Iowa; 
Claims 1975-2006: Plans: 39; 
Claims 1975-2006: Claims: $95,456,903; 
Coverage 2005: Plans: 353; 
Coverage 2005: Participants: 428,284; 
Benefits Paid 2006: Payees: 6,107; 
Benefits Paid 2006: Payments: $21,091,686; 
Benefits Paid 2006: Mean Monthly Pension: $274. 

State: Kansas; 
Claims 1975-2006: Plans: 24; 
Claims 1975-2006: Claims: $42,691,574; 
Coverage 2005: Plans: 155; 
Coverage 2005: Participants: 258,904; 
Benefits Paid 2006: Payees: 2,506; 
Benefits Paid 2006: Payments: $16,018,743; 
Benefits Paid 2006: Mean Monthly Pension: $508. 

State: Kentucky; 
Claims 1975-2006: Plans: 24; 
Claims 1975-2006: Claims: $99,638,280; 
Coverage 2005: Plans: 275; 
Coverage 2005: Participants: 616,310; 
Benefits Paid 2006: Payees: 5,254; 
Benefits Paid 2006: Payments: $24,313,046; 
Benefits Paid 2006: Mean Monthly Pension: $368. 

State: Louisiana;
Claims 1975-2006: Plans: 25; 
Claims 1975-2006: Claims: $75,296,341; 
Coverage 2005: Plans: 227; 
Coverage 2005: Participants: 493,403; 
Benefits Paid 2006: Payees: 4,747; 
Benefits Paid 2006: Payments: $24,829,486; 
Benefits Paid 2006: Mean Monthly Pension: $420. 

State: Maine; 
Claims 1975-2006: Plans: 13; 
Claims 1975-2006: Claims: $9,781,410; 
Coverage 2005: Plans: 99; 
Coverage 2005: Participants: 151,088; 
Benefits Paid 2006: Payees: 2,018; 
Benefits Paid 2006: Payments: $8,208,993; 
Benefits Paid 2006: Mean Monthly Pension: $333. 

State: Maryland; 
Claims 1975-2006: Plans: 69; 
Claims 1975-2006: Claims: $86,663,529; 
Coverage 2005: Plans: 566; 
Coverage 2005: Participants: 728,300; 
Benefits Paid 2006: Payees: 18,141; 
Benefits Paid 2006: Payments: $168,551,790; 
Benefits Paid 2006: Mean Monthly Pension: $738. 

State: Massachusetts; 
Claims 1975-2006: Plans: 204; 
Claims 1975-2006: Claims: $528,083,138; 
Coverage 2005: Plans: 958; 
Coverage 2005: Participants: 831,350; 
Benefits Paid 2006: Payees: 13,815; 
Benefits Paid 2006: Payments: $94,423,951; 
Benefits Paid 2006: Mean Monthly Pension: $545. 

State: Michigan; 
Claims 1975-2006: Plans: 295; 
Claims 1975-2006: Claims: $598,758,451; 
Coverage 2005: Plans: 1,129; 
Coverage 2005: Participants: 1,490,039; 
Benefits Paid 2006: Payees: 25,220; 
Benefits Paid 2006: Payments: $149,174,690; 
Benefits Paid 2006: Mean Monthly Pension: $476. 

State: Minnesota; 
Claims 1975-2006: Plans: 44; 
Claims 1975-2006: Claims: $192,710,240; 
Coverage 2005: Plans: 500; 
Coverage 2005: Participants: 686,475; 
Benefits Paid 2006: Payees: 8,558; 
Benefits Paid 2006: Payments: $59,500,618; 
Benefits Paid 2006: Mean Monthly Pension: $548. 

State: Mississippi; 
Claims 1975-2006: Plans: 11; 
Claims 1975-2006: Claims: $21,097,449; 
Coverage 2005: Plans: 116; 
Coverage 2005: Participants: 234,496; 
Benefits Paid 2006: Payees: 3,892; 
Benefits Paid 2006: Payments: $13,404,305; 
Benefits Paid 2006: Mean Monthly Pension: $282. 

State: Missouri; 
Claims 1975-2006: Plans: 67; 
Claims 1975-2006: Claims: $293,981,974; 
Coverage 2005: Plans: 421; 
Coverage 2005: Participants: 722,134; 
Benefits Paid 2006: Payees: 12,276; 
Benefits Paid 2006: Payments: $78,685,377; 
Benefits Paid 2006: Mean Monthly Pension: $509. 

State: Montana; 
Claims 1975-2006: Plans: 3; 
Claims 1975-2006: Claims: $207,534; 
Coverage 2005: Plans: 41; 
Coverage 2005: Participants: 118,228; 
Benefits Paid 2006: Payees: 425; 
Benefits Paid 2006: Payments: $3,440,334; 
Benefits Paid 2006: Mean Monthly Pension: $668. 

State: Nebraska; 
Claims 1975-2006: Plans: 4; 
Claims 1975-2006: Claims: $7,328,458; 
Coverage 2005: Plans: 154; 
Coverage 2005: Participants: 256,808; 
Benefits Paid 2006: Payees: 1,212; 
Benefits Paid 2006: Payments: $6,155,180; 
Benefits Paid 2006: Mean Monthly Pension: $410. 

State: Nevada; 
Claims 1975-2006: Plans: 8; 
Claims 1975-2006: Claims: $594,387; 
Coverage 2005: Plans: 153; 
Coverage 2005: Participants: 189,526; 
Benefits Paid 2006: Payees: 3,340; 
Benefits Paid 2006: Payments: $35,652,807; 
Benefits Paid 2006: Mean Monthly Pension: $906. 

State: New Hampshire; 
Claims 1975-2006: Plans: 25; 
Claims 1975-2006: Claims: $34,769,380; 
Coverage 2005: Plans: 120; 
Coverage 2005: Participants: 194,990;
Benefits Paid 2006: Payees: 3,028; 
Benefits Paid 2006: Payments: $18,325,844; 
Benefits Paid 2006: Mean Monthly Pension: $487. 

State: New Jersey; 
Claims 1975-2006: Plans: 196; 
Claims 1975-2006: Claims: $330,487,687; 
Coverage 2005: Plans: 1,682; 
Coverage 2005: Participants: 1,185,568; 
Benefits Paid 2006: Payees: 12,923; 
Benefits Paid 2006: Payments: $67,369,924; 
Benefits Paid 2006: Mean Monthly Pension: $419. 

State: New Mexico; 
Claims 1975-2006: Plans: 7; 
Claims 1975-2006: Claims: $10,380,110; 
Coverage 2005: Plans: 113; 
Coverage 2005: Participants: 89,021; 
Benefits Paid 2006: Payees: 1,347; 
Benefits Paid 2006: Payments: $7,922,268; 
Benefits Paid 2006: Mean Monthly Pension: $491. 

State: New York; 
Claims 1975-2006: Plans: 481; 
Claims 1975-2006: Claims: $3,303,673,171; 
Coverage 2005: Plans: 3,978; 
Coverage 2005: Participants: 2,399,744; 
Benefits Paid 2006: Payees: 32,999; 
Benefits Paid 2006: Payments: $186,672,223; 
Benefits Paid 2006: Mean Monthly Pension: $451. 

State: North Carolina; 
Claims 1975-2006: Plans: 47; 
Claims 1975-2006: Claims: $373,760,939; 
Coverage 2005: Plans: 480; 
Coverage 2005: Participants: 1,154,334; 
Benefits Paid 2006: Payees: 29,134; 
Benefits Paid 2006: Payments: $125,373,643; 
Benefits Paid 2006: Mean Monthly Pension: $352. 

State: North Dakota; 
Claims 1975-2006: Plans: 2; 
Claims 1975-2006: Claims: $128,733; 
Coverage 2005: Plans: 37; 
Coverage 2005: Participants: 70,031; 
Benefits Paid 2006: Payees: 103; 
Benefits Paid 2006: Payments: $456,710; 
Benefits Paid 2006: Mean Monthly Pension: $363. 

State: Ohio; 
Claims 1975-2006: Plans: 328; 
Claims 1975-2006: Claims: $3,304,343,666; 
Coverage 2005: Plans: 1,637; 
Coverage 2005: Participants: 1,635,016; 
Benefits Paid 2006: Payees: 58,535; 
Benefits Paid 2006: Payments: $374,856,178; 
Benefits Paid 2006: Mean Monthly Pension: $504. 

State: Oklahoma; 
Claims 1975-2006: Plans: 22; 
Claims 1975-2006: Claims: $381,366,835; 
Coverage 2005: Plans: 182; 
Coverage 2005: Participants: 433,611; 
Benefits Paid 2006: Payees: 3,011; 
Benefits Paid 2006: Payments: $15,248,545; 
Benefits Paid 2006: Mean Monthly Pension: $409. 

State: Oregon; 
Claims 1975-2006: Plans: 19; 
Claims 1975-2006: Claims: $34,524,982; 
Coverage 2005: Plans: 222; 
Coverage 2005: Participants: 510,513; 
Benefits Paid 2006: Payees: 2,556; 
Benefits Paid 2006: Payments: $21,149,671; 
Benefits Paid 2006: Mean Monthly Pension: $691. 

State: Pennsylvania; 
Claims 1975-2006: Plans: 337; 
Claims 1975-2006: Claims: $4,668,703,939; 
Coverage 2005: Plans: 1,874; 
Coverage 2005: Participants: 2,031,563; 
Benefits Paid 2006: Payees: 80,524; 
Benefits Paid 2006: Payments: $547,528,915; 
Benefits Paid 2006: Mean Monthly Pension: $538. 

State: Rhode Island; 
Claims 1975-2006: Plans: 47; 
Claims 1975-2006: Claims: $41,309,238; 
Coverage 2005: Plans: 126; 
Coverage 2005: Participants: 90,683; 
Benefits Paid 2006: Payees: 1,659; 
Benefits Paid 2006: Payments: $6,245,574; 
Benefits Paid 2006: Mean Monthly Pension: $307. 

State: South Carolina; 
Claims 1975-2006: Plans: 17; 
Claims 1975-2006: Claims: $64,941,570; 
Coverage 2005: Plans: 182; 
Coverage 2005: Participants: 399,740; 
Benefits Paid 2006: Payees: 14,022; 
Benefits Paid 2006: Payments: $50,759,828; 
Benefits Paid 2006: Mean Monthly Pension: $301. 

State: South Dakota; 
Claims 1975-2006: Plans: [Empty]; 
Claims 1975-2006: Claims: [Empty]; 
Coverage 2005: Plans: 29; 
Coverage 2005: Participants: $63,263; 
Benefits Paid 2006: Payees: 227; 
Benefits Paid 2006: Payments: $1,936,569; 
Benefits Paid 2006: Mean Monthly Pension: $692. 

State: Tennessee; 
Claims 1975-2006: Plans: 45; 
Claims 1975-2006: Claims: $184,947,667; 
Coverage 2005: Plans: 348; 
Coverage 2005: Participants: 552,423; 
Benefits Paid 2006: Payees: 13,563; 
Benefits Paid 2006: Payments: $60,579,227; 
Benefits Paid 2006: Mean Monthly Pension: $368. 

State: Texas; 
Claims 1975-2006: Plans: 109; 
Claims 1975-2006: Claims: $191,265,052; 
Coverage 2005: Plans: 1,261; 
Coverage 2005: Participants: 1,874,076; 
Benefits Paid 2006: Payees: 16,491; 
Benefits Paid 2006: Payments: $83,429,213; 
Benefits Paid 2006: Mean Monthly Pension: $418. 

State: Utah; 
Claims 1975-2006: Plans: 8; 
Claims 1975-2006: Claims: $29,595,562; 
Coverage 2005: Plans: 123; 
Coverage 2005: Participants: 203,310; 
Benefits Paid 2006: Payees: 1,983; 
Benefits Paid 2006: Payments: $12,095,719; 
Benefits Paid 2006: Mean Monthly Pension: $510. 

State: Vermont; 
Claims 1975-2006: Plans: 10; 
Claims 1975-2006: Claims: $8,194,563; 
Coverage 2005: Plans: 67; 
Coverage 2005: Participants: 54,931; 
Benefits Paid 2006: Payees: 1,401; 
Benefits Paid 2006: Payments: $7,167,453; 
Benefits Paid 2006: Mean Monthly Pension: $411. 

State: Virginia; 
Claims 1975-2006: Plans: 47; 
Claims 1975-2006: Claims: $2,753,225,929; 
Coverage 2005: Plans: 626; 
Coverage 2005: Participants: 883,510; 
Benefits Paid 2006: Payees: 11,957; 
Benefits Paid 2006: Payments: $71,827,569; 
Benefits Paid 2006: Mean Monthly Pension: $498. 

State: Washington; 
Claims 1975-2006: Plans: 22; 
Claims 1975-2006: Claims: $261,758,583; 
Coverage 2005: Plans: 322; 
Coverage 2005: Participants: 711,907; 
Benefits Paid 2006: Payees: 8,549; 
Benefits Paid 2006: Payments: $88,815,895; 
Benefits Paid 2006: Mean Monthly Pension: $883. 

State: West Virginia; 
Claims 1975-2006: Plans: 53; 
Claims 1975-2006: Claims: $1,236,685,805; 
Coverage 2005: Plans: 149; 
Coverage 2005: Participants: 184,201; 
Benefits Paid 2006: Payees: 12,218; 
Benefits Paid 2006: Payments: $110,762,806; 
Benefits Paid 2006: Mean Monthly Pension: $709. 

State: Wisconsin; 
Claims 1975-2006: Plans: 82; 
Claims 1975-2006: Claims: $282,816,207; 
Coverage 2005: Plans: 660; 
Coverage 2005: Participants: 839,370; 
Benefits Paid 2006: Payees: 9,251; 
Benefits Paid 2006: Payments: $48,528,938; 
Benefits Paid 2006: Mean Monthly Pension: $421. 

State: Wyoming; 
Claims 1975-2006: Plans: 1; 
Claims 1975-2006: Claims: $90,887; 
Coverage 2005: Plans: 24; 
Coverage 2005: Participants: 48,701; 
Benefits Paid 2006: Payees: 262; 
Benefits Paid 2006: Payments: $2,223,900; 
Benefits Paid 2006: Mean Monthly Pension: $734. 

State: Puerto Rico; 
Claims 1975-2006: Plans: 12; 
Claims 1975-2006: Claims: $16,614,401; 
Coverage 2005: Plans: 90; 
Coverage 2005: Participants: 69,306; 
Benefits Paid 2006: Payees: 2,400; 
Benefits Paid 2006: Payments: $8,826,510; 
Benefits Paid 2006: Mean Monthly Pension: $284. 

State: U.S. Territories; 
Claims 1975-2006: Plans: [Empty]; 
Claims 1975-2006: Claims: [Empty]; 
Coverage 2005: Plans: 8; 
Coverage 2005: Participants: 2,377; 
Benefits Paid 2006: Payees: 153; 
Benefits Paid 2006: Payments: $766,996; 
Benefits Paid 2006: Mean Monthly Pension: $394. 

State: Foreign countries; 
Claims 1975-2006: Plans: 1; 
Claims 1975-2006: Claims: $204,359; 
Coverage 2005: Plans: 8; 
Coverage 2005: Participants: [Empty]; 
Benefits Paid 2006: Payees: 1,654; 
Benefits Paid 2006: Payments: $9,200,275; 
Benefits Paid 2006: Mean Monthly Pension: $451. 

State: Total; 
Claims 1975-2006: Plans: 3,673; 
Claims 1975-2006: Claims: $32,626,780,271; 
Coverage 2005: Plans: 29,605; 
Coverage 2005: Participants: $34,041,993; 
Benefits Paid 2006: Payees: 622,353; 
Benefits Paid 2006: Payments: $4,082,193,800; 
Benefits Paid 2006: Mean Monthly Pension: $531. 

[End of table] 

Sources: PBGC's Pension Insurance Data Book 2006. Information derived 
from PBGC Fiscal Year Closing File (9/30/06), Pension Plan Coverage 
Topic Module (May 2003) to the 2001 Survey of Income and Program 
Participation (SIPP), PBGC Case Administration System, PBGC Premium 
Filings, PBGC Participant System (PRISM), and fiscal year calculations. 
Claims and plan coverage data by state of plan administration; benefits 
and participant coverage data by state of payee residence. SIPP used to 
estimate participant coverage data. 

[End of section] 

Appendix III: Bylaws of the Pension Benefit Guaranty Corporation, May 
23, 2008: 

[See PDF for image] 

This figure is a copy of the Bylaws of the Pension Benefit Guaranty 
Corporation, May 23, 2008, as printed in the Federal Register, Vol. 73, 
No. 101, Friday, May 23, 2008: 

Pension Benefit Guaranty Corporation: 
29 CFR Part 4002: 

Bylaws of the Pension Benefit Guaranty Corporation: 

Agency: Pension Benefit Guaranty Corporation. 

Action: Final rule. 

Summary: This is a final rule to amend the bylaws of Pension Benefit 
Guaranty Corporation. 

Dates: Effective June 23, 2008. 

For Further Information Contact: 

Judith R. Starr, General Counsel, Pension Benefit Guaranty Corporation, 
1200 K Street, NW., Washington, DC 20005-4026;202-326-4400. (TTY/TDD 
users may call the Federal relay service toll-free at 1-800-877-8339 
and ask to be connected to 202-326-4400.) 

Supplementary Information: Pension Benefit Guaranty Corporation (PBGC) 
administers the pension plan termination insurance program under Title 
IV of the Employee Retirement Income Security Act of 1974 (ERISA). 
Section 4002(8(3) of ERISA gives PBGC power "to adopt, amend, and 
repeal, by the board of directors, bylaws * * *," Section 4002(f) of 
ERISA provides that "The board of directors may alter, supplement, or 
repeal any existing bylaw * * * and may adopt additional bylaws * * 
* from time to time as may be necessary." PBGC's bylaws are set forth 
in 29 CFR Part 4002. 

PBGC's Board of Directors has amended the bylaws. This rule replaces 
the old bylaws with the new bylaws. 

Compliance With Rulemaking Guidelines: 

As a rule of agency organization, procedure, or practice, this rule is 
exempt from notice and public comment requirements. Because no general 
notice of proposed rulemaking is required, the Regulatory Flexibility 
Act does not apply to this rule. See 5 U.S.C. 601(2), 603, 604. PBGC 
has determined that this rule is not a "significant regulatory action" 
under Executive Order 12866, as amended. 

List of Subjects in Part 4002: 

Authority delegations (Government agencies), Organization and functions 
(Government agencies). 

Accordingly, 29 CFR part 4002 is revised to read as follows: 

Part 4002-Bylaws Of The Pension Benefit Guaranty Corporation: 

Sec.
4002.1: Name.
4002.2: Offices.
4002.3: Board of Directors, Chair, and Representatives of Board 
Members. 
4002.4: Quorum.
4002.5: Meetings.
4002.6: Place of meetings; use of conference call communications 
equipment.
4002.7: Voting without a meeting.
4002.8: Conflicts of interest.
4002.9: Director of the Corporation and Senior Officers.
4002.10: Emergency Procedures.
4002.11: Seal.
4002.12: Amendments. 

Authority: 29 U.S.C. 1302(b)(3), 1302(1). 

ï¿½4002.1: Name. 

The name of the Corporation is the Pension Benefit Guaranty Corporation.
ï¿½4002.2: Offices. 

The principal office of the Corporation is in the Metropolitan area of 
the City of Washington, District of Columbia. The Corporation may have 
additional offices at such other places as the Board of Directors may 
deem necessary or desirable to the conduct of its business. 

ï¿½4002.3: Board of Directors, Chair, and Representatives of Board 
Members. 

(a)(1) The Corporation is governed by a Board of Directors which is 
composed of the Secretary of Labor, the Secretary of the Treasury, and 
the Secretary of Commerce. Members of the Board shall serve without 
compensation, but shall be reimbursed by the Corporation for travel, 
subsistence, and other necessary expenses incurred in the performance 
of their duties as Members of the Board. A person at the time of a 
meeting of the Board of Directors who is serving in an acting capacity 
as Secretary of Labor, Secretary of the Treasury, or Secretary of 
Commerce shall serve as a Member of the Board of Directors with the 
same authority and effect as the designated Secretary. 
(2) The Secretary of Labor shall be the Chair of the Board of Directors 
and shall call and preside over all Board meetings, and shall, on 
behalf of the Board, review and approve the Corporation's budget. The 
Inspector General of the Corporation shall report to the Board through 
the Chair.
(3) The Board of Directors is responsible for establishing and 
overseeing the policies of the Corporation. The Board may delegate 
powers to the Director of the Corporation except that the following 
powers of the Board may not be delegated to the Director of the
Corporation:
(i) Voting on an amendment to these bylaws;
(ii) Approval of the Annual Management Report (AMR), which includes the 
annual financial statements, management's discussion and analysis, 
annual performance report, and reports of the independent auditor;
(iii) Approval of the Annual Report, which includes the AMR, the
Chairman's message, and certain statutory reporting requirements; 
(iv) Approval of the Corporation's Investment Policy Statement; 
(v) Approval of the issuance of any notes or debt instruments to the 
Secretary of the Treasury under Section 4005(c) of ERISA; 
(vi) Approval of all final nonprocedural regulations prior to 
publication in the Federal Register, except for amendments that 
establish new interest rates and factors under Parts 4044 (Appendices C 
and D) and 4281 of this chapter, which may be approved by the Director 
of the Corporation; 
(vii) Approval of all reports or recommendations to the Congress 
required by Title IV of ERISA; 
(viii) Approval of any policy matter that would have a significant 
impact on the pension insurance program or its stakeholders; and; 
(ix) Review of reports from the Corporation's Inspector General that 
the Inspector General deems appropriate to deliver to the Board. 
(4) The Board shall review the Corporation's Investment Policy 
Statement at least every two years and approve the Investment Policy 
Statement at least every four years.
(b)(1) Each Board Member shall designate in writing an official, not 
below the level of Assistant Secretary, to serve as the Board Member's 
Representative. Such designation shall be effective until revoked or 
until a date or event specified therein. A Board Representative may act 
for all purposes under these bylaws, except that an action of a Board 
Representative on a Board Member's behalf with respect to the powers 
described in paragraph (a)(3)(i) through (v) of this section, shall be 
valid only upon ratification in writing by the Board Member. Any Board 
Representative may refer for Board action any matter under 
consideration by the Board Representatives.
(2) A Board Member may designate in writing an official, not below the 
level of Assistant Secretary, to serve as the Board Member's Alternate 
Representative at a meeting. An Alternate Representative may act for 
all purposes at that meeting, except that the Alternate 
Representative's actions shall be valid only upon ratification in 
writing by either the Board Member or the Board Representative. Any 
action of the Alternate Representative involving the powers described 
in paragraph (a)(3)(i) through (v) of this section or any matter that 
has been referred to the Board under paragraph (b)(1) of this section 
must be ratified in writing by the Board Member.
(3) For purposes of this section, ratification shall include approval 
of the minutes of the meeting of the Board of Directors.
(c) Final procedural regulations and all proposed regulations shall be 
approved by the Director of the Corporation prior to publication in the 
Federal Register; however, all final procedural regulations and all 
proposed regulations shall first be reviewed for comment by each Board 
Representative, except for amendments that establish new interest rates 
and factors under Parts 4044 (Appendices C and DJ and 4281 of this 
chapter. A Board Representative may, within 21 days of receiving a 
final procedural regulation or proposed regulation for review, request 
that it be referred to the Board Representatives for approval. 

ï¿½ 4002.4: Quorum.
A majority of the Board Members shall constitute a quorum for the 
transaction of business. Any act of a majority of the Members present 
at any meeting at which there is a quorum shall be the act of the 
Board. 

ï¿½ 4002.5: Meetings.
Regular meetings of the Board of Directors shall be held as often as 
required to provide appropriate oversight and guidance to the 
Corporation and at such times as the Chair shall select. Special 
meetings of the Board of Directors shall be called by the Chair on the 
request of any other Board Member. Reasonable notice of any meetings 
shall be given to each Board Member. The General Counsel of the 
Corporation shall serve as Secretary to the Board of Directors and keep 
its minutes. As soon as practicable after each meeting, a draft of the 
minutes of such meeting shall be distributed to each Member of the 
Board for approval. 

ï¿½ 4002.6: Place of meetings; use of conference call communications 
equipment. 
Meetings of the Board of Directors shall be held at the principal 
office of the Corporation unless otherwise determined by the Board of 
Directors or the Chair. Any Member may participate in a meeting of the 
Board of Directors through the use of conference call telephone or 
similar communications equipment, by means of which all persons 
participating in the meeting can speak to and hear each other. Any 
Board Member so participating in a meeting shall be deemed present for 
all purposes. Actions taken by the Board of Directors at meetings 
conducted through the use of such equipment, including the votes of 
each Member, shall be recorded in the usual manner in the minutes of 
the meetings of the Board of Directors. 

ï¿½ 4002.7: Voting without a meeting.
A resolution of the Board of Directors signed by each of the Board 
Members or each of the Board Representatives shall have the same effect 
as if agreed to at a meeting and shall be kept in the Corporate Minutes 
Book. A resolution for an action taken on any matter for which a Board 
Member has been disqualified under ï¿½4002.8 maybe signed by the Board 
Representative of the disqualified Board Member. 

ï¿½ 4002.8: Conflict of interest.
Any Board Member may disqualify himself or herself from participation 
in a Board action on any matter if the Board Member may have or may 
appear to have a conflict of interest. The Board Member shall notify 
the other Board Members of a disqualification. The disqualified 
Member's Board Representative, acting independently of that Member, may 
vote on the matter in the Member's place. The disqualified Board Member 
need not and may not ratify any action taken on the matter giving rise 
to his or her disqualification. 

ï¿½ 4002.9: Director of the Corporation and Senior Officers. 
(a) Director of the Corporation. The Corporation shall be administered 
by a Director appointed by the President with the advice and consent of 
the Senate. Subject to policies established by the Board, the Director 
shall have responsibility for the Corporation's management, including 
its personnel, organization and budget practices, and shall carry out 
the Corporation's functions under Title IV of ERISA. The Director shall 
submit the Corporation's budget to the Chair of the Board for review 
and approval.
(b) There shall be the following senior officers of the Corporation, 
reporting directly to the Director: 
(1) Deputy Directors for Policy and Operations, who shall be first and 
second assistant, respectively; 
(2) General Counsel, who shall serve as Secretary to the Board;
(3) Chief Financial Officer;
(4) Chief Information Officer;
(5) Chief Management Officer;
(6) Chief Operating Officer; and
(7) Chief Insurance Program Officer. 
(C) Subject to prior approval of the Board, the Director may establish 
such additional or other senior officers as necessary. Before making an 
appointment to a senior officer position, the Director shall consult 
with the Board. 

ï¿½ 4002.10: Emergency procedures.
(a) An emergency exists if a quorum of the Corporation's Board cannot 
readily be assembled or act through written contact because of the 
declaration of a government-wide emergency. These emergency procedures 
shall remain in effect during the emergency and upon the termination of 
the emergency shall cease to be operative unless and until another 
emergency occurs. The emergency procedures shall operate in conjunction 
with the PBGC Continuity of Operations Plan ("COOP Plan") of the 
current year, and any government-wide COOP protocols in effect. 
(b) During an emergency, the business of the PBGC shall continue to be 
managed in accordance with its COOP Plan. The functions of the. Board 
of Directors will be carried out by those Members of the Board of 
Directors in office at the time the emergency arises, or by persons 
designated by the agencies' COOP plans to act in place of the Board 
Members, who are available to act during the emergency. If no such 
persons are available, then the authority of the Board shall be 
transferred to the Board Representatives who are available. If no Board 
Representatives are available, then the Director of the Corporation 
shall perform essential Board functions. 
(c) During an emergency, meetings of the Board may be called by any 
available Member of the Board. The notice thereof shall specify the 
time and place of the meeting. To the extent possible, notice shall be 
given in accordance with these bylaws. Notice shall be given to those 
Board Members whom it is feasible to reach at the time of the 
emergency, and notice maybe given at a time less than 24 hours before 
the meeting if deemed necessary by the person giving notice. 

ï¿½ 4002.11: Seal.
The seal of the Corporation shall be in such form as maybe approved 
from time to time by the Board. 

ï¿½4002.12: Amendments. 
These bylaws may he amended or new bylaws adopted by unanimous vote of 
the Board. Issued in Washington, DC, this 20th day of May, 2008. 

Charles E.F. Millard, Director, Pension Benefit Guaranty Corporation. 

Issued on the date set forth above pursuant to Resolution 2008-09 of 
the Board of Directors authorizing adoption of the revised Bylaws 
contained in this final rule. 

Judith R. Starr,
Secretary, Board of Directors, Pension Benefit Guaranty Corporation. 
[FR Doc. E8-11667 Filed 5-22-08; 8:45 am]: 
Billing Code 7709-01-P: 

[End of section] 

Appendix IV: List of Selected Reports and Testimonies Related to the 
Pension Benefit Guaranty Corporation: 

U.S. Government Accountability Office: 

Pension Benefit Guaranty Corporation: Some Steps Have Been Taken to 
Improve Contracting, but a More Strategic Approach Is Needed. 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-871]. Washington, 
D.C.: August 2008. 

PBGC Assets: Implementation of New Investment Policy Will Need Stronger 
Board Oversight. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-
667]. Washington, D.C.: July 2008. 

Pension Benefit Guaranty Corporation: A More Strategic Approach Could 
Improve Human Capital Management. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-08-624]. Washington, D.C.: June 2008. 

High Risk Series: An Update. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-07-310]. Washington, D.C.: January 2007. 

Pension Benefit Guaranty Corporation: Governance Structure Needs 
Improvements to Ensure Policy Direction and Oversight. [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-808]. Washington, D.C.: July 
6, 2007. 

PBGC's Legal Support: Improvement Needed to Eliminate Confusion and 
Ensure Provision of Consistent Advice. [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-757R]. Washington, D.C.: May 
18, 2007. 

Private Pensions: Questions Concerning the Pension Benefit Guaranty 
Corporation's Practices Regarding Single-Employer Probable Claims. 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-991R]. Washington, 
D.C.: September 9, 2005. 

Private Pensions: The Pension Benefit Guaranty Corporation and Long- 
Term Budgetary Challenges. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-05-772T]. Washington, D.C.: June 9, 2005. 

Pension Benefit Guaranty Corporation: Single-Employer Pension Insurance 
Program Faces Significant Long-Term Risks. [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-04-90]. Washington, D.C.: October 
2003. 

Pension Benefit Guaranty Corporation Single-Employer Insurance Program: 
Long-Term Vulnerabilities Warrant 'High Risk' Designation. [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-03-1050SP]. Washington, D.C.: 
July 23, 2003. 

Pension Benefit Guaranty Corporation: Statutory Limitation on 
Administrative Expenses Does Not Provide Meaningful Control. 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-301]. Washington, 
D.C.: February 2003. 

GAO Forum on Governance and Accountability: Challenges to Restore 
Public Confidence in U.S. Corporate Governance and Accountability 
Systems. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-419SP]. 
Washington, D.C.: January 2003. 

U.S. Congressional Budget Office: 

A Review of the Pension Benefit Guaranty Corporation's New Investment 
Strategy. April 24, 2008. 

Effect of H.R. 2830 on the Net Economic Costs of the Pension Benefit 
Guaranty Corporation. December 29, 2005. 

The effect on the 10-year net costs to the Pension Benefit Guaranty 
Corporation (PBGC) of enacting S. 1783, the Pension Security and 
Transparency Act of 2005. October 11, 2005. 

A Guide to Understanding the Pension Benefit Guaranty Corporation. 
September 2005. 

The Risk Exposure of the Pension Benefit Guaranty Corporation. 
September 2005. 

Testimony on Multiemployer Pension Plans. June 28, 2005. 

Testimony on the Pension Benefit Guaranty Corporation: Financial 
Condition, Potential Risks, and Policy Options. June 15, 2005. 

Testimony on Estimating the Costs of the Pension Benefit Guaranty 
Corporation. June 9, 2005. 

Testimony on Defined-Benefit Pension Plans: Current Problems and Future 
Challenges, June 7, 2005. 

U.S. Congressional Research Service: 

Baird Webel. Insurance Guaranty Funds. RL32175. February 27, 2008. 

John J. Topoleski. Pension Benefit Guaranty Corporation: A Fact Sheet. 
95-118. January 29, 2008. 

Patrick Purcell. Summary of the Pension Protection Act of 2006. 
RL33703. May 1, 2007. 

William Klunk. The Pension Benefit Guaranty Corporation and the Federal 
Budget. RS22650. April 24, 2007. 

William Klunk. The Financial Health of the Pension Benefit Guaranty 
Corporation (PBGC). RL33937. March 23, 2007. 

Jennifer Staman and Erika Lunder. The Pension Benefit Guaranty 
Corporation and Single-Employer Plan Terminations. RS22624. March 14, 
2007. 

Jennifer Staman and Erika Lunder. Pension Protection Act of 2006: 
Summary of the PBGC Guarantee and Related Provisions. RS22513. December 
20, 2006. 

Neela K. Ranade and Paul J. Graney. Defined Benefit Pension Reform for 
Single-Employer Plans. RL32991. January 26, 2006. 

[End of section] 

Appendix V: Comments from the Pension Benefit Guaranty Corporation: 

PBGC: 
Protecting America's Pensions: 
Pension Benefit Guaranty Corporation: 
Office of the Director: 
1200 K Street, N.W. 
Washington, D.C. 20005-4026: 

September 8, 2008: 

Ms. Barbara D. Bovbjerg, Director: 
Education, Workforce, and Income Security Issues: 
U.S. Government Accountability Office: 
Washington, D.C. 20548: 

Dear Ms. Bovbjerg: 

Thank you for the opportunity to comment on the draft version of your 
report entitled, "Pension Benefit Guaranty Corporation - Need for 
Improved Oversight Persists." PBGC appreciates GAO's work in reviewing 
this important area. 

PBGC especially appreciates the recognition that the report gives to 
the work of the Board and management in revising our by-laws, which the 
Board approved in May of this year. In August, PBGC issued Order GA 15-
6, "Documents for PBGC Board of Directors" to help implement the by-
laws, document Board interactions, and enable our Office of General 
Counsel to better document and monitor the Board review process. 

The draft report notably highlights the variety of ways in which PBGC 
receives Congressional oversight, ranging from hearings to the support 
of agencies such as the Congressional Budget Office, the Congressional 
Research Service, and GAO. It is worthwhile noting that GAO alone over 
the past decade has produced scores of reports and testimonies about 
PBGC and its central issues. Indeed, Appendix IV of your draft report 
cites 28 selected reports and testimonies related to PBGC from the 
three support agencies in recent years. 

Your draft report further acknowledges the work that management is 
undertaking to prepare for the upcoming Presidential transition. As you 
know from your review of PBGC's governance structure in 2007, PBGC has 
prepared substantial in-depth briefing materials on its operational and 
financial issues for incoming administrations. We agree with the 
recommendation to ensure that these transition materials include 
pertinent IG and GAO reports. 

In moving forward on corporate governance, PBGC will work in concert 
with its Board to provide the oversight information necessary to 
address the important issues that we confront in providing pension 
security to millions of Americans. Again, thanks for the opportunity to 
comment. 

Sincerely, 

Signed by: 

Charles E.F. Millard: 
Director: 

[End of section] 

Appendix VI: GAO Contact and Acknowledgments: 

GAO Contact: 

Barbara D. Bovbjerg, (202) 512-7215 or [email protected]: 

Acknowledgments: 

The following team members made key contributions to this report: Blake 
Ainsworth, Assistant Director; Jason Holsclaw, Analyst-in-Charge; 
Susannah Compton; William King; Matthew Lee; Charlie Willson; and Craig 
Winslow. 

[End of section] 

Footnotes: 

[1] GAO, High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-310] (Washington, D.C.: 
January 2007). 

[2] GAO, Pension Benefit Guaranty Corporation: Governance Structure 
Needs Improvements to Ensure Policy Direction and Oversight, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-808] (Washington, 
D.C.: July 6, 2007). 

[3] Pub. L. No. 93-406, 88 Stat. 829 (codified, as amended, at 29 
U.S.C. ï¿½ï¿½1001-1461). 

[4] A defined benefit plan is a pension plan where the plan sponsor 
provides a benefit generally expressed as a monthly payment based on a 
formula that combines salary and years of service to the company. 
Defined benefit plans usually express benefits as an annuity, but may 
offer departing participants the opportunity to receive lump sum 
distributions. 

[5] ERISA also established rules for funding defined benefit plans, 
instituted pension insurance premiums, promulgated certain fiduciary 
rules and mandated annual reporting requirements. 

[6] 31 U.S.C. ï¿½ï¿½ 9101(c)(3)(J) and 9103-9106. 

[7] 29 U.S.C ï¿½ 1302(a), (g)(2). 

[8] PBGC administers two insurance programs: the single-employer and 
multiemployer insurance programs. A single-employer plan is established 
and maintained by only one employer. Single-employer plans can be 
established unilaterally by the sponsor or through a collective 
bargaining agreement with a labor union. 29 U.S.C. ï¿½ 1002(41). A 
multiemployer plan is a collectively bargained arrangement between a 
labor union and a group of employers in a particular trade or industry. 
Management and labor representatives must jointly govern multiemployer 
plans. 29 U.S.C. ï¿½ 1002(37). 

[9] 29 U.S.C. ï¿½ 1302(d). PBGC board members have designated officials 
and staff within their respective agencies to conduct much of the day- 
to-day work related to PBGC on their behalf. These officials are 
referred to as board representatives and act as liaisons between their 
cabinet secretaries and PBGC. They hold the rank of assistant secretary 
or above. 

[10] Pub. L. No. 109-280, 120 Stat. 780. 

[11] 29 U.S.C ï¿½ 1302(h)(b) specifies that the Federal Advisory 
Committee Act shall not apply to PBGC's advisory committee. 

[12] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-808]. 

[13] Each representative has a dedicated staff person whose assignments 
include working on PBGC matters. In 2007, we reported that although the 
board representatives can draw on the expertise of other staff within 
their respective agencies as needed, these staff persons have other job 
responsibilities, which could limit the amount of time they can 
dedicate to PBGC. 

[14] PBGC's executive management has established committees and working 
groups for policy and oversight. According to PBGC, the Executive 
Management Committee is responsible for corporate policy decisions and 
coordination of the work of various PBGC offices. The Internal Control 
Committee has oversight responsibility for PBGC's internal controls. 
The Budget Planning and Integration Team provides a standardized 
process to promote integrated approaches for the alignment of budgetary 
resources and strategic planning. The Operations Integration Board 
provides a forum for senior leadership to commission and review 
corporationwide programs, projects, and internal policies. 

[15] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-808]. 

[16] Pub. L. No. 109-280, ï¿½ 411(a)(1), 120 Stat. 780, 935 (codified at 
29 U.S.C. ï¿½ 1302(a)). 

[17] The Senate Committee on Finance and the Committee on Health, 
Education, Labor, and Pensions both have jurisdiction over the 
nomination. 

[18] PBGC is required each year to submit to Congress and the President 
an annual report, which must include the actuarial assumptions and 
methods PBGC uses to evaluate the expected 5-year operations and status 
of its pension benefit guaranty funds, and a comparison of its funds' 
investment returns with a designated index. 29 U.S.C. ï¿½ 1308. 

[19] The U.S. Congressional Budget Office is charged with providing 
Congress with objective, nonpartisan, and timely analyses to aid in 
economic and budgetary decisions on the wide array of programs covered 
by the federal budget and the information and estimates required for 
the congressional budget process. 

[20] U.S. Congressional Budget Office, A Review of the Pension Benefit 
Guaranty Corporation's New Investment Policy (Apr. 24, 2008). 

[21] The Millennium Challenge Corporation is a U.S. government 
corporation designed to work with foreign countries to reduce global 
poverty through the promotion of sustainable economic growth. 22 U.S.C. 
ï¿½ï¿½ 7701, 7703. 

[22] The Commodity Credit Corporation (CCC) is a U.S. government 
corporation created to stabilize, support, and protect farm income and 
prices. CCC also helps maintain balanced and adequate supplies of 
agricultural commodities and aids in their distribution. 15 U.S.C. ï¿½ 
714. 

[23] OPIC undertakes programs to provide political risk insurance to 
U.S. investors, contractors, exporters and financial institutions 
involved in international transactions. 22 U.S.C. ï¿½ 2194b. Political 
risk insurance can cover currency inconvertibility, expropriation, and 
political violence, and is available for investments in new ventures, 
expansions of existing enterprises, privatizations, and acquisitions 
with positive developmental benefits. 

[24] 29 U.S.C. ï¿½ 1306(a)(2), (b). 

[25] The Federal Advisory Committee Act became law in 1972 and defines 
how federal advisory committees operate, including open meetings, 
chartering, public involvement, and reporting for such entities. Pub. 
L. No. 92-463, 86 Stat. 770 (1972) (codified as amended at 5 U.S.C. 
app. 2). 

[26] PBGC's board published a copy of its bylaw amendments in the 
Federal Register. 29 U.S.C. ï¿½ 1302(f). See also 73 Fed. Reg. 29985, 
which is reproduced in appendix III. 

[27] 29 U.S.C. ï¿½ï¿½ 1001-1461. 

[28] Pub. L. No. 109-280, 120 Stat. 780. 

[29] 31 U.S.C. ï¿½ï¿½ 9101-9110. 

[End of section] 

GAO's Mission: 

The Government Accountability Office, the audit, evaluation and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the performance 
and accountability of the federal government for the American people. 
GAO examines the use of public funds; evaluates federal programs and 
policies; and provides analyses, recommendations, and other assistance 
to help Congress make informed oversight, policy, and funding 
decisions. GAO's commitment to good government is reflected in its core 
values of accountability, integrity, and reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each 
weekday, GAO posts newly released reports, testimony, and 
correspondence on its Web site. To have GAO e-mail you a list of newly 
posted products every afternoon, go to [hyperlink, http://www.gao.gov] 
and select "E-mail Updates." 

Order by Mail or Phone: 

The first copy of each printed report is free. Additional copies are $2 
each. A check or money order should be made out to the Superintendent 
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 
more copies mailed to a single address are discounted 25 percent. 
Orders should be sent to: 

U.S. Government Accountability Office: 
441 G Street NW, Room LM: 
Washington, D.C. 20548: 

To order by Phone: 
Voice: (202) 512-6000: 
TDD: (202) 512-2537: 
Fax: (202) 512-6061: 

To Report Fraud, Waste, and Abuse in Federal Programs: 

Contact: 

Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]: 
E-mail: [email protected]: 
Automated answering system: (800) 424-5454 or (202) 512-7470: 

Congressional Relations: 

Ralph Dawn, Managing Director, [email protected]: 
(202) 512-4400: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7125: 
Washington, D.C. 20548: 

Public Affairs: 

Chuck Young, Managing Director, [email protected]: 
(202) 512-4800: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7149: 
Washington, D.C. 20548: 

*** End of document. ***