The PBGC's existing three-member board should be expanded, adding members with staggered terms to better ensure the agency can meet its financial challenges, Barbara Bovbjerg, the GAO's managing director, education, work force and income security, testified Wednesday at a Senate hearing.
Under current law, the Pension Benefit Guaranty Corp.'s board consists of the secretaries of Treasury, Commerce and Labor. Because the three have other obligations as Cabinet secretaries, they can't pay “consistent attention to PBGC matters,” Ms. Bovbjerg said in written testimony for a Senate Health, Education, Labor and Pensions Committee hearing.
In addition, because the current board is changed when new administrations take over, board oversight can be disrupted during administration transitions, Ms. Bovbjerg added.
“It is untenable to rest the management of nearly $80 billion in assets on a corporate board architecture that can fail to meet and provide strategic direction for years at a time, and that is vulnerable to a lack of leadership during transitions to new administrations,” Ms. Bovbjerg said in her written testimony. “Companies that pay annual premiums to PBGC and the millions of employees whose retirement benefits are under PBGC's protection are owed greater stewardship of the corporation and its funds.”
During a hearing before the Senate Special Committee on Aging on May 20, 2009, Ms. Bovbjerg also recommended that the PBGC's board be made “more robust.” Sen. Herb Kohl, D-Wis., the committee's chairman, introduced legislation on July 20, 2010, that would expand the PBGC board to seven members, require it to meet at least four times a year and give the PBGC's advisory committee, inspector general and general counsel direct access to the board. That legislation is pending before the Senate HELP Committee.
Jeffrey Speicher, a PBGC spokesman, declined to comment on Ms. Bovbjerg's testimony Wednesday.