19 April 2024

Does the PBGC Need More Plan Sponsor Oversight?

#
Share This Story

The U.S. Chamber of Commerce is calling for a complete revamp of the Pension Benefit Guaranty Corporation board of directors to include plan sponsors from company and employers affected by the federal agency’s supervision.

The business group says in a new position paper that the PBGC can better “ensure its ongoing viability” by implementing an expanded board structure to include plan sponsors from small and large businesses as well as sponsors from multiemployer plans.

Of late, a proposal to raise the PBGC’s premiums to $25 billion over the next 10 years has been challenged by plan administrators that say the increase will hurt competitive growth, jobs and the economy.

“To have plan sponsors be a part of the board, we think would be critical in terms of having the people who are actually impacted by what’s going on at the PBGC and who are running their own plans,” says Aliya Wong, a policy expert for the Chamber.

In a statement to EBN, J. Jioni Palmer, deputy chief policy officer for the agency, explains that it looks forward to discussing these ideas with the Chamber.

“This is another example of the efforts people are making to expand retirement security for workers and retirees,” Palmer says.

Currently, the PBGC board of directors includes Treasury Secretary Jack Lew, Commerce Secretary Penny Pritzkeris and is chaired by Thomas E. Perez, the Secretary of Labor.

Also, in October, the three-member board selected Constance Donovan, formerly an attorney in the Office of the General Counsel at the Department of the Treasury, as its “participant and plan sponsor advocate.” Her duties include serving as a liaison for plan sponsors and participants, as well as resolving disputes between the agency and its customers, the agency said.

Meanwhile, Donovan should also be helping to resolve plan sponsor concerns when employer pension plans experience trouble, according to the Chamber’s paper.

“In general, we would like see the scope of the PBGC broaden in terms of how they look at saving the system,” Wong tells EBN. “It’s not just being there in terms of plans that have gone bankrupt, but also looking at how to help plan sponsors to continue to maintain plans.” 

Now, after numerous meetings with its employee benefits committee over a multi-year period, the business federation recommends that written governance procedures should be adopted that can help foster transparency in dealing with how the PBGC makes decisions and calculates its deficit. At the close of 2013, the agency reported a $36 billion shortfall. 

Click here for the original article from Employee Benefit Adviser.

Join Our Online Community
Join the Better Way To Retire community and get access to applications, relevant research, groups and blogs. Let us help you Retire Better™
FamilyWealth Social News
Follow Us