Justice, Fairness, Inclusion, and Performance.

The Governance Structure of the Pension Benefit Guaranty Corporation: An Independent Review

The Moving Ahead for Progress in the 21st Century Act of 2012 mandated that the Pension Benefit Guaranty Corporation (PBGC) contract with the National Academy of Public Administration (the Academy) to conduct a comprehensive review of PBGC's governance structure and offer recommendations to enhance its effectiveness. PBGC is governed by a three-member Board consisting of the Secretaries of Labor, Commerce, and Treasury.

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Key Findings

The Academy formed a five-member Panel of Fellows, chaired by Thomas H. Stanton, who spent the past year conducting an independent review of PBGC's governance structure. Consistent with the Congressional mandate, the Panel conducted a review of the governance structures of analogous organizations to identify effective practices; issued recommendations on the ideal size and composition of the PBGC Board of Directors, as well as the qualifications and term lengths and procedures for selecting and removing members; and recommended policies necessary to enhance Congressional oversight and transparency of the Board, as well as mitigate potential conflicts of interest. At PBGC's request, the Academy also reviewed and reported on PBGC's compensation structure.


The Panel determined that a new governance structure—combined with stronger management—would be an important ingredient in helping PBGC to run effectively and efficiently, and in ensuring that Congress and the American public have confidence in its operations. To this end, the Panel urged Congress to make statutory changes to PBGC's governance structure based on its view of PBGC's primary public purposes and appropriate role. The Panel offered two options for governance: (1) expand and restructure the current Board; or (2) eliminate the Board entirely and make the Director responsible for managing the Corporation to carry out its mission. The Panel also concluded that PBGC should not require approval from the DOL in the development of its budget and regulations, or in its relations with Congress, and that PBGC's compensation structure is not currently impeding its ability to recruit and retain employees for mission critical occupations.