KOHL & HARKIN RELEASE PBGC INSPECTOR GENERAL REPORT SHOWING MORE REFORM IS NEEDED
HELP Committee Will Continue to Investigate PBGC Management and Oversight
WASHINGTON - Today Senator Herb Kohl (D-WI), Chairman of the Special Committee on Aging, and Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, released a report written by the Pension Benefit Guaranty Corporation (PBGC) Inspector General Rebecca Batts on the continuing financial and organizational problems facing the agency. The report, requested by Kohl as a follow-up to a May 2009 Aging hearing , reinforces the Senators' concern over the PBGC's capability to fulfill its mission to insure the pensions of nearly 44 million Americans. The Inspector General states that the agency remains insufficiently prepared to take on a potential influx of terminated pension plans, and suggests an approach for confronting the problem. The report also addresses the PBGC's significant contract workforce, which comprises nearly two-thirds of agency staff, yet has not been incorporated into prior strategies for taking on pension plans.
"This report is just another in a long line of studies that have reinforced how vital it is that we take action to improve the oversight and governance of the PBGC. The retirement security of one in six Americans could be on the line," said Kohl, "Therefore, I'm very pleased to be working with Senator Harkin to enact important legislation that would significantly improve the governance and oversight structure of the PBGC."
"Forty-four million Americans depend on the Pension Benefit Guaranty Corporation to protect their hard-earned pensions," said Harkin. "It is critical that this agency be prepared for worst-case economic scenarios, but this report raises serious concerns about whether PBGC would be able to cope with a sudden influx of pensions brought on by an economic crisis. As chairman of the Health, Education, Labor and Pensions Committee, I plan to further investigate these issues and am committed to doing whatever is necessary to bolster PBGC."
In July 2009, Kohl was joined by Senators Michael Bennet (D-CO), Claire McCaskill (D-MO), and Russ Feingold (D-WI) in introducing the Pension Benefit Guaranty Corporation Governance Improvement Act (S. 1544) to significantly improve the governance and oversight structure of the PBGC. The bill has been referred to Chairman Harkin's HELP Committee. In July 2009, Brookings Institution released a paper highlighting the need for stronger governance of the PBGC. The U.S. Government Accountability Office (GAO) has also issued several reports calling for increased oversight, including Pension Benefit Guaranty Corporation: Need for Improved Oversight Persists and PBGC Assets: Implementation of New Investment Policy Will Need Stronger Board Oversight .
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