BIG: PBGC Missing Participant Program Can Be Improved

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The Pension Benefit Guaranty Corporation (PBGC) has more work to do with its missing participant program, the agency’s Office of the Inspector General (OIG) said.

In order to determine the effectiveness of the program in locating missing participants, the OIG conducted a study and published the results in a recently published report.

About the program

The Retirement Protection Act of 1994 created the program to provide a means of distributing plan benefits to members and beneficiaries that plans cannot locate in a standard termination. The Pension Protection Act of 2006 (PPA) gave the PBGC the power to expand the program, which it did to include other termination plans not covered by its pension insurance program, including defined contribution plans and small defined benefit occupational plans. The APP has also expanded the program to include missing members in multi-employer plans whose plan sponsors terminate and close the plan. The PBGC Benefits Administration Office manages the program.

Results

The OIG determined that the PBGC needs to improve and focus on the program, noting that:

  • it has no performance metrics;
  • it uses unreliable data management practices; and
  • program procedures do not reflect actual business practices used in the administration of the program.

Without performance measures, according to the OIG, it is difficult to identify “outliers in performance”; furthermore, “the lack of good data management practices resulted in a lack of quantitative data available for program evaluation”. Further, according to the report, the lack of procedures reflecting actual business practices “can lead to inefficient program implementation and hamper business continuity.”

Recommendations

The OIG suggested five actions the PBGC can take to improve the program:

1. Establish objective, quantifiable and measurable performance targets for the program, as required by OMB Circular No. A-11, Part 6, and develop performance measures to monitor progress towards their achievement.
2. Evaluate the adequacy of resources and / or work priorities for successful program implementation.
3. Improve data management practices to ensure data reliability for tracking and reporting on the status of missing participants, including research activity efforts.
4. Update program procedures in line with current business practices, including missing overseas participants / beneficiaries.
5. Periodically review policies and procedures to ensure their continued relevance and effectiveness in achieving the mission of the program.

The OIG states that the management of the PBGC has accepted his recommendations and will take the corrective actions identified by the report.

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