OIG: PBGC Missing Participants Program Can Be Improved

The Pension Benefit Guaranty Corporation (PBGC) has more work to do with its Missing Participants Program, says the agency’s Office of the Inspector General (OIG). 

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

About the Program

The Retirement Protection Act of 1994 created the program to provide a way for distributing plan benefits to participants and beneficiaries whom plans cannot locate in a standard termination. The Pension Protection Act of 2006 (PPA) gave the PBGC authority to broaden the program, which it did to include other terminating plans not otherwise covered under its pension insurance program, including defined contribution plans and small professional defined benefit plans. The PPA also extended the program to include missing participants in multiemployer plans whose plan sponsors terminate and close out the plan. The PBGC’s Office of Benefits Administration manages the program. 

Findings

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

• it does not have performance measures;
• it uses unreliable data management practices; and 
• program procedures do not reflect the actual business practices used in program administration. 

Without performance measures, the OIG says, it is difficult to identify “outliers in performance”; in addition, “not having sound data management practices has led to a lack of quantitative data available for program evaluation.” Furthermore, the report says, the absence of procedures that reflect actual business practices “may lead to ineffective implementation of the program and hinder continuity of operations.”

Recommendations

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

1. Establish objective, quantifiable and measurable performance goals for the program as required by OMB Circular No. A-11, Part 6, and develop performance measures to track progress in achieving them.
2. Assess the adequacy of the resources and/or work prioritization in successfully implementing the program.
3. Improve data management practices to ensure data reliability for tracking and reporting on missing participant status, including search activity efforts.
4. Update the program procedures in accordance with current business practices, including overseas missing participants/beneficiaries.
5. Periodically review policies and procedures for continued relevance and effectiveness in achieving the program’s mission.

The OIG says that the PBGC management agreed with its recommendations and will take the corrective actions the report identified.