ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON OVERSIGHT

Lewis Announces a Hearing on the Pension Benefit Guaranty Corporation

House Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA) today announced that the Subcommittee on Oversight will hold a hearing on the Pension Benefit Guaranty Corporation (“PBGC”).  The hearing will take place on Wednesday, September 24, 2008, at 10:00 a.m., in the main Committee hearing room, 1100 Longworth House Office Building. 

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only.  Representatives of PBGC and the U.S. Government Accountability Office (“GAO”) have been invited to testify.  However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing. 

BACKGROUND:

PBGC is a federal corporation established under the Employee Retirement Income Security Act (“ERISA”) of 1974 (P.L. 93-406), as amended.  It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in about 30,500 defined-benefit pension plans. 

PBGC is funded by insurance premiums paid by plan sponsors, assets received from terminated plans, and investment income from PBGC assets.  As of September 30, 2007, PBGC reported a deficit of $13.1 billion in the single-employer pension insurance program and a deficit of $955 million in the multi-employer pension insurance program.  While ERISA specifically states that the U.S. government is not obligated to pay PBGC’s obligations, PBGC’s 2007 Annual Report states that, if the corporation fails to address its deficit, eventually plan sponsors, participants, and “possibly taxpayers” will bear the burden.  In the 2007 Annual Report, PBGC estimates that there is only a 23 percent chance of reaching full funding within the next ten years.

In July 2003, GAO designated PBGC’s single-employer pension insurance program as a high-risk program that needs broad-based transformations and warrants Congressional attention. In January 2007, GAO continued to list PBGC as a high risk area and noted in its High Risk Series that PBGC-insured plans had cumulative underfunding of $350 billion, including $73 billion in plans sponsored by financially weak firms.  In addition, GAO has investigated and issued recommendations with respect to various aspects of PBGC’s operations, including reports on the investment strategy and governance structure.  

In announcing the hearing, Chairman Lewis said, “PBGC plays a vital role in our retirement system and our economy.  The operation of PBGC is a concern for workers, plan sponsors, and the American taxpayer.  The Congress must make sure that PBGC is governed responsibly and operates efficiently.”

FOCUS OF THE HEARING:

The Subcommittee will review the financial condition, operations, and governance of PBGC.  The hearing will focus on the deficit in the single-employer pension insurance program, the change in investment policy, and the governance weaknesses identified by GAO.  The Subcommittee also will examine the overall status of the defined-benefit pension system, including the rise in the number of frozen or voluntarily terminated plans.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note:  Any person(s) and/or organization(s) wishing to submit comments for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms.  From the Committee homepage, http://waysandmeans.house.gov/, select "110th Congress" from the menu entitled, "Committee Hearings” (http://waysandmeans.house.gov/Hearings.asp?congress=18).  Select the hearing for which you would like to submit, and click on the link entitled, "Click here to provide a submission for the record."  Once you have followed the online instructions, complete all informational forms and click "submit" on the final page.  ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by close of business Wednesday, October 8, 2008.  Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings.  For questions, or if you encounter technical problems, please call (202) 225-1721.

FORMATTING REQUIREMENTS:

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.   

1.   All submissions and supplementary materials must be provided in Word or WordPerfect format and MUST NOT exceed a total of 10 pages, including attachments.  Witnesses and summiteers are advised that the Committee relies on electronic submissions for printing the official hearing record.

2.  Copies of whole documents submitted as exhibit material will not be accepted for printing.  Instead, exhibit material should be referenced and quoted or paraphrased.  All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3.  All submissions must include a list of all clients, persons, and/or organizations on whose behalf the witness appears.  A supplemental sheet must accompany each submission listing the name, company, address, telephone and fax numbers of each witness.

Note:  All Committee advisories and news releases are available on the World Wide Web at http://waysandmeans.house.gov. 

The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

Note:  All Committee advisories and news releases are available on the World Wide Web at http://waysandmeans.house.gov.

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