PENSION BENEFIT GUARANTY CORPORATION (PBGC) STRATEGIC PLAN
FY 2004-2008
July 23, 2004

I. Message from the Executive Director

As the Pension Benefit Guaranty’s executive leadership developed this strategic plan, the Corporation was facing some of the biggest challenges in its 29-year history. Pension underfunding and plan termination claims reached all-time highs. In FY 2003 alone, PBGC took over the pensions of 206,000 American workers and retirees. Also in FY 2003, PBGC incurred one of the largest one-year losses in its history, finishing the year with a record $11.2 billion deficit. Economic conditions have brought to light systemic weaknesses in the pension insurance system, and in FY 2003, the General Accounting Office placed the PBGC’s single-employer insurance program on its “high risk” list. Clearly, PBGC has the difficult task of addressing the dangers to the insurance system while continuing to improve service to workers and retirees and the pension practitioner community.

Fortunately, the ingenuity and devotion of PBGC’s workers have enabled the Corporation to make gains in productivity and quality with each passing year, despite the sharp increases in workload. In addition, PBGC officials have not watched idly as threats loomed on the horizon. Instead, PBGC and others in the Administration are working with Congress and other stakeholders to develop legislative solutions to the challenges we face. Internally, PBGC has now linked its strategic planning and budget planning processes. The result is a better alignment of the Corporation’s outcome goals, performance indicators and initiatives with our budget allocations. This new structure includes quantitative measures of effectiveness, allowing better management of resources and providing PBGC’s leadership a clear framework to make good decisions for the future of the Corporation’s customers.

This strategic plan showcases what is best about PBGC: devotion to its customers and the promise of retirement security, commitment to effective programs, wise use of resources, and a strong drive for continuous improvement.

Vincent K. Snowbarger
Acting Executive Director

II. Pension Benefit Guaranty Corporation Background

• The Employee Retirement Income Security Act of 1974 established PBGC as a federal corporation



• PBGC protects the pensions of 44 million working men and women in more than 31,000 private defined benefit pension plans, including over 1,600 multiemployer plans



• These pension plans provide a specified monthly benefit at retirement, usually based on salary or a stated dollar amount and years of service



• PBGC has about 800 federal employees and uses the services of some 1200 contract workers. It’s operating budget in FY 2003 was around $275 million.



• PBGC receives no funds from general tax revenues. It uses insurance premiums paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for trusteed plans.

III. Alignment of PBGC Goals, Budget and IT Investments

PBGC’s 2004-2008 Strategic Plan reflects a new perspective on the Corporation’s mission

• After several years of evaluation and refinement, it brings a sharpened focus on achieving measurable performance results.
  
  
• In considering the core missions of the Corporation, the Strategic Plan centers around the two strategic goals that reflect PBGC’s lines of business
  
  
• In establishing goals focused on customer satisfaction & cost efficiency, PBGC will be better able to continue the dramatic performance improvements of the last decade in a time of increased workload and financial pressure
  
  
• Critical functions such as effective management, quality financial information and efficient information technology are important tools for superior program result
  
  
• PBGC’s new performance measurements are balanced to include measures for customer service, financial condition and cost efficiency
  
  

IV. PBGC’s Mission, Vision and Values

PBGC encourages a stable, adequately funded system of private pension plans and provides responsive, timely, and accurate services to plan sponsors, participants in insured plans, and pension practitioners.

Vision

PBGC promotes and protects pensions through competence, customer service, and sound business practices.

Values

Our customers deserve our respect and are our reason for being. All of our efforts are directed toward meeting their needs. To that end, PBGC is committed to:

• Giving our customers accurate, timely, and responsive products and services.
  
  
• Building effective internal and external relationships, sharing knowledge and innovating.
  
  
• Encouraging collaboration and the effective use of our diverse knowledge, opinions, and experiences.
  
  
• Balancing employees’ work and personal needs.
  
  

V. PBGC Strategic Goals

• Outcome Goal 1.a: Promote better funding of insured plans by supporting pension reform legislation and monitoring unfunded benefit liabilities.
  
  
• Outcome Goal 1.b: Improve satisfaction of plan sponsors who contact PBGC by telephone and filers of standard terminations
  
  
• Outcome Goal 1.c: Improve customer satisfaction of plan sponsors who visit PBGC.gov
  
  
• Outcome Goal 1.d: Maintain reasonably low PBGC operating costs for participants in insured plans
  
  

Outcome Goal 1.a:

Promote better funding in plans PBGC insures by supporting pension reform legislation and monitoring unfunded benefit liabilities in insured plans.

In FY 2004, PBGC will develop baseline data for this goal and develop targets for for 2005-2008.

Strategies for Outcome Goal 1.a

• Develop a program to encourage notice to participants of plan underfunding
  
  
• Support the Administration’s proposed pension reform legislation. Reduce PBGC’s exposure to underfunded plan trusteeships. Research options to publicize the value of defined benefit plans
  
  
• Enhance the availability of plan data and modeling tools to provide more accurate and timely information on PBGC liabilities
  
  

Outcome Goal 1.b:

Improve customer satisfaction among sponsors of plans PBGC insures who contact PBGC by telephone and filers of standard terminations.

By FY 2008, PBGC will achieve an ACSI index of 78 for the plan sponsors and administrators who contact the PBGC by telephone. (In 2003, PBGC’s ACSI for plan sponsors and administrators who contacted the PBGC by telephone was 69.)

Strategies for Outcome Goal 1.b

• Re-design PBGC’s premium collection & practitioner services business processes and automated systems (Premium Accounting System)
  
  
• Implement a One-Stop Shop for practitioners
  
  

Outcome Goal 1.c:

Improve customer satisfaction of plan sponsors who visit PBGC.gov.

In FY 2004 PBGC will develop baseline data for this goal, and establish targets for FY 2005-2008 for the ACSI index for plan sponsors and administrators who visit PBGC.gov.

Strategies for Outcome Goal 1.c

• Enhance www.PBGC.gov to create an electronic practitioner self-service center
  
  
• Provide a secure gateway for electronically filed premiums, standard terminations, reportable events and other transactions
  
  

Outcome Goal 1.d:

Maintain reasonably low PBGC operating costs for participants in insured plans.

In FY 2004, PBGC will develop baseline data for this goal, and set targets for FY 2005-2008 for the administrative cost per participant in insured plans.

Strategies for Outcome Goal 1.d

• Using resources effectively in order to keep premium payments and operating costs at the lowest level consistent with its statutory responsibilities is part of PBGC’s mandate under ERISA.
  
  
• PBGC will evaluate its efficiency based on what it costs to provide services to plan sponsors.
  
  
• This value will be determined by dividing the portion of PBGC’s budget that is spent on this strategic goal (plus an allocation for Operational Support costs) by the number of participants in plans PBGC insures.
  
  

• Outcome Goal 2.a: Improve customer satisfaction among participants receiving a benefit from PBGC
  
  
• Outcome Goal 2.b: Improve customer satisfaction among participants who contact PBGC by telephone
  
  
• Outcome Goal 2.c: Improve customer satisfaction of plan sponsors who visit PBGC.gov
  
  
• Outcome Goal 2.d: Maintain reasonably low PBGC operating costs for participants in terminated plans
  
  

Outcome Goal 2.a:

Improve customer satisfaction among participants receiving a benefit from PBGC.

In FY 2004 PBGC will develop baseline data for this goal, and establish targets for FY 2005-2008 for the ACSI index for participants receiving a benefit from PBGC.

Strategies for Outcome Goal 2.a

• Implement a single benefit valuation computation system, replacing multiple legacy custom applications
  
  
• Provide written benefit estimates to participants who have not yet retired within one year of trusteeship
  
  
• Issue benefit statements in plain, clear language to participants
  
  

Outcome Goal 2.b:

Improve customer satisfaction among participants in PBGC-trusteed plans who contact PBGC by telephone.

By FY 2008, PBGC will achieve an ACSI index of 80 among participants who contact the PBGC by telephone. (In 2003, PBGC’s ACSI for participants who contacted the PBGC by telephone was 77.)

Strategies for Outcome Goal 2.b

• PBGC will develop a single automated system to track and respond to customer inquiries
  
  
• A benefits administration system with a single view of customer data for PBGC staff
  
  
• PBGC will enhance its existing call center to also provide first-contact response to e-mail, phone and fax inquiries
  
  
• PBGC will redesign its benefits administration computer system to reduce costs, improve performance and assure payment accuracy
  
  

Outcome Goal 2.c:

Improve customer satisfaction among participants in PBGC-trusteed plans who visit www.PBGC.gov.

In FY 2004 PBGC will develop baseline data for this goal, and establish targets for FY 2005-2008 for the ACSI index for participants in PBGC-trusteed plans who visit www.PBGC.gov.

Strategies for Outcome Goal 2.c

• Provide participants with a secure internet gateway to permit personal on-line transactions
  
  
• Increase and market plan-specific information on the web site at the point of plan termination
  
  
• Help participants calculate benefits for different retirement dates online
  
  

Outcome Goal 2.d:

Maintain reasonably low PBGC operating cost per participant in PBGC-trusteed plans.

In FY 2004, PBGC will develop baseline data for this goal, and set targets for FY 2005-2008 for the administrative cost per participant in trusteed plans.

Strategies for Outcome Goal 2.d

• Using resources effectively in order to keep premium payments and operating costs at the lowest level consistent with its statutory responsibilities is part of PBGC’s mandate under ERISA.
  
  
• PBGC will evaluate its efficiency based on what it costs to provide services to participants in trusteed plans.
  
  
• This value will be determined by dividing the portion of PBGC’s budget that is spent directly on this strategic goal (plus an allocation for operational support costs) by the number of participants in trusteed plans.
  
  

VI. PBGC Cross-Goal Strategies

Operational support or “cross-goal” strategies support performance across PBGC’s two lines of business, and in particular PBGC’s cost-efficiency goals (Outcome Goals 1.d and 2.d), as well as supporting the President’s Management Agenda.

• Cross Goal C1: Financial Management Strategies
  
  
• Cross Goal C2: Human Capital Management Strategies
  
  
• Cross Goal C3: Strategic IT Investments
  
  
• Cross Goal C4: Internal Customer Service Strategies
  
  
• Cross Goal C5: Program Evaluation Strategies

Cross Goal C1: Financial Management Strategies

• PBGC will improve its financial management processes, and develop a reengineering plan to better integrate its financial systems
   
  
• PBGC will develop a central repository for asset information to improve the timeliness of financial reporting
   
  
• PBGC will adopt a resolution and follow-up process that assures accountability for implementing audit recommendations

Cross Goal C2: Human Capital Management Strategies

• PBGC will improve recruitment and hiring processes to better meet business needs
   
  
• PBGC will establish an internship program to promote cross-training and greater staff flexibility
   
  
• PBGC will use employee development programs to address critical skill gaps

Cross Goal C3: IT Initiatives

PBGC has developed an organization-wide Enterprise Architecture framework with initiatives that address:

• Standardized development for new computer systems
   
  
• Improved budget and schedule estimates
   
  
• Centralized management reporting
   
  
• Corporate database of best practices and lessons learned in a single web-based system
   
  
• Improved security model with single sign-on and role-based security
   
  
• Technical infrastructure improvements

Cross Goal C4: Internal Customer Service Strategies

• To establish an internal standard of excellent delivery of service, Service Level Agreements (SLAs) were developed and implemented to allow PBGC departments to conduct continuous measurements of performance. There is an emphasis on internal processes that have the most direct effects on external customer service and cost.
   
  
• Significant cost avoidance has been realized from implementing the SLAs; e.g., PBGC improved its invoice processing which reduced penalties for late payments to its vendors by $132,000 over a two-year period.
   
  
• PBGC is conducting additional internal service reviews in other program and management support functions to improve its internal service delivery.

Cross Goal C5: Program Evaluation Strategies

• The first scorecard for the President’s Management Agenda (PMA) prepared by the Office of Management and Budget (OMB) in FY 2002 showed PBGC with Green ratings in 4 of 5 management areas (Budget and Performance Integration, Competitive Sourcing, Electronic Government, and Financial Management) and Yellow for Human Capital, based on its three-level (Green, Yellow and Red, with Green the best) rating system.
   
  
• During 2002 and 2003 the Corporation assessed its strategic planning process using the Baldrige Criteria for Performance Excellence, identifying opportunities for improvement.
   
  
• In FY 2004, PBGC will administer the Gallup Q12 Survey, and implement resulting improvement strategies to improve employee engagement, increase productivity and reduce staff turnover.
   
  
• PBGC will continue to use evaluation methods such as the Baldridge Assessment and OMB’s Performance Assessment Rating Tool (PART), to realize improvements in performance.