Pension Benefit Guaranty Corporation
A More Strategic Approach Could Improve Human Capital Management Gao ID: GAO-08-624 June 12, 2008The Pension Benefit Guaranty Corporation (PBGC) employs over 800 federal employees and uses some 1,500 private sector employees to insure the pensions of millions of private sector workers and retirees in certain employer-sponsored pension plans. In recent years, PBGC's projected financial liabilities and workloads have increased greatly due to a large number of pension plan terminations. Given this, it is important that PBGC remain well positioned to fulfill its promise to those retirees who depend on it. GAO was asked to report on (1) PBGC's recent experience in hiring and retaining key staff and how it compares to other federal agencies and (2) the actions PBGC has taken to strategically hire and retain key staff and what additional steps, if any, can be taken. To do this, we analyzed PBGC's workforce by using the Office of Personnel Management's (OPM) Central Personnel Data File to identify data and compared those data to data from other federal agencies. We also interviewed officials from selected agencies, including PBGC, OPM, and the Department of Labor.
From fiscal years2000to 2007, PBGC was generally able to hire staff in its key occupations--such as accountants, actuaries, and attorneys--and retain them at rates similar to those of the rest of the federal government. However, PBGC has had some difficulty with hiring and retaining staff for specific occupations and positions, including executives and senior financial analysts. Despite the general ability to hire and retain key staff, data also suggest that PBGC may be faced with workforce challenges; these include managing a workforce with relatively few years of federal experience, the prospect of nearly one-quarter of its key staff retiring within the next 4 years, and difficulty hiring and retaining key staff in the future due to PBGC's existing compensation structure, which offers salaries lower than some federal agencies that employ similar staff, such as the Federal Deposit Insurance Corporation. While PBGC is making progress in its human capital management approachby taking steps to improve its human capital planning and practices--such as drafting a succession management plan--the corporation lacks a formal, comprehensive human capital plan that integrates several critical components such as workforce planning. Also, even though it collects workforce data, PBGC has not routinely and systematically targeted and analyzed all necessary workforce data--such as attrition rates, occupational skills mix, and trends--to understand its current and future workforce needs. Instead, officials stated that they generally reacted to management personnel requests, and developed human capital data as needed. In addition to limited planning and data analysis, PBGC has not fully explored all available compensation options under its existing statutory authority, even though officials say and data suggest that the corporation's current compensation structure may limit its ability to hire and retain certain key staff.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-08-624, Pension Benefit Guaranty Corporation: A More Strategic Approach Could Improve Human Capital Management
This is the accessible text file for GAO report number GAO-08-624
entitled 'Pension Benefit Guaranty Corporation: A More Strategic
Approach Could Improve Human Capital Management' which was released on
July 14, 2008.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
Report to Congressional Committees:
United States Government Accountability Office:
GAO:
June 2008:
Pension Benefit Guaranty Corporation:
A More Strategic Approach Could Improve Human Capital Management:
GAO-08-624:
GAO Highlights:
Highlights of GAO-08-624, a report to congressional committees.
Why GAO Did This Study:
The Pension Benefit Guaranty Corporation (PBGC) employs over 800
federal employees and uses some 1,500 private sector employees to
insure the pensions of millions of private sector workers and retirees
in certain employer-sponsored pension plans. In recent years, PBGC‘s
projected financial liabilities and workloads have increased greatly
due to a large number of pension plan terminations. Given this, it is
important that PBGC remain well positioned to fulfill its promise to
those retirees who depend on it. GAO was asked to report on (1) PBGC‘s
recent experience in hiring and retaining key staff and how it compares
to other federal agencies and (2) the actions PBGC has taken to
strategically hire and retain key staff and what additional steps, if
any, can be taken. To do this, we analyzed PBGC‘s workforce by using
the Office of Personnel Management‘s (OPM) Central Personnel Data File
to identify data and compared those data to data from other federal
agencies. We also interviewed officials from selected agencies,
including PBGC, OPM, and the Department of Labor.
What GAO Found:
From fiscal years 2000 to 2007, PBGC was generally able to hire staff
in its key occupations”such as accountants, actuaries, and
attorneys”and retain them at rates similar to those of the rest of the
federal government. However, PBGC has had some difficulty with hiring
and retaining staff for specific occupations and positions, including
executives and senior financial analysts. Despite the general ability
to hire and retain key staff, data also suggest that PBGC may be faced
with workforce challenges; these include managing a workforce with
relatively few years of federal experience, the prospect of nearly one-
quarter of its key staff retiring within the next 4 years, and
difficulty hiring and retaining key staff in the future due to PBGC‘s
existing compensation structure, which offers salaries lower than some
federal agencies that employ similar staff, such as the Federal Deposit
Insurance Corporation.
Figure: PBGC Attrition Rates Compared to Those of the Rest of the
Federal Government and Federal Financial Regulators, Fiscal Years 2000
to 2007:
[See PDF for image]
This figure is a multiple vertical bar graph depicting the following
data:
Key occupation: All key occupations;
PBGC attrition rate: 5.98%;
Other federal agencies attrition rate: 6.03%;
Federal financial regulators attrition rate: 7.74%.
Key occupation: Accountant;
PBGC attrition rate: 6.99%;
Other federal agencies attrition rate: 7.03%;
Federal financial regulators attrition rate: 6.3%.
Key occupation: Actuary[A];
PBGC attrition rate: 4.7%;
Other federal agencies attrition rate: 4.19%;
Federal financial regulators attrition rate: [Empty].
Key occupation: Attorney;
PBGC attrition rate: 6.12%;
Other federal agencies attrition rate: 6.12%;
Federal financial regulators attrition rate: 8.87%.
Key occupation: Auditor;
PBGC attrition rate: 6.46%;
Other federal agencies attrition rate: 7.89%;
Federal financial regulators attrition rate: 9.35%.
Key occupation: Executive;
PBGC attrition rate: 9.83%;
Other federal agencies attrition rate: 10.07%;
Federal financial regulators attrition rate: 6.28%.
Key occupation: Financial analyst;
PBGC attrition rate: 8.39%;
Other federal agencies attrition rate: 4.04%;
Federal financial regulators attrition rate: 5.46%.
Key occupation: Information technology specialist;
PBGC attrition rate: 5.42%;
Other federal agencies attrition rate: 5.62%;
Federal financial regulators attrition rate: 6.94%.
Key occupation: Pension law specialist[A];
PBGC attrition rate: 4.91%;
Other federal agencies attrition rate: 8.34%;
Federal financial regulators attrition rate: [Empty].
Source: GAO analysis of Central Personnel Data File data.
[A] Data indicated that the financial regulators did not employ
actuaries or pension law specialists from 2000 to 2007.
[End of figure]
While PBGC is making progress in its human capital management approach
by taking steps to improve its human capital planning and
practices”such as drafting a succession management plan”the corporation
lacks a formal, comprehensive human capital plan that integrates
several critical components such as workforce planning. Also, even
though it collects workforce data, PBGC has not routinely and
systematically targeted and analyzed all necessary workforce data”such
as attrition rates, occupational skills mix, and trends”to understand
its current and future workforce needs. Instead, officials stated that
they generally reacted to management personnel requests, and developed
human capital data as needed. In addition to limited planning and data
analysis, PBGC has not fully explored all available compensation
options under its existing statutory authority, even though officials
say and data suggest that the corporation‘s current compensation
structure may limit its ability to hire and retain certain key staff.
What GAO Recommends:
GAO recommends that PBGC integrate workforce and succession planning
into its human capital planning approach, systematically collect and
analyze necessary workforce data, and fully explore compensation
options under its statutory authority. In response, PBGC generally
concurred with our recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-624]. For more
information, contact Barbara Bovbjerg, 202-512-7215, bovbjergb@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
PBGC Has Generally Been Able To Hire and Retain Key Staff, but May Face
Workforce and Compensation Challenges in the Future:
PBGC May Face Workforce Challenges Regarding Key Staff Experience,
Retirement Eligibility, and Compensation Limitations:
PBGC Has Taken Some Steps to Strategically Manage Its Workforce, but
Has Not Prepared for Possible Workforce and Compensation Challenges:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: List of Federal Financial Regulators and their Mission:
Appendix III: Elements of Strategic Human Capital Management:
Appendix IV: Minimum and Maximum Pay Ranges and Average Basic Pay for
Critical Occupations by Selected Federal Agency:
Appendix V: Selected Compensation Flexibilities and Authorities
Available in the Federal Government:
Appendix VI: Comments from the Pension Benefit Guaranty Corporation:
Appendix VII: Contacts and Acknowledgments:
Related GAO Products:
Tables:
Table 1: Percentage of PBGC Employees per Key Occupation--Fiscal Years
2004-2007:
Table 2: Percentage of Staffs' Years of Federal Experience by Key
Occupation, Fiscal Year 2007:
Figures:
Figure 1: PBGC Attrition Rates Compared to Those at Other Federal
Agencies and the Federal Financial Regulators, Fiscal Years 2000 to
2007:
Figure 2: Comparison of Overall Attrition Rates for Key Occupations,
Fiscal Years 2000 to 2007:
Figure 3: Comparison of New Hires Remaining, by Occupation, at PBGC and
Other Federal Agencies, Fiscal Years 2000 through 2007:
Figure 4: Type of Separation for Staff in Key Occupations at PBGC and
Other Federal Agencies Overall, Fiscal Years 2000 Through 2007:
Figure 5: Types of Separation by Key Occupation for PBGC and Other
Federal Executive Branch Agencies, Fiscal Years 2000 through 2007:
Figure 6: Retirement Eligibility of Key PBGC Occupations, Fiscal Years
2012, 2017, and beyond 2017:
Figure 7: Comparison of Key Occupations' Basic Salary Ranges and
Average Basic Salaries for PBGC, Federal Financial Regulators, and
Other Federal Agencies as of September 2007:
Figure 8: Strategic Workforce Planning Process:
Figure 9: Human Capital Cornerstones and Success Factors:
Abbreviations:
CPDF: Central Personnel Data File:
DOL: Department of Labor:
ERISA: Employee Retirement Income Security Act:
FCIC: Federal Crop Insurance Corporation:
FDIC: Federal Deposit Insurance Corporation:
FIRREA: Federal Institutions Reform, Recovery, and Enforcement Act:
FPPS: Federal Personnel and Payroll System:
FRB: Federal Reserve Board:
GS: General Schedule:
HCAAF: Human Capital Assessment and Accountability Framework:
IT: information technology:
NCUA: National Credit Union Administration:
NCUSIF: National Credit Union Share Insurance Fund:
OCC: Office of the Comptroller of the Currency:
OFHEO: Office of Federal Housing Enterprise Oversight:
OMB: Office of Management and Budget:
OPM: Office of Personnel Management:
PBGC: Pension Benefit Guaranty Corporation:
RIF: reduction in force:
SEC: Securities and Exchange Commission:
SES: Senior Executive Service:
SL: Senior Level:
ST: Senior Scientific and Professional:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
June 12, 2008:
The Honorable Max Baucus:
Chairman:
The Honorable Charles E. Grassley:
Ranking Member:
Committee on Finance:
United States Senate:
The Honorable Edward M. Kennedy:
Chairman:
The Honorable Michael B. Enzi:
Ranking Member:
Committee on Health, Education, Labor and Pensions:
United States Senate:
The Pension Benefit Guaranty Corporation (PBGC) insures the pensions of
44 million private sector workers and retirees in over 30,000 employer-
sponsored pension plans. Established with the passage of the Employee
Retirement Income Security Act of 1974 (ERISA), PBGC employs over 800
federal employees and utilizes the services of some 1,500 private
sector employees working for the corporation under various contracts.
These individuals support, in part, the corporation's timely and
uninterrupted payment of pension benefits to thousands of Americans.
PBGC's financial portfolio is one of the largest of any federal
government corporation--in September 2007, its assets totaled almost
$70 billion. Since fiscal year 2000, the number of participants to whom
PBGC has paid benefits has more than doubled and PBGC's projected
financial liabilities have increased significantly due to a large
number of companies terminating their pension plans.
Although PBGC has taken steps to address its projected financial
liabilities, the accumulated large and growing deficits resulting from
the termination of several large plans in recent years continue to
threaten PBGC's solvency. In prior GAO work, we have highlighted how
these losses may have significant implications for retirement security
and the federal budget. In fact, in 2003, we added PBGC's single-
employer pension insurance program--its largest insurance program--to
our high-risk list, a group of federal programs that need urgent
attention and transformation. PBGC's single-employer insurance program
remains on the high-risk list today.[Footnote 1] As of September 30,
2007, PBGC projected an accumulated deficit of $14.1 billion for both
its single-employer and multi-employer insurance programs.
Given PBGC's liabilities and increased responsibilities, it is
important that PBGC remain well positioned to fulfill its promise to
those retirees who depend on it. Governmentwide, many federal agencies
have lacked a strategic approach that integrates their human capital
efforts with their mission and program goals; therefore, we have also
placed the area of strategic human capital management on our high-risk
list. On the basis of these concerns, we were asked to review PBGC's
human capital approach to recruiting and retaining its federal
workforce. Specifically, this report assesses (1) PBGC's recent
experience in hiring and retaining key staff and how it compares to
that of other federal agencies and (2) what actions PBGC has taken to
strategically hire and retain key staff and what additional steps, if
any, can be taken.
To determine PBGC's recent experience in hiring and retaining staff, we
consulted with PBGC executives and human capital officials to identify
the key occupations critical to conducting its organizational mission.
On the basis of these discussions and in conjunction with a 2002 PBGC
workforce planning team report, it was agreed with PBGC officials that
we would focus on seven occupations--accountants, actuaries, attorneys,
auditors, financial analysts, information technology specialists, and
pension law specialists. To identify trends in PBGC's hiring, we
analyzed data from the Office of Personnel Management's Central
Personnel Data File (CPDF) on PBGC's key occupations from fiscal year
2000 to 2007 and compared that information with that of the rest of the
federal government during the same time period.[Footnote 2] We
determined that the CPDF data were sufficiently reliable for the
purposes of this report. To identify what actions PBGC has taken to
strategically hire and retain staff in key occupations, we reviewed
previous GAO work on strategic human capital management, PBGC's
insurance programs, and the corporation's management challenges.
We also reviewed information on PBGC's organizational objectives and
succession planning goals from PBGC documents, such as annual reports
and workforce and succession documents. For both objectives, we
interviewed officials from PBGC, the Department of Labor (DOL),
representatives of PBGC's board of directors, as well as officials from
Office of Personnel Management (OPM). As part of our work, we
coordinated with OPM on a concurrent review of PBGC human capital
operations. At the time of our review, OPM officials confirmed they
were finalizing a PBGC Human Resource Operations Evaluation. While
OPM's review covered certain aspects of strategic human capital
management, OPM's review also focused on specific human capital
programs, such as competitive examining.[Footnote 3] OPM officials
stated they would be presenting findings and working with PBGC on
corrective measures to improve the corporation's human capital program.
We conducted this performance audit from July 2007 to June 2008 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives. Appendix I discusses our
scope and methodology in further detail.
Results in Brief:
From fiscal years 2000 to 2007, PBGC was generally able to hire and
retain mission critical staff--such as accountants, actuaries, and
attorneys--yet the corporation may face workforce and compensation
challenges in the future. While PBGC has been able to hire staff for
most of its key occupations, PBGC officials stated that the corporation
has had difficulty hiring staff for specific occupations and positions,
including senior financial analysts and executives. Further, while PBGC
retained staff in most key occupations and its overall attrition rate
was similar to that of the rest of the federal government, its average
attrition rate for financial analysts was more than double the rate for
the rest of the federal government. Despite the general ability to hire
and retain key staff, data also suggest that PBGC may be faced with
workforce challenges in the future; these include managing a workforce
with relatively few years of federal experience, facing the prospect of
nearly one-quarter of its key staff retiring within the next 4 years,
and experiencing difficulty hiring and retaining staff due to the
corporation's existing compensation structure, which offers salaries
lower than some other federal agencies that utilize similar types of
occupations, such as the Federal Deposit Insurance Corporation and the
Securities and Exchange Commission.
While PBGC is making progress in its human capital management approach
by taking steps to improve its human capital planning and practices--
such as drafting a succession management plan--the corporation still
lacks a formal, comprehensive human capital plan that integrates
critical components like workforce planning and succession management.
PBGC officials told us that they intend to have a draft human capital
plan by the end of fiscal year 2008. In addition, although PBGC
collects workforce data, the corporation has not routinely and
systematically targeted and analyzed some important workforce data--
such as attrition rates, occupational skills mix, and trends--necessary
to create an overall workforce profile in an effort to better
understand its current and potential future workforce needs. Instead,
PBGC human capital officials stated that they generally reacted to
managers' personnel requests and developed human capital data as
needed. In addition to limited planning and data analyses, we found
that PBGC has not fully explored all available compensation options
with the Office of Personnel Management, such as critical position pay
authority, to determine whether such authorities are applicable and
appropriate, even though officials said that the corporation's current
compensation structure limits its ability to hire and retain certain
key staff.
We are making several recommendations to PBGC that are intended to
strengthen the corporation's human capital program. These include
integrating workforce planning and succession planning into its
development of a formal human capital planning approach, systematically
collecting and analyzing workforce data, and fully exploring all
compensation options currently available within its statutory authority
to determine whether such authorities are applicable or appropriate. In
response to our draft report, PBGC generally concurred with our
recommendations and outlined the actions the corporation has underway
or plans to take with regard to them. Specifically, PBGC stated that
the corporation was already taking steps to better manage its
workforce, particularly with regard to its human capital succession
planning and workforce data analysis. Moreover, the corporation
committed to continue to explore appropriate compensation options and
maintain a dialogue with OPM, the Office of Management and Budget, and
members of PBGC's board of directors. PBGC's comments are reproduced in
appendix VI.
Background:
Congress passed ERISA to protect the interests of participants and
beneficiaries of private sector employee benefit plans. Before the
enactment of ERISA, few rules governed the funding of defined benefit
pension plans,[Footnote 4] and participants had no guarantee that they
would receive promised benefits. Title IV of ERISA created PBGC to
insure private sector plan participants' benefits.[Footnote 5] PBGC
receives no funds from general tax revenues. Instead, operations are
financed by insurance premiums set by Congress and paid by sponsors of
defined benefit plans, investment income, assets from pension plans
trusteed by PBGC, and recoveries from the companies formerly
responsible for the plans.
Since its inception, PBGC's workloads have increased significantly. In
fiscal year 1975, PBGC administered three pension plans covering a
total of 400 participants. By fiscal year 2007, PBGC administered
almost 3,800 pension plans, incurring responsibility for more than 1.3
million participants. To service this increased workload, PBGC employed
847 federal employees in fiscal year 2007 working across several
divisions. Of the 847, PBGC's key staff totaled 486, of which
approximately 10 percent were attorneys, 7.2 percent were accountants,
and 3.4 percent were financial analysts (see table 1).
Table 1: Percentage of PBGC Employees per Key Occupation--Fiscal Years
2004-2007:
Key: occupation: Accountant;
2004: Number of staff: 55;
2004: Percent: 6.9;
2005: Number of staff: 57;
2005: Percent: 7.1;
2006: Number of staff: 61;
2006: Percent: 7.2;
2007: Number of staff: 61;
2007: Percent: 7.2.
Key: occupation: Actuary;
2004: Number of staff: 73;
2004: Percent: 9.1;
2005: Number of staff: 83;
2005: Percent: 10.3;
2006: Number of staff: 83;
2006: Percent: 9.8;
2007: Number of staff: 87;
2007: Percent: 10.3.
Key: occupation: Attorney;
2004: Number of staff: 79;
2004: Percent: 9.9;
2005: Number of staff: 83;
2005: Percent: 10.3;
2006: Number of staff: 92;
2006: Percent: 10.9;
2007: Number of staff: 85;
2007: Percent: 10.0.
Key: occupation: Auditor;
2004: Number of staff: 86;
2004: Percent: 10.8;
2005: Number of staff: 90;
2005: Percent: 11.2;
2006: Number of staff: 88;
2006: Percent: 10.4;
2007: Number of staff: 88;
2007: Percent: 10.4.
Key: occupation: Executive;
2004: Number of staff: 27;
2004: Percent: 3.4;
2005: Number of staff: 26;
2005: Percent: 3.2;
2006: Number of staff: 31;
2006: Percent: 3.7;
2007: Number of staff: 34;
2007: Percent: 4.0.
Key: occupation: Financial analyst;
2004: Number of staff: 30;
2004: Percent: 3.8;
2005: Number of staff: 25;
2005: Percent: 3.1;
2006: Number of staff: 30;
2006: Percent: 3.5;
2007: Number of staff: 29;
2007: Percent: 3.4.
Key: occupation: Information technology specialist;
2004: Number of staff: 56;
2004: Percent: 7.0;
2005: Number of staff: 69;
2005: Percent: 8.6;
2006: Number of staff: 74;
2006: Percent: 8.7;
2007: Number of staff: 71;
2007: Percent: 8.4.
Key: occupation: Pension law specialist;
2004: Number of staff: 48;
2004: Percent: 6.0;
2005: Number of staff: 43;
2005: Percent: 5.3;
2006: Number of staff: 36;
2006: Percent: 4.3;
2007: Number of staff: 31;
2007: Percent: 3.7.
Key: occupation: Total Key Staff;
2004: Number of staff: 454;
2004: Percent: 56.8;
2005: Number of staff: 476;
2005: Percent: 59.1;
2006: Number of staff: 495;
2006: Percent: 58.5;
2007: Number of staff: 486;
2007: Percent: 57.4.
Source: GAO analysis of CPDF.
[End of table]
PBGC also relies heavily on the services of a variety of private sector
contractors to assist in its mission. As of June 2007, these
contractors accounted for 64 percent of PBGC's total workforce. In
fiscal year 2007, PBGC reportedly spent $297 million (75 percent) of
its $398.3 million operating budget for contracting and related
expenses. In addition to operating PBGC's 10 field benefit
administration offices throughout the country, private sector
contractors supplement federal staff at the corporation's headquarters
and a call center facility.
PBGC, like many executive branch agencies, is subject to the General
Schedule and the federal pay system.[Footnote 6] In contrast, certain
federal financial regulatory agencies, including the Federal Deposit
Insurance Corporation (FDIC), the Office of the Comptroller of the
Currency (OCC), the National Credit Union Administration (NCUA), and
the Securities and Exchange Commission (SEC), have the flexibility to
establish their own compensation programs outside the various statutory
provisions on classification and pay for executive branch agencies.
(See app. II for a list and description of the federal financial
regulatory agencies.) These financial regulatory agencies are generally
required to seek to maintain pay comparability with each other.
[Footnote 7]
In June 2007, we examined the actions these agencies have taken to
assess and implement comparability in pay and benefits with each other.
[Footnote 8] While PBGC has unique responsibilities pertaining to
insuring certain employee defined benefit pensions, some of these
federal financial regulators highlighted under the Federal Institutions
Reform, Recovery, and Enforcement Act of 1989 (FIRREA), such as FDIC
and NCUA, also have insurance programs and funds. Further, PBGC employs
occupations not only similar to those of the FIRREA agencies, but also
to those of SEC, the Office of Federal Housing Enterprise Oversight
(OFHEO), and the Federal Reserve Board (FRB).
While human capital authorities and flexibilities vary governmentwide,
we have noted in our prior work that there are two key principles that
remain central to the human capital idea.[Footnote 9] First, people are
assets whose value can be enhanced through investment, and second, an
organization's human capital policies must be aligned to support the
organization's "shared vision"--that is, the mission, vision for the
future, core values, goals and objectives, and strategies by which the
organization has defined its direction and expectations for itself and
its people. As noted in the report, all human capital policies and
practices should be designed, implemented, and assessed by the standard
of how well they help the organization pursue its shared vision.
We have also reported that strategic workforce planning generally
addresses the alignment of an organization's human capital program with
its current and emerging mission and programmatic goals and the
development of long-term strategies for acquiring, developing,
motivating, and retaining staff to achieve programmatic goals.[Footnote
10] There are a variety of models of how federal agencies can conduct
workforce planning, but certain key principles are generally common to
such planning:
* involving top management, employees, and other stakeholders in
developing, communicating, and implementing the strategic workforce
plan;
* determining skills and competencies needed in the future workforce to
meet the organization's goals and identifying gaps in skills and
competencies that an organization needs to address;
* selecting and implementing human capital strategies that are targeted
toward addressing these gaps and issues;
* building the capacity needed to address administrative, educational,
and other requirements important to support workforce planning
strategies; and:
* evaluating the success of the human capital strategies.
According to our strategic human capital management model, self-
assessment is the starting point for creating "human capital
organizations"--agencies that focus on valuing employees and aligning
"people policies" to support organizational performance goals. Part of
the impetus for creating human capital organizations comes from the
Government Performance and Results Act of 1993,[Footnote 11] but
agencies themselves must follow through on tailoring their human
capital systems to their specific missions, visions for the future,
core values, objectives, and strategies. To strategically manage an
agency's human capital approach, there are certain planning documents
an agency can utilize:
* Strategic mission plan: An overall agency strategic plan includes a
clear and coherent shared vision of an agency's mission, goals, values,
and strategies that is clearly and consistently communicated and
reinforced to all employees.
* Human capital strategic plan: A coherent human capital strategic
plan, integrated with the agency's overall strategic planning, outlines
a framework of human capital policies, programs, and practices
specifically designed to steer the agency toward achieving its shared
vision.
* Succession plan: A formal succession plan includes a review of the
agency's current and emerging leadership needs in light of its
strategic and program planning, identifies sources of executive talent
both within and outside the agency, and includes planned development
opportunities, learning experiences, and feedback for executive
candidates.
* Workforce plan: A workforce planning document, linked to the agency's
strategic and program planning efforts, identifies its current and
future human capital needs, including the size of the workforce; its
deployment across the organization; and the knowledge, skills, and
abilities needed for the agency to pursue its shared vision.
Appendix III discusses elements of GAO's human capital framework in
further detail.
PBGC Has Generally Been Able To Hire and Retain Key Staff, but May Face
Workforce and Compensation Challenges in the Future:
From fiscal years 2000 to 2007, PBGC was generally able to hire and
retain staff in its key occupations, but the corporation has had some
difficulty hiring and retaining financial analysts and certain other
staff. Despite difficulty in these areas, PBGC's overall ability to
retain staff in key occupations has been similar to that of the rest of
the federal government. However, our analysis suggests that PBGC may
face several workforce and compensation challenges in the future--such
as (1) a workforce with relatively fewer years of federal experience,
(2) the possible retirement of up to a quarter of its workforce within
the next 4 years, and (3) the potential difficulty of hiring and
retaining staff due to the corporation's existing compensation
structure, which offers salaries lower than those of some other
executive branch agencies that employ similar staff.
PBGC Has Generally Been Able to Hire Staff for Key Occupations, but Has
Experienced Difficulties in Filling Certain Positions:
From fiscal years 2000 to 2007, PBGC was generally able to hire staff
for occupations it views as key to its organizational mission--
accountants, actuaries, attorneys, auditors, financial analysts,
information technology specialists, and pension law specialists. Our
analysis of OPM's CPDF found that from fiscal years 2000 to 2007, PBGC
hired 289 employees in these key occupations, compared to 203 employees
in those occupations who left PBGC. Of these, PBGC hired more people
than it lost in each of the key occupations except for attorneys and
pension law specialists. Additionally, PBGC officials stated that data
indicated that it was able to fill 65 percent of its vacancies in
fiscal year 2007 across all occupations within 45 days of the close of
the announcement of the job vacancy, exceeding OPM's government
standard of 60 percent for that year.[Footnote 12] However, PBGC
officials emphasized that the 45-day hiring model, which includes data
across all occupations, can hide the corporation's inability to fill
certain key positions.[Footnote 13]
PBGC officials acknowledged that the corporation was generally able to
hire people for most of its key occupations, but they stated they have
had difficulty filling certain positions like the chief financial
officer, senior financial analyst, systems accountant, and procurement
attorney. To address this difficulty, PBGC officials stated that the
corporation has left some positions unfilled and on occasion has hired
individuals who required in-house training.
PBGC's Overall Attrition Rate Is Similar to Those of Other Federal
Agencies, but Rates Differ for Certain Key Occupations:
From fiscal year 2000 to 2007, PBGC retained staff at rates similar to
the rest of the federal government for the corporation's key
occupations. PBGC's overall average attrition rate was about 6 percent
for these occupations, roughly equal to that of other federal agencies
over that period (see fig. 1).[Footnote 14] For example, for
occupations like attorneys and information technology specialists, the
attrition rates were similar to those of other federal executive branch
agencies. Likewise, the attrition rates for PBGC's executives were
similar to those of other federal executive branch agencies. Our
analysis also found that PBGC's overall attrition experience was
comparable to those at the federal financial regulatory agencies--such
as FDIC and SEC. However, attrition rates did differ for certain key
occupations. For example, PBGC's attrition rates for financial analysts
were greater than those of other agencies, with an average attrition
rate of 8.4 percent, compared to 3.7 percent in other federal executive
branch agencies governmentwide, and 5.5 percent for the financial
regulators.
Figure 1: PBGC Attrition Rates Compared to Those at Other Federal
Agencies and the Federal Financial Regulators, Fiscal Years 2000 to
2007:
[See PDF for image]
This figure is a multiple vertical bar graph depicting the following
data:
Key occupation: All key occupations;
PBGC attrition rate: 5.98%;
Other federal agencies attrition rate: 6.03%;
Federal financial regulators attrition rate: 7.74%.
Key occupation: Accountant;
PBGC attrition rate: 6.99%;
Other federal agencies attrition rate: 7.03%;
Federal financial regulators attrition rate: 6.3%.
Key occupation: Actuary[A];
PBGC attrition rate: 4.7%;
Other federal agencies attrition rate: 4.19%;
Federal financial regulators attrition rate: [Empty].
Key occupation: Attorney;
PBGC attrition rate: 6.12%;
Other federal agencies attrition rate: 6.12%;
Federal financial regulators attrition rate: 8.87%.
Key occupation: Auditor;
PBGC attrition rate: 6.46%;
Other federal agencies attrition rate: 7.89%;
Federal financial regulators attrition rate: 9.35%.
Key occupation: Executive;
PBGC attrition rate: 9.83%;
Other federal agencies attrition rate: 10.07%;
Federal financial regulators attrition rate: 6.28%.
Key occupation: Financial analyst;
PBGC attrition rate: 8.39%;
Other federal agencies attrition rate: 4.04%;
Federal financial regulators attrition rate: 5.46%.
Key occupation: Information technology specialist;
PBGC attrition rate: 5.42%;
Other federal agencies attrition rate: 5.62%;
Federal financial regulators attrition rate: 6.94%.
Key occupation: Pension law specialist[A];
PBGC attrition rate: 4.91%;
Other federal agencies attrition rate: 8.34%;
Federal financial regulators attrition rate: [Empty].
Source: GAO analysis of Central Personnel Data File data.
[A] CPDF data did not show that the federal financial regulators
employed actuaries or pension law specialists from 2000 to 2007.
[End of figure]
Further, over the last 3 years, PBGC's and other executive branch
agencies' overall attrition rates were higher than their 8-year
averages, which were nearly identical, as shown in figure 2, while the
rates for the federal regulators collectively dipped below their 8-year
average in 2007 (see fig. 2).
Figure 2: Comparison of Overall Attrition Rates for Key Occupations,
Fiscal Years 2000 to 2007:
[See PDF for image]
This figure is a multiple vertical bar graph depicting the following
data:
PBGC average attrition rate, 2000-2007: approximately 6%;
Other federal agency attrition rate, 2000-2007: approximately 6%;
Federal financial regulatory average attrition rate, 2000-2007:
approximately 8%.
Fiscal year: 2000;
Attrition rate, PBGC: 7.24%;
Attrition rate, rest of federal government: 6.77%;
Attrition rate, Financial regulators: 11.11%.
Fiscal year: 2001;
Attrition rate, PBGC: 6.2%;
Attrition rate, rest of federal government: 5.51%;
Attrition rate, Financial regulators: 7.01%.
Fiscal year: 2002;
Attrition rate, PBGC: 3.22%;
Attrition rate, rest of federal government: 4.69%;
Attrition rate, Financial regulators: 9.25%.
Fiscal year: 2003;
Attrition rate, PBGC: 3.14%;
Attrition rate, rest of federal government: 4.97%;
Attrition rate, Financial regulators: 4.5%.
Fiscal year: 2004;
Attrition rate, PBGC: 5.95%;
Attrition rate, rest of federal government: 5.81%;
Attrition rate, Financial regulators: 5.43%.
Fiscal year: 2005;
Attrition rate, PBGC: 9%;
Attrition rate, rest of federal government: 6.67%;
Attrition rate, Financial regulators: 9.39%.
Fiscal year: 2006;
Attrition rate, PBGC: 6.08%;
Attrition rate, rest of federal government: 6.85%;
Attrition rate, Financial regulators: 8.16%.
Fiscal year: 2007;
Attrition rate, PBGC: 7.39%;
Attrition rate, rest of federal government: 6.95%;
Attrition rate, Financial regulators: 6.94%.
Source: GAO analysis of CPDF data.
[End of figure]
PBGC's attrition rates for staff hired from fiscal years 2000 to 2007
were also similar to rates at other federal executive branch agencies.
For the seven key occupations collectively, a total of 10.8 percent of
key PBGC staff hired from fiscal years 2000 to 2007 left during their
first 2 years of employment, roughly equal to staff in these positions
at other federal executive branch agencies. However, at PBGC, only 60
percent of financial analysts remained; a rate lower than for the six
other key occupations hired during these 8 years (see fig. 3).
Figure 3: Comparison of New Hires Remaining, by Occupation, at PBGC and
Other Federal Agencies, Fiscal Years 2000 through 2007:
[See PDF for image]
This figure is a multiple vertical bar graph depicting the following
data:
Occupation: Accountant;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, PBCG: 74.6%;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, Other federal agencies: 80.4%.
Occupation: Actuary;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, PBCG: 83.3%;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, Other federal agencies: 86.1%.
Occupation: Attorney;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, PBCG: 90.3%;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, Other federal agencies: 77.7%.
Occupation: Auditor;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, PBCG: 84.2%;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, Other federal agencies: 75.1%.
Occupation: Financial analyst;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, PBCG: 60%;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, Other federal agencies: 80.7%.
Occupation: Information technology specialist;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, PBCG: 86%;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, Other federal agencies: 81.9%.
Occupation: Pension law specialist;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, PBCG: 100%;
Percentage of those hired between 2000 and 2007 remaining at agency in
2007, Other federal agencies: 55.3%.
Source: GAO analysis of CPDF data.
[End of figure]
In reviewing staff separations from the corporation, we found that
departing PBGC staff in key occupations were more likely to resign from
federal employment--for example, seeking employment outside the federal
government--than their counterparts in other federal agencies (see fig.
4). We could not determine where employees that resigned from the
federal government moved to because CPDF does not include information
on employment outside the federal government. However, PBGC officials
indicated that while they do not systematically track the employment of
all their employees after separation, it was common for employees to
find employment with private sector entities after leaving PBGC.
Our analysis also found that during the same time period, key staff
departing from PBGC were slightly more likely than staff from other
agencies to transfer to another federal agency (see fig. 4). However,
no identifiable pattern existed among the specific federal agencies to
which PBGC staff transferred. In fact, from fiscal year 2000 to 2007,
CPDF data showed that 47 PBGC staff in key occupations transferred to
23 different federal agencies and only one of those agencies--the
Department of Labor--employed more than 5 of these staff. On the basis
of the results of PBGC's voluntary exit surveys and additional
information collected by PBGC officials, employees frequently cited
greater pay as a reason why they left PBGC for the private sector or
another federal agency.
Figure 4: Type of Separation for Staff in Key Occupations at PBGC and
Other Federal Agencies Overall, Fiscal Years 2000 Through 2007:
[See PDF for image]
This figure contains two pie-charts depicting the following data:
Type of Separation for Staff in Key Occupations at PBGC, Fiscal Years
2000 Through 2007:
Resignations: 42%;
Retirements: 33%;
Transfers to another federal agency: 23%;
Fired, reduction in force, and other separations: 2%.
Type of Separation for Staff in Key Occupations at Other Federal
Agencies Overall, Fiscal Years 2000 Through 2007:
Resignations: 29%;
Retirements: 45%;
Transfers to another federal agency: 20%;
Fired, reduction in force, and other separations: 6%.
Source: GAO analysis of CPDF data.
[End of figure]
Further differences existed in PBGC's seven key occupations with
respect to whether departing staff retired, transferred to another
agency, or otherwise resigned. According to CPDF data, resignations
accounted for 83 percent of separations for financial analysts, the
highest rate of any key occupation, while resignations accounted for
just 13 percent of auditors' separations. Other federal agencies also
experienced varied rates across occupations with respect to types of
separations (see fig. 5).
Figure 5: Types of Separation by Key Occupation for PBGC and Other
Federal Executive Branch Agencies, Fiscal Years 2000 through 2007:
[See PDF for image]
This figure is a stacked vertical bar graph depicting the following
data:
Occupation: Accountant, PBCG;
Resignations: 39%;
Retirements: 32%;
Transfers to another federal agency: 29%;
Fired, reduction in force, and other separations: 0.
Occupation: Accountant, other federal agencies;
Resignations: 16%;
Retirements: 45%;
Transfers to another federal agency: 34%;
Fired, reduction in force, and other separations: 5%.
Occupation: Actuary, PBGC;
Resignations: 71%;
Retirements: 14%;
Transfers to another federal agency: 14%;
Fired, reduction in force, and other separations: 0.
Occupation: Actuary, other federal agencies;
Resignations: 39%;
Retirements: 50%;
Transfers to another federal agency: 7%;
Fired, reduction in force, and other separations: 5%.
Occupation: Attorney, PBGC;
Resignations: 66%;
Retirements: 13%;
Transfers to another federal agency: 21%;
Fired, reduction in force, and other separations: 0.
Occupation: Attorney, other federal agencies;
Resignations: 55%;
Retirements: 25%;
Transfers to another federal agency: 16%;
Fired, reduction in force, and other separations: 4%.
Occupation: Auditor, PBGC;
Resignations: 13%;
Retirements: 53%;
Transfers to another federal agency: 30%;
Fired, reduction in force, and other separations: 4%.
Occupation: Auditor, other federal agencies;
Resignations: 29%;
Retirements: 39%;
Transfers to another federal agency: 27%;
Fired, reduction in force, and other separations: 5%.
Occupation: Financial analyst, PBGC;
Resignations: 83%;
Retirements: 6%;
Transfers to another federal agency: 11%;
Fired, reduction in force, and other separations: 0.
Occupation: Financial analyst, other federal agencies;
Resignations: 24%;
Retirements: 51%;
Transfers to another federal agency: 19%;
Fired, reduction in force, and other separations: 7%.
Occupation: Information technology specialist, PBGC;
Resignations: 17%;
Retirements: 30%;
Transfers to another federal agency: 48%;
Fired, reduction in force, and other separations: 4%.
Occupation: Information technology specialist, other federal agencies;
Resignations: 21%;
Retirements: 55%;
Transfers to another federal agency: 17%;
Fired, reduction in force, and other separations: 7%.
Occupation: Pension law specialist, PBGC;
Resignations: 19%;
Retirements: 76%;
Transfers to another federal agency: 0;
Fired, reduction in force, and other separations: 5%.
Occupation: Pension law specialist, other federal agencies;
Resignations: 71%;
Retirements: 22%;
Transfers to another federal agency: 7%;
Fired, reduction in force, and other separations: 0.
Source: GAO analysis of CPDF data.
Note: Totals may not add up to 100 due to rounding.
[End of figure]
PBGC May Face Workforce Challenges Regarding Key Staff Experience,
Retirement Eligibility, and Compensation Limitations:
Despite the corporation's overall ability to hire and retain key staff,
our analysis of CPDF data suggests that PBGC may face several workforce
challenges in the future, such as (1) a staff with relatively fewer
years of federal experience, (2) the possibility of losing a
significant number of its key staff due to retirement eligibility, and
(3) potential difficulties hiring and retaining certain staff because
of PBGC's compensation.
First, in fiscal year 2007, PBGC's key staff had relatively fewer years
of federal experience than their counterparts in other federal
executive branch agencies.[Footnote 15] Specifically, according to CPDF
data, overall key PBGC staff had an average of 12.8 years of federal
experience, while staff in similar positions at the other federal
executive branch agencies had 16.8 years of federal experience.
Additionally, we found that while 25 percent of PBGC's accountants had
less than 3 years of experience, only 10 percent of accountants in
other executive branch agencies had similar years of experience. In
fact, for every key occupation except pension law specialist, PBGC had
a greater percentage of staff with less than 3 years of experience
compared to other agencies, though in some cases the differences were
slight (see table 2). Similarly, PBGC's workforce data corroborated
this finding. Our analysis of the corporation's tenure data indicated
that 23.3 percent of accountants, auditors, attorneys, financial
analysts, and actuaries had 3 or fewer years of experience.
Table 2: Percentage of Staffs' Years of Federal Experience by Key
Occupation, Fiscal Year 2007:
Years: 0 to less than 3;
Accountant: PBGC: 25;
Accountant: Other federal agencies: 10;
Actuary: PBGC: 28;
Actuary: Other federal agencies: 21;
Attorney: PBGC: 18;
Attorney: Other federal agencies: 13;
Auditor: PBGC: 23;
Auditor: Other federal agencies: 16;
Financial analyst: PBGC: 24;
Financial analyst: Other federal agencies: 10;
Information technology specialist: PBGC: 11;
Information technology specialist: Other federal agencies: 9;
Pension law specialist: PBGC: 0;
Pension law specialist: Other federal agencies: 10.
Years: 3 to less than 6;
Accountant: PBGC: 13;
Accountant: Other federal agencies: 10;
Actuary: PBGC: 16;
Actuary: Other federal agencies: 13;
Attorney: PBGC: 11;
Attorney: Other federal agencies: 13;
Auditor: PBGC: 11;
Auditor: Other federal agencies: 11;
Financial analyst: PBGC: 7;
Financial analyst: Other federal agencies: 8;
Information technology specialist: PBGC: 20;
Information technology specialist: Other federal agencies: 9;
Pension law specialist: PBGC: 0;
Pension law specialist: Other federal agencies: 17.
Years: 6 to less than 11;
Accountant: PBGC: 20;
Accountant: Other federal agencies: 11;
Actuary: PBGC: 25;
Actuary: Other federal agencies: 14;
Attorney: PBGC: 9;
Attorney: Other federal agencies: 19;
Auditor: PBGC: 10;
Auditor: Other federal agencies: 14;
Financial analyst: PBGC: 21;
Financial analyst: Other federal agencies: 13;
Information technology specialist: PBGC: 15;
Information technology specialist: Other federal agencies: 13;
Pension law specialist: PBGC: 19;
Pension law specialist: Other federal agencies: 24.
Years: 11 to less than 21;
Accountant: PBGC: 23;
Accountant: Other federal agencies: 30;
Actuary: PBGC: 26;
Actuary: Other federal agencies: 26;
Attorney: PBGC: 30;
Attorney: Other federal agencies: 31;
Auditor: PBGC: 38;
Auditor: Other federal agencies: 27;
Financial analyst: PBGC: 34;
Financial analyst: Other federal agencies: 37;
Information technology specialist: PBGC: 32;
Information technology specialist: Other federal agencies: 28;
Pension law specialist: PBGC: 51;
Pension law specialist: Other federal agencies: 25.
Years: 21 or more;
Accountant: PBGC: 20;
Accountant: Other federal agencies: 39;
Actuary: PBGC: 4;
Actuary: Other federal agencies: 26;
Attorney: PBGC: 32;
Attorney: Other federal agencies: 24;
Auditor: PBGC: 18;
Auditor: Other federal agencies: 32;
Financial analyst: PBGC: 13;
Financial analyst: Other federal agencies: 33;
Information technology specialist: PBGC: 21;
Information technology specialist: Other federal agencies: 42;
Pension law specialist: PBGC: 29;
Pension law specialist: Other federal agencies: 24.
Source: GAO analysis of CPDF.
[End of table]
The limited federal experience may indicate a workforce challenge for
PBGC, because PBGC officials said that it can take entry-level staff 3
to 4 years to reach full productivity. However, PBGC officials added
that the corporation regularly hires individuals with prior private
sector experience, so not all staff with limited tenure at PBGC would
be entry-level staff. For more seasoned staff, PBGC officials said that
there is generally an expectation that such staff will reach full
productivity within a 90-to 120-day time frame. Using CPDF, we could
not determine the extent of an individual's work experience outside of
the federal government.
Second, PBGC faces the prospect of losing a significant number of its
key staff due to retirement eligibility. Over the next 4 years, nearly
one-quarter of PBGC's staff in key occupations will be eligible to
retire. While this rate is lower than that of other federal executive
branch agencies--about 32 percent of staff at other federal executive
branch agencies in these occupations will be eligible to retire in the
next 4 years--retirement eligibility could still present a workforce
challenge for PBGC, because the corporation could lose key
institutional knowledge. According to CPDF data, PBGC's pension law
specialists and attorneys will have the greatest retirement eligibility
over the next 4 years (see fig. 6).
Figure 6: Retirement Eligibility of Key PBGC Occupations, Fiscal Years
2012, 2017, and beyond 2017:
[See PDF for image]
This figure is a stacked vertical bar graph depicting the following
data:
Occupation: Accountant, PBCG;
Eligible for retirement after 2017: 52%;
Eligible for retirement between 2012 and 2017: 29.3%;
Eligible for retirement by 2012: 18.7%.
Occupation: Accountant, other federal agencies;
Eligible for retirement after 2017: 31.7%;
Eligible for retirement between 2012 and 2017: 35.2%;
Eligible for retirement by 2012: 33.1%.
Occupation: Actuary, PBGC;
Eligible for retirement after 2017: 72.4%;
Eligible for retirement between 2012 and 2017: 16.3%;
Eligible for retirement by 2012: 11.2%.
Occupation: Actuary, other federal agencies;
Eligible for retirement after 2017: 37.8%;
Eligible for retirement between 2012 and 2017: 31.3%;
Eligible for retirement by 2012: 30.9%.
Occupation: Attorney, PBGC;
Eligible for retirement after 2017: 33.9%;
Eligible for retirement between 2012 and 2017: 32.3%;
Eligible for retirement by 2012: 33.9%.
Occupation: Attorney, other federal agencies;
Eligible for retirement after 2017: 41.5%;
Eligible for retirement between 2012 and 2017: 31.1%;
Eligible for retirement by 2012: 27.4%.
Occupation: Auditor, PBGC;
Eligible for retirement after 2017: 45.4%;
Eligible for retirement between 2012 and 2017: 28.6%;
Eligible for retirement by 2012: 26.1%.
Occupation: Auditor, other federal agencies;
Eligible for retirement after 2017: 42.4%;
Eligible for retirement between 2012 and 2017: 29.6%;
Eligible for retirement by 2012: 28%.
Occupation: Financial analyst, PBGC;
Eligible for retirement after 2017: 45%;
Eligible for retirement between 2012 and 2017: 27.5%;
Eligible for retirement by 2012: 27.5%.
Occupation: Financial analyst, other federal agencies;
Eligible for retirement after 2017: 35.2%;
Eligible for retirement between 2012 and 2017: 31.8%;
Eligible for retirement by 2012: 33%.
Occupation: Information technology specialist, PBGC;
Eligible for retirement after 2017: 41.4%;
Eligible for retirement between 2012 and 2017: 30.3%;
Eligible for retirement by 2012: 28.3%.
Occupation: Information technology specialist, other federal agencies;
Eligible for retirement after 2017: 32.3%;
Eligible for retirement between 2012 and 2017: 36.1%;
Eligible for retirement by 2012: 31.6%.
Occupation: Pension law specialist, PBGC;
Eligible for retirement after 2017: 28.6%;
Eligible for retirement between 2012 and 2017: 35.7%;
Eligible for retirement by 2012: 35.7%.
Occupation: Pension law specialist, other federal agencies;
Eligible for retirement after 2017: 52.1%;
Eligible for retirement between 2012 and 2017: 27.4%;
Eligible for retirement by 2012: 20.5%.
Occupation: Overall, PBGC;
Eligible for retirement after 2017: 62.9%;
Eligible for retirement between 2012 and 2017: 13.5%;
Eligible for retirement by 2012: 23.5%.
Occupation: Overall, other federal agencies;
Eligible for retirement after 2017: 50.6%;
Eligible for retirement between 2012 and 2017: 17.9%;
Eligible for retirement by 2012: 31.4%.
Source: GAO analysis of CPDF data.
[End of figure]
Third, PBGC may face difficulties in hiring and retaining certain key
staff in the future due to the corporation's existing compensation
structure, which offers salaries lower than some other federal agencies
that employ similar occupations. Specifically, PBGC officials noted
that the corporation--which is subject to the General Schedule--has
lost staff to some federal financial regulators that are not on the
General Schedule and pay higher salaries for these key occupations.
While our analysis found that PBGC has lower pay ranges and lower
average basic salaries (which do not include locality pay) than the
federal financial regulators in these key occupations, CPDF data did
not suggest that large numbers of key PBGC staff were leaving the
corporation for these agencies. In addition, PBGC's data indicated that
just 7 of 99 departing employees (from all occupations, not just key
occupations) transferred to federal financial regulators between fiscal
year 2005 through 2007--PBGC officials said that these 7 employees left
PBGC for increased pay.
While PBGC's average salaries were lower than those at the financial
regulators, PBGC staff collectively have pay ranges and salaries
similar to those in other federal executive branch agencies, many of
which are subject to the General Schedule. For example, salaries for
attorneys, auditors, and executives at other federal agencies were
generally similar to those at PBGC. However, PBGC had higher average
salaries for financial analysts, accountants, and information
technology specialists and lower average salaries for pension law
specialists and actuaries (see fig. 7).
Figure 7: Comparison of Key Occupations' Basic Salary Ranges and
Average Basic Salaries for PBGC, Federal Financial Regulators, and
Other Federal Agencies as of September 2007:
[See PDF for image]
This figure is a contains a graph indicating pay ranges as follows:
Occupation: Accountant;
PBGC: Base salary minimum: $46,974;
PBGC: Base salary maximum: $120,981;
PBGC: Average basic pay: $72,130;
Federal financial regulators: Base salary minimum: $46,111;
Federal financial regulators: Base salary maximum: $175,795;
Federal financial regulators: Average basic pay: $115,444;
Other federal agencies: Base salary minimum: $25,623;
Other federal agencies: Base salary maximum: $145,400;
Other federal agencies: Average basic pay: $68,951.
Occupation: Actuary;
PBGC: Base salary minimum: $25,623;
PBGC: Base salary maximum: $120,981;
PBGC: Average basic pay: $72,131;
Federal financial regulators: Base salary minimum: CPDF did not
indicate that the federal financial regulators employed actuaries as of
September 2007;
Federal financial regulators: Base salary maximum: [Empty];
Federal financial regulators: Average basic pay: [Empty];
Other federal agencies: Base salary minimum: $31,740;
Other federal agencies: Base salary maximum: $168,000;
Other federal agencies: Average basic pay: $91,048.
Occupation: Attorney;
PBGC: Base salary minimum: $71,415;
PBGC: Base salary maximum: $120,981;
PBGC: Average basic pay: $99,724;
Federal financial regulators: Base salary minimum: $61,597;
Federal financial regulators: Base salary maximum: $231,000;
Federal financial regulators: Average basic pay: $129,668;
Other federal agencies: Base salary minimum: $38,824;
Other federal agencies: Base salary maximum: $201,365;
Other federal agencies: Average basic pay: $100,142.
Occupation: Auditor;
PBGC: Base salary minimum: $25,623;
PBGC: Base salary maximum: $108,573;
PBGC: Average basic pay: $67,929;
Federal financial regulators: Base salary minimum: $56,526;
Federal financial regulators: Base salary maximum: $225,000;
Federal financial regulators: Average basic pay: $113,076;
Other federal agencies: Base salary minimum: $25,623;
Other federal agencies: Base salary maximum: $164,467;
Other federal agencies: Average basic pay: $69,844.
Occupation: Executive;
PBGC: Base salary minimum: $111,676;
PBGC: Base salary maximum: $145,400;
PBGC: Average basic pay: $132,456;
Federal financial regulators: Base salary minimum: $125,602;
Federal financial regulators: Base salary maximum: $249,165;
Federal financial regulators: Average basic pay: $181,367;
Other federal agencies: Base salary minimum: $75,446;
Other federal agencies: Base salary maximum: $215,700;
Other federal agencies: Average basic pay: $153,069.
Occupation: Financial analyst;
PBGC: Base salary minimum: $40,118;
PBGC: Base salary maximum: $111,675;
PBGC: Average basic pay: $80,712;
Federal financial regulators: Base salary minimum: $48,807;
Federal financial regulators: Base salary maximum: $168,695;
Federal financial regulators: Average basic pay: $104,690;
Other federal agencies: Base salary minimum: $31,740;
Other federal agencies: Base salary maximum: $120,981;
Other federal agencies: Average basic pay: $71,979.
Occupation: Information technology specialist;
PBGC: Base salary minimum: $31,740;
PBGC: Base salary maximum: $120,981;
PBGC: Average basic pay: $89,501;
Federal financial regulators: Base salary minimum: $46,826;
Federal financial regulators: Base salary maximum: $192,308;
Federal financial regulators: Average basic pay: $102,941;
Other federal agencies: Base salary minimum: $25,161;
Other federal agencies: Base salary maximum: $150,629;
Other federal agencies: Average basic pay: $71,294.
Occupation: Pension law specialist;
PBGC: Base salary minimum: $50,106;
PBGC: Base salary maximum: $82,575;
PBGC: Average basic pay: $64,943;
Federal financial regulators: Base salary minimum: CPDF did not
indicate that the federal financial regulators employed pension
law specialists as of September 2007;
Federal financial regulators: Base salary maximum: [Empty];
Federal financial regulators: Average basic pay: [Empty];
Other federal agencies: Base salary minimum: $38,824;
Other federal agencies: Base salary maximum: $120,981;
Other federal agencies: Average basic pay: $88,510.
Source: GAO analysis of CPDF data.
Notes: The figure shows the minimum base salary and the maximum base
salary of an occupation for which CPDF data indicated that agencies had
staff as of September 2007. These reported base salaries do not include
locality pay or certain other pay, such as retention incentives or spot
awards. The figure does not show the minimum and maximum pay allowed by
statute. However, the maximum pay allowed under the General Schedule in
September 2007, for a GS-15, Step 10, was $120,981 (not including
locality pay). While the General Schedule is the federal government's
main pay system for white collar positions, some employees in certain
other federal agencies, including the federal financial regulatory
agencies, are not in the General Schedule system and have different
possible salary ranges (see GAO-07-678).
Executives include political appointees above GS-15, such as those in
the Senior Executive Service, those in the Senior-Level and Senior
Scientific or Professional pay plans, and equivalent officials.
Different executive pay plans have different pay ceilings. For example,
the Senior Level and Senior Scientific and Professional pay plans (SL
and ST) have lower ceilings than the Senior Executive Service pay plan.
PBGC executives included the Director of PBGC and those in the Senior
Level pay plan. The maximum base pay allowed for SES in 2007 was the
rate for level II of the Executive Schedule ($168,000) for agencies
with a certified performance appraisal system, or the rate for level
III of the Executive Schedule ($154,600) for agencies without a
certified performance appraisal system. The maximum base pay allowed
for SL/ST employees in 2007 was $145,400 (the rate for level IV of the
Executive Schedule). However, SL/ST employees working in the 48
contiguous states also received locality payments ranging from 12.6
percent to 30.3 percent in 2007, depending on location, with locality
rates capped at the rate for level III of the Executive Schedule, or
$154,600.
We submitted the relevant PBGC data to PBGC officials, who concurred
with the basic ranges and averages for PBGC.
[End of figure]
While this information may be informative on a broad scale, the number
of years of experience and general schedule grade level at which PBGC
workers are hired play a significant role in their salaries, as is true
for other federal executive branch agencies on the General Schedule as
well. However, because the financial regulators are not subject to the
General Schedule, these agencies have greater flexibilities in setting
their salaries. (App. IV contains information on minimum and maximum
pay ranges and average salary for mission critical occupations for
selected federal agencies.)
PBGC Has Taken Some Steps to Strategically Manage Its Workforce, but
Has Not Prepared for Possible Workforce and Compensation Challenges:
PBGC has taken some steps in recent years to improve its human capital
planning and practices. These steps have included drafting planning
documents, such as components of a human capital plan like a succession
management directive. However, as of March 2008, the corporation had no
formal, comprehensive human capital plan integrating all necessary
components to prepare for future challenges, nor had it systematically
collected and analyzed its workforce data to identify such challenges.
In addition to limited planning and data, PBGC had not fully explored
all available compensation options under its statutory authority even
though corporation executives stated that PBGC's compensation structure
may hinder it from attracting and retaining key staff.
While PBGC Is Making Progress toward Better Human Capital Management,
No Formal, Comprehensive Human Capital Plan Exists to Prepare for
Future Challenges:
PBGC has taken steps to improve its human capital planning and
practices. These steps have included drafting planning documents, such
as components of a human capital plan like a succession management
directive. In addition, PBGC has included key human capital goals in
its annual report. This report highlights PBGC's initiatives for the
management of human capital, such as ensuring employees have the skills
and competencies needed to support its mission and establishing a
performance-based culture within the corporation. PBGC has made some
progress toward these goals. For instance, PBGC recently hired a new
director of human resources and a new human capital specialist with
expertise in human capital and succession planning. Also, in an effort
to establish a performance-based culture, PBGC linked employees'
performance expectations to corporate goals and objectives in 2007.
Specifically, key PBGC human capital officials, including the Chief
Management Officer, are to be evaluated based on their progress toward
developing strategic human capital plans and policies.
In addition, the human capital office is developing new human capital
policies and practices, including increasing management's involvement
in order to produce better results. Toward that end, a PBGC official
stated that the human capital office is planning to adjust the process
of writing position descriptions so that the human capital specialist
and the department manager can discuss the position's responsibilities
and duties and create job announcements more collaboratively.
Furthermore, PBGC's human capital office has developed and implemented
various recruitment strategies in recent years, such as an outreach
program to colleges and universities and recruitment through federal
internship and fellowship programs. PBGC human capital officials stated
that certain recruitment strategies are being reassessed, with the goal
of increasing their effectiveness.
Despite these actions, the corporation lacks a formal, comprehensive
human capital strategy, articulated in a formal human capital plan that
includes human capital policies, programs, and practices.[Footnote 16]
In our previous work we have identified critical success factors that
agencies should use to manage their workforces strategically.[Footnote
17] The critical success factors are interrelated and mutually
reinforcing so that no human capital issue can be compartmentalized and
addressed in isolation (see app. III). Workforce planning and
succession management, among other things, are critical components of a
comprehensive human capital plan.
Workforce planning uses workforce data to develop long-term strategies
for acquiring, developing, and retaining staff to achieve programmatic
goals and prepare the agency for its current and future needs.[Footnote
18] In 2001, PBGC established a workforce planning team and conducted a
comprehensive review of its future human capital needs in response to a
GAO recommendation in 2000.[Footnote 19] As part of this effort, the
team identified needed skills and future critical needs for the
corporation and prepared a gap analysis for the seven key occupations.
[Footnote 20] From this analysis, the team then determined if and where
workforce gaps existed and formulated corresponding strategies to
address the gaps, all of which was documented in a workforce planning
report drafted in 2002 that was to serve as the basis for its future
ongoing workforce planning efforts. Since that time, the corporation
has conducted little workforce planning and the workforce planning team
has dissolved. However, PBGC has recently done more in the area of
succession planning, with the goal of identifying and developing
appropriate leaders to meet their future challenges.[Footnote 21] In
fact, PBGC human capital officials have drafted a succession management
plan, and the corporation continues to use a program developed in 2002
to prepare staff for PBGC's leadership vacancies.
According to a senior PBGC official, the corporation has lacked a
formal, comprehensive human capital plan in recent years because the
increased workload and demand for qualified staff required the human
capital office to primarily focus on hiring and training new staff,
with little time to strategically plan, and because the human capital
office required a higher level of expertise to develop a comprehensive
human capital strategy. However, PBGC officials stated that because
PBGC has now acquired such expertise with the hiring of a new human
capital director and a new human capital specialist, the corporation
intends to have a formal human capital strategic plan by the end of
fiscal year 2008.
GAO's prior work has shown that high-performing organizations must have
a leadership team committed to human capital management who personally
develop and direct reform and continuously drive improvement.[Footnote
22] Several PBGC officials have undertaken actions to conduct
succession planning within their own departments; however, differing
opinions among PBGC's leadership concerning some aspects of human
capital planning--such as workforce and succession planning--may
complicate and prolong PBGC's strategic efforts. For example, some PBGC
executives conduct departmental succession planning, while others
believe any succession management plan should incorporate a corporate
viewpoint. Our prior work suggests that efforts to address human
capital management are most likely to succeed if an agency's top
management and human capital leaders set the overall direction, pace,
tone, and goals from the outset.[Footnote 23]
Limited Data Analysis on PBGC's Overall Workforce May Hinder Its
Ability to Address Current and Future Human Capital Needs:
PBGC has not routinely and systematically targeted and analyzed all key
workforce data--such as attrition rates, occupational skills mix, and
trends--necessary to create an overall workforce profile that addresses
current and future workforce needs. Instead, PBGC human capital
officials stated that they generally collected personnel data and
reported certain workforce statistics--such as counts of the number of
open positions filled, recruitment and retention incentives used,
workforce diversity, and separation--for top management on a monthly
basis. However, the monthly report does not provide context regarding
the significance of these statistics for the corporation as a whole.
Furthermore, officials stated that they generally conducted in-depth
data collection and analysis in response to requests from the
corporation's executive management. For example, in 2006, PBGC's human
capital office conducted an analysis of the representation of
minorities and women by grade and occupation to target the
corporation's recruitment with the goal of ensuring a diverse
workforce. However, because such analysis has been conducted only
periodically and on requested topics, information on PBGC's overall
workforce trends has been limited and therefore unavailable for
anticipating the corporation's current and future needs.
While PBGC's human capital office has conducted some workforce
analysis, it has not taken steps to formally evaluate needed data that
could inform its workforce planning efforts. Our prior work has found
that collecting and analyzing workforce data are fundamental to
measuring the effectiveness of an organization's human capital
approaches in support of the mission and goals of an agency.[Footnote
24] To evaluate factors affecting attrition, agencies can compare their
attrition rates to those of other federal agencies, estimate the cost
of recruiting and training new employees who leave and the cost of
recruiting and training their replacements, and evaluate labor market
conditions in locations where it operates. While PBGC's human capital
office maintains data on the corporation's attrition rates, it does not
perform certain types of analysis to better understand its attrition.
As of March 2008, PBGC had not conducted any of these analyses.
Similarly, the corporation has done little since 2002 to identify and
analyze its workforce skills by gathering skills data on current
employees, critical skills that are needed throughout the agency, to
determine if and where gaps exists. Our prior work has noted that
maintaining current information on staff members' critical skills and
competencies is especially important for federal agencies operating in
an ever-changing environment. Shifts in national priorities, budget
constraints, and other factors affect the critical skills an agency
needs to fulfill its mission.[Footnote 25] For PBGC, such information
is particularly useful for determining and addressing gaps in the
critical workforce skills of staff and making efficient resource
allocations, because PBGC must respond quickly to changes in the
financial markets and defined benefit pension plan industry. However,
PBGC has only in recent months, and at the request of the newly hired
Chief Information Officer, taken steps to evaluate the critical skill
needs and gaps of one of its key occupations--Information Technology
Specialist. For the other key occupations, PBGC had not yet determined
or updated the skills inventory and competencies of its workforce, as
of March 2008. PBGC officials told us that they planned to develop a
process for identifying such skill needs by the end of fiscal year
2008.
Although PBGC Faces Possible Compensation Challenges, It Has Not Fully
Explored All Available Compensation Options:
PBGC has not fully explored all available compensation options under
its statutory authority, even though corporation officials stated that
PBGC's current compensation structure limits its ability to hire and
retain certain key staff. While data suggest that PBGC is generally
able to hire and retain most key staff, PBGC officials have expressed
the belief that the corporation is at a competitive disadvantage not
only with the private sector, but also with certain federal agencies
like FDIC and SEC that employ similar staff. As we noted, while PBGC
staff in key occupations have pay ranges and salaries similar to those
of the rest of the federal government, PBGC's pay ranges and average
salaries are lower than those of their counterparts at some similar
agencies. Moreover, data suggest that as of September 2007, PBGC's
highest pay for financial analysts, the key occupation that PBGC
appears to have the most difficulty hiring and retaining, was lower
than that of both the federal financial regulators and the rest of the
federal government. Yet, despite corporate concerns, PBGC has not taken
steps to fully explore all available compensation options with OPM and
the Office of Management and Budget (OMB).
Our prior work has found that the insufficient and ineffective use of
flexibilities can significantly hinder the ability of an agency to
recruit, hire, retain, and manage its workforce, and that the
effective, efficient, and transparent use of human capital
flexibilities must be a key component of agency efforts to address
human capital challenges.[Footnote 26] According to our Internal
Control Management and Evaluation Tool, an agency's compensation system
should be adequate to acquire, motivate, and retain personnel, and
incentives should be used to provide encouragement for personnel to
perform at their maximum capability. Further, to assist agencies, OPM
has developed a handbook describing currently available human capital
flexibilities.[Footnote 27]
In recent years, PBGC has made use of various human capital
flexibilities in which the corporation has discretionary authority to
provide direct compensation in certain circumstances to support its
recruitment and retention efforts. Our review of PBGC's use of the
compensation options recorded in CPDF found that PBGC had used options
such as recruitment and retention incentives, superior qualification
pay-setting authority, and special pay rates for specific occupations.
[Footnote 28] We also found that PBGC used performance management
incentives, such as awards (bonuses) for suggestions, superior
accomplishments, or special acts. (See app. V for a list of selected
compensation flexibilities and authorities.) However, some PBGC
officials stated that the corporation has not used these flexibilities
to their fullest potential. For example, some senior management
officials said the corporation should provide recruitment and retention
incentives to more employees. Our review of CPDF found that between
fiscal year 2004 and 2007, PBGC used recruitment incentives 14 times
and retention incentives 10 times.
Further, PBGC officials said that they had not recently explored
additional flexibilities that required the approval of OPM and OMB to
determine whether they would be applicable or appropriate for the
corporation. For example, as of March 2008, PBGC officials said that
they had not explored whether positions, such as its Chief Insurance
Program Officer, Chief Financial Officer, and Chief Investment Officer-
-positions that require specialized technical expertise specifically
related to defined benefit pension plan structure and finance--may fall
under OPM's criteria for critical position pay authority.[Footnote 29]
While most of these positions are currently filled, PBGC officials have
cited difficulty filling some of these more technical positions and
have expressed concern about filling them in the future as individuals
leave. In another example, PBGC had not explored whether it would be
appropriate or applicable to waive the recruitment and retention
incentive limitation of 25 percent based on a critical agency need.
In addition to not exploring all available compensation options, PBGC
has done little over the last decade to determine what effect its
compensation system and lower pay ranges may have on its recruitment
and retention efforts and the extent to which an alternative pay system
may be needed. In the early 1990s, PBGC evaluated its workforce and
conducted a compensation study comparing its compensation system with
those of federal financial regulators and the private sector. The study
concluded that some PBGC staff were relatively under compensated
compared to the private sector and those federal agencies classified
under FIRREA.[Footnote 30] On the basis of that evidence, PBGC sought
to establish a new compensation system (outside of the federal
government's General Schedule and merit pay systems), arguing that PBGC
could do so because the corporation did not pay compensation entirely
from appropriated funds. However, in response, the Solicitor of Labor
concluded that PBGC's compensation was in fact paid from appropriated
funds and that PBGC was not exempt from the General Schedule. As of
March 2008, DOL's Office of the Solicitor had not changed its
conclusions. In addition, GAO has long held the view that the revolving
funds of PBGC are appropriated funds.[Footnote 31]
According to PBGC officials, the corporation has not taken steps to
evaluate its compensation structure since the early 1990s, because of
the position taken by the Department of Labor. Officials told us that
it would not be cost-effective for the corporation to invest resources
in evaluating the corporation's compensation structure if no action
could be taken to modify the pay system, if needed. However, other
federal agencies also facing increased workload demands have in some
cases explored and obtained alternative pay systems--systems where
market rates and performance are central drivers of pay--after
establishing a need for additional compensation. For example, Congress
enacted FIRREA after the U.S. savings and loan crisis, and specifically
provided the federal financial regulators with the flexibility to
establish their own pay system.
Conclusions:
Although PBGC is a relatively small agency, it is faced with the
challenge of insuring retirement income for millions of Americans'
promised defined benefit pensions. Because of this, PBGC must have at
its disposal a highly qualified workforce with the skills necessary to
seek the best financial arrangements needed to support its mission.
While it appears that PBGC is generally able to hire and retain key
staff, the corporation has faced hiring and retaining difficulties in
certain technical positions, such as its financial analysts and chief
financial officer. In addition to these difficulties, the corporation
may face several workforce challenges in the near future if it does not
take steps now to strategically prepare itself by identifying its
current and future challenges. However, because PBGC does not
systematically collect and analyze all necessary workforce data, the
foundation on which to identify and address such challenges is limited.
In order to develop strategies for identifying and filling any
workforce gaps or spotlight areas in need of attention, PBGC management
must rely on valid workforce data. If it does not, the corporation's
ability to effectively target its resources or know which key areas to
focus on when recruiting, developing, and retaining top talent is
limited. While the costs of collecting such data may require some trade-
offs among PBGC's competing priorities, the costs of making decisions
without the necessary information could be even greater over time.
PBGC officials have suggested that the corporation's compensation
system places it at a competitive disadvantage not only with the
private sector, but also with other federal entities when competing for
some key staff. While such perceptions may be reasonable for certain
occupations, the fact that PBGC has not fully explored all compensation
options with OPM and OMB may hinder its ability to develop innovative
compensation packages within its current statutory authorities. If PBGC
were to fully exhaust all available options, PBGC executives, in
conjunction with the corporation's board of directors, could more
reasonably take steps to seek additional flexibilities, such as an
alternative compensation structure, if it seemed warranted. By doing
so, PBGC's ability to insure and deliver retirement benefits to the
millions of Americans that rely upon them could be strengthened.
Recommendations for Executive Action:
To improve PBGC's human capital management structure, we recommend that
PBGC's Director instruct PBGC's Chief Management Officer to:
* Integrate formal workforce and succession planning components as part
of the corporation's efforts in developing a formal strategic planning
approach to managing its workforce.
* Systematically collect and analyze workforce data and integrate the
results of such analyses into its workforce planning efforts. Such an
approach could include updating PBGC's 2002 Workforce Planning Report,
analyzing the reason for and the associated costs of its attrition, and
identifying the types of skills and competencies critical to PBGC's
mission.
* Fully explore with the Office of Personnel Management and Office of
Management and Budget all compensation options currently available to
determine and document what options are appropriate and applicable
within its statutory authority. Subsequently, the corporation should
make use of all applicable and appropriate options, and continuously
track, document, and monitor the use of such options. Once such steps
are taken, PBGC should determine the extent to which its ability to
hire and retain is hindered by its compensation structure. If such
efforts conclude that PBGC is in fact hindered, the corporation's board
of directors and Director should work to formulate recommendations to
Congress for modifying its structure.
Agency Comments and Our Evaluation:
We obtained written comments on a draft of this report from PBGC, which
are reproduced in appendix VI. In addition, we provided copies of the
draft report to the Departments of the Treasury, Labor, and Commerce as
well as OPM for their comments. In instances where comments were
provided, they were incorporated in the report where appropriate.
In response to our draft report, PBGC generally concurred with our
recommendations and outlined the actions the corporation has underway
or plans to take with regard to them. Specifically, PBGC stated that
the corporation would do more to better manage its workforce
particularly with regard to its human capital succession planning and
workforce data analysis. PBGC reiterated the steps that the corporation
is taking to strengthen its human capital management, and added that
these improvements were expected to address many of our concerns.
Further, PBGC stated that the corporation has taken steps in years past
to explore compensation options, but noted that legal and policy
considerations beyond the purview of PBGC's management have hindered
the corporation's ability to do so. Nevertheless, as we recommended,
PBGC stated that the corporation will continue to explore other
compensation options considered appropriate and maintain a dialogue
with OPM, OMB, and members of PBGC's board of directors regarding this
issue.
As agreed with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after its issue date. At that time, we will send copies of this report
to the director of PBGC; the Secretaries of the Treasury, Labor, and
Commerce; and other interested parties. We will also make copies
available to others on request. If you or your staff have any questions
concerning this report, please contact me on (202) 512-7215. Key
contributors are listed in appendix VII.
Signed by:
Barbara D. Bovbjerg:
Director, Education, Workforce, and Income Security Issues:
[End of section]
Appendix I: Scope and Methodology:
To determine the Pension Benefit Guaranty Corporation's (PBGC) recent
experience in hiring and retaining mission-critical staff, we worked
with PBGC executives and human capital officers to identify which staff
were considered critical to PBGC's mission. On the basis of these
discussions and in conjunction with a 2002 PBGC workforce planning team
report, it was agreed with PBGC officials that we would focus on seven
occupations that were considered key to the corporation's business
operation and also made up the majority of the corporation's workforce.
These occupations were:
1. accountants;
2. actuaries;
3. attorneys;
4. auditors;
5. financial analysts;
6. information technology specialists, and;
7. pension law specialists.
After identifying these key occupations, we assessed PBGC's recent
experience in hiring and retaining staff by using the Office of
Personnel Management's (OPM) Central Personnel Data File (CPDF) to
identify different workforce data, such as hiring, attrition,
separation types, retirement eligibility, federal tenure, and pay
averages for these positions. To identify trends in some of these data,
we analyzed hiring, attrition, and separation workforce data sets for
PBGC's key occupations from fiscal year 2000 to 2007 and compared
attrition and separation information with comparable information from
the rest of the federal government for the same period. We chose to
review this data from these fiscal years to determine what trends, if
any, existed prior to and after the significant workload increases and
financial liabilities resulting from several large companies
terminating their defined benefit pension plans around fiscal years
2003 and 2004.
To assess the reliability of OPM's CPDF, we reviewed GAO's prior data
reliability work on CPDF data.[Footnote 32] We supplemented that work
as necessary by analyzing employee movement using CPDF data when we
found exceptions from standard personnel procedures, such as employees
with a transfer-out code but with an accession code in the hiring
agency that did not include a transfer-in code. We also found duplicate
separation or accession records for the same individual on the same
day. However, these types of data limitations represented less than 1/
10th of 1 percent of the data used. As a result, we concluded that the
data were sufficiently reliable for the purposes of our review.
[Footnote 33] We also requested attrition and other workforce data from
PBGC's computerized system called the Federal Personnel and Payroll
System (FPPS) to determine the extent to which CPDF data matched FPPS
data. We reviewed related agency documentation, interviewed agency
officials knowledgeable about the data, and brought to the attention of
these officials any concerns or discrepancies we found with the data
for correction or updating.[Footnote 34] However, we did not
independently verify the workforce data we received from PBGC. In a
number of cases, we compared PBGC's CPDF data with data on other
federal executive branch agencies as a group that employ the seven key
occupations, or with financial regulators specifically.[Footnote 35]
The following describes the steps that we took to identify selected
workforce data in CPDF for the seven occupations.
Hiring:
We identified all new hires for fiscal years 2000 through 2007 by using
personnel action codes in CPDF for accessions to career or career
conditional positions. Accessions include new hires and hires of
individuals returning to the government. To put PBGC hiring into
context, we used attrition data (discussed below) to compare the
numbers of staff hired with the number of staff leaving. Additionally,
we used PBGC hiring data from 2007 to describe how quickly PBGC fills
its job vacancies and compared that data to OPM standards.
Attrition Rates:
To determine the overall attrition rates for staff in these key
positions, we analyzed data from the CPDF for fiscal years 2000 to
2007. For each fiscal year, we counted the number of permanent (career)
employees with personnel actions indicating they had separated from
PBGC. Separation (attrition) data for new hires included resignations,
retirements, terminations, and deaths. We did not include a small
percentage of individuals with inconsistent data such as multiple or
different hiring or separation dates. The small percentage of employees
with inconsistent data is congruent with the generally reliable data in
the CPDF we have reported previously. We then divided the total number
of separations for each fiscal year by the average of the number of
these employees in the CPDF as of the last pay period of the fiscal
year before the fiscal year of the separations and the number of these
employees in the CPDF as of the last pay period of the fiscal year of
separation.
To determine the attrition rates for new hires in the seven critical
occupations, we used CPDF data to identify the newly hired staff and
followed them over time to see how many left PBGC. We identified all
new hires for fiscal years 2000 through 2007 by using personnel action
codes for accessions to career or career conditional positions. Next,
we determined whether these individuals had personnel actions
indicating they had separated from PBGC. By subtracting the hire date
from the separation date, we determined how long individuals worked
before separating. We calculated the attrition rates for a specific
time period by dividing the number of individuals who left within that
time period by the total number of new hires tracked for that time
period.
Once we identified the overall attrition and new hire attrition rates,
we examined CPDF data to determine any patterns or trends for each of
the seven key occupations and for PBGC executives. Additionally, we
conducted a comparative analysis by calculating the attrition rates of
the rest of the federal government and the federal regulators to put
PBGC attrition rates into context.
Separations:
To identify the ways key staff separated from PBGC from 2000 through
2007, we reviewed CPDF data identifying employees who resigned from
federal employment, retired, transferred to another federal agency, or
were separated in another way, such as a reduction in force. As part of
this work, we built on our analysis of the CPDF to determine the extent
to which PBGC is losing staff to other federal agencies. To determine
those PBGC staff that moved to another federal agency, we identified
employees who had a CPDF separation code for a voluntary transfer and
who also had a CPDF accession code from a federal agency within 25 days
of the transfer out. We analyzed separation data to determine any
patterns for the receiving agency. To understand whether there were any
patterns within PBGC's key occupations, we reviewed CPDF data to
examine the distribution by type of separation for each of the key
occupations. To put PBGC's separation data into context, we compared
the types of separations for its key employees with the same
information for the rest of the federal executive branch agencies. To
identify the reasons that staff left PBGC, we reviewed available
reports with information about the reasons for attrition and
interviewed officials to determine the reasons why employees leave the
agency and how PBGC collects data on such departures.
Retirement Eligibility Rates:
To determine PBGC employee retirement eligibility for fiscal years 2012
and 2017, and after 2017, we used CPDF information on age at hire,
years of service, birth date, and retirement plan coverage. We compared
PBGC eligibility information to eligibility information for staff in
the seven key occupations in the rest of the federal government.
Federal Tenure Rates:
To determine federal tenure rates, we examined CPDF information on
number of years of federal service for key staff, at both PBGC and
other federal agencies. We compared PBGC tenure information to tenure
information for staff in the seven key occupations in the rest of the
federal government. We also compared CPDF federal tenure data to PBGC's
data for length of service at PBGC specifically.
Average Pay and Pay Ranges:
To report on the average pay and pay ranges for employees in selected
occupations and executives, we analyzed basic pay data from CPDF from
September 2007 for PBGC, financial regulators, and other federal
executive branch agencies that also had staff in the seven mission-
critical categories. Using CPDF, we determined the low, high, and mean
pay for each of these occupational categories and executives. We did
not separately analyze locality pay for these entities.
To identify the steps that PBGC had taken to strategically hire and
retain key staff, we reviewed previous GAO work on strategic human
capital management, PBGC's single-employer insurance programs, and the
corporation's management challenges. We also reviewed information on
PBGC's organizational objectives and succession planning goals from
documents such as annual reports and workforce or succession plans.
Moreover, we reviewed GAO and OPM reports on human capital to establish
criteria for PBGC's recruitment, retention, and succession planning
efforts. On the basis of the information we obtained, we assessed
PBGC's human capital strategic plan, performance measures, and policies
and procedures against GAO's Standards for Internal Controls in the
Federal Government to determine if internal control weaknesses or
inefficiencies existed. Weaknesses identified directed our review of
PBGC's human capital operations and were explored further in interviews
with PBGC officials.
We reviewed PBGC's efforts to analyze attrition, interviewed PBGC and
OPM officials, and relied on prior GAO reports on federal human capital
issues to determine how federal agencies develop and analyze data on
the reasons for this attrition.
We also reviewed:
* other selected agencies' performance management and pay systems,
including succession and strategic plans, guidance, and policies and
procedures on the systems;
* PBGC's internal assessments of its workforce challenges;
* OPM's 2006 Federal Human Capital Survey;
* recent OPM human capital operations audits; and:
* OPM's 2006 Recruitment, Relocation, and Retention study.
Further, we reviewed relevant provisions of federal law, including the
Employee Retirement Income Security Act of 1974; the Government
Corporation Control Act; the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989; and the Classification Act. As part of
this work, we collected and reviewed memorandums and documentation
related to PBGC's compensation proposal as well as correspondence from
the Department of Labor (DOL) and Office of Management and Budget
(OMB). We also obtained a legal opinion from DOL's Office of the
Solicitor confirming that DOL still held the view that PBGC is not
exempt from the General Schedule. Moreover, we collected documents and
interviewed officials at PBGC to determine the extent to which PBGC
governance and organizational structure have affected PBGC's ability to
pursue alternative compensation and benefit flexibilities. We also used
recent GAO work that reviewed compensation flexibilities at the
financial regulatory agencies.
To gather information on PBGC's use of human capital flexibilities
related to compensation, we used CPDF data to calculate the number of
occasions on which these flexibilities were administered between fiscal
year 2004 and 2007. Specifically, we identified the number of times
PBGC used recruitment incentives, individual and group cash awards,
individual and group time-off awards, individual and group suggestion/
invention awards, quality step increases, student loan repayments, and
retention incentives. In addition, we interviewed PBGC's human capital
officials to determine if PBGC was using certain compensation
flexibilities that we did not identify in CPDF. We did not assess
whether PBGC was using these flexibilities appropriately.
To address both objectives, we also interviewed board representatives,
the PBGC Director, PBGC's executives, senior PBGC management officials,
and officials from OPM and DOL. Additionally, we met with the
corporation's union representatives and PBGC's Inspector General, and
coordinated with OPM's human capital evaluators regarding their audit
of PBGC human capital policies and programs. At the time of our review,
OPM officials confirmed they were finalizing a PBGC Human Resource
Operations Evaluation. While OPM's review covered certain aspects of
strategic human capital management, OPM's review also focused on
specific human capital programs, such as competitive examining.
[Footnote 36] OPM officials stated they would be presenting findings
and working with PBGC on corrective measures to improve the
corporation's human capital program.
[End of section]
Appendix II: List of Federal Financial Regulators and their Mission:
Federal financial regulator: Commodity Futures Trading Commission;
Mission: Regulates commodity futures and option markets in the United
States.
Federal financial regulator: Farm Credit Administration;
Mission: Ensures a safe, sound, and dependable source of credit and
related services for agriculture and rural America.
Federal financial regulator: Federal Deposit Insurance Corporation;
Mission: Preserves and promotes public confidence in the U.S. financial
system by insuring deposits in banks and thrift institutions for at
least $100,000 per depositor; by identifying, monitoring, and
addressing risks to the deposit insurance funds; and by limiting the
effect on the economy and the financial system when a bank or thrift
institution fails.
Federal financial regulator: Federal Housing Finance Board;
Mission: Regulates the 12 Federal Home Loan Banks that were created in
1932 to improve the supply of funds to local lenders that, in turn,
finance loans for home mortgages.
Federal financial regulator: Federal Reserve Board;
Mission: Conducts the nation's monetary policy by influencing money and
credit conditions in the economy in pursuit of full employment and
stable prices; supervises and regulates banking institutions to ensure
the safety and soundness of the nation's banking and financial system
and to protect the credit rights of consumers; maintains the stability
of the financial system and containing systemic risk that may arise in
financial markets; provides certain financial services to the U.S.
government, to the public, to financial institutions, and to foreign
official institutions, including playing a major role in operating the
nation's payments systems.
Federal financial regulator: National Credit Union Administration;
Mission: Charters and supervises federal credit unions. National Credit
Union Administration, backed by the full faith and credit of the U.S.
government, operates the National Credit Union Share Insurance Fund
(NCUSIF) insuring the savings of 80 million account holders in all
federal credit unions and many state-chartered credit unions.
Federal financial regulator: Office of the Comptroller of the Currency;
Mission: Charters, regulates, and supervises all national banks. It
also supervises the federal branches and agencies of foreign banks.
Federal financial regulator: Office of Federal Housing Enterprise
Oversight;
Mission: Promotes housing and a strong national housing finance system
by ensuring the safety and soundness of Fannie Mae (Federal National
Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage
Corporation)--the largest housing finance institutions in the United
States.
Federal financial regulator: Office of Thrift Supervision;
Mission: Primary federal regulator of federally chartered and state-
chartered savings associations, their subsidiaries, and their
registered savings and loan holding companies.
Federal financial regulator: Securities and Exchange Commission;
Mission: Administers federal securities law in the United States. The
agency is charged with protecting investors, maintaining fair, orderly,
and efficient markets, and facilitating capital formation.
Source: GAO analysis.
[End of table]
[End of section]
Appendix III: Elements of Strategic Human Capital Management:
People are an agency's most important organizational asset. An
organization's people define its character, affect its capacity to
perform, and represent the knowledge base of the organization. As such,
effective strategic human capital management approaches serve as the
cornerstone of any serious change management initiative. They must also
be at the center of efforts to transform the cultures of federal
agencies so that they become less hierarchical, process-oriented,
stovepiped, and inwardly focused; and flatter and more results-
oriented, integrated, and externally focused.
Studies by several organizations, including GAO, have shown that
successful organizations in both the public and private sectors use
strategic management approaches to prepare their workforces to meet
present and future mission requirements. For example, preparing a
strategic human capital plan encourages agency managers and
stakeholders to systematically consider what is to be done, how it will
be done, and how to gauge progress and results. Federal agencies have
used varying frameworks for developing and presenting their strategic
human capital plans. Various agencies are using OPM's Human Capital
Assessment and Accountability Framework (HCAAF) as the basis for
preparing such plans. HCAAF, which the Office of Personnel Management
developed in conjunction with the Office of Management and Budget and
us, outlines six standards for success, key questions to consider, and
suggested performance indicators for measuring progress and results.
These six standards for success and related definitions are as follows:
Strategic alignment: The organization's human capital strategy is
aligned with mission, goals, and organizational objectives and
integrated into its strategic plans, performance plans, and budgets.
Workforce planning and deployment: The organization is strategically
utilizing staff in order to achieve mission goals in the most efficient
ways.
Leadership and knowledge management: The organization's leaders and
managers effectively manage people, ensure continuity of leadership,
and sustain a learning environment that drives continuous improvement
in performance.
Results-oriented performance culture: The organization has a diverse,
results-oriented, high-performance workforce, and a performance
management system that effectively differentiates between high and low
performance and links individual, team, or unit performance to
organizational goals and desired results.
Talent management: The organization makes progress toward closing gaps
or making up deficiencies in most mission-critical skills, knowledge,
and competencies.
Accountability: The organization's human capital decisions are guided
by a data-driven, results-oriented planning and accountability system.
As we have reported, strategic workforce planning, an integral part of
human capital management and the strategic workforce plan, involves
systematic assessments of current and future human capital needs and
the development of long-term strategies to fill the gaps between an
agency's current and future workforce requirements.[Footnote 37] Agency
approaches to such planning can vary with each agency's particular
needs and mission; however, our previous work suggests that
irrespective of the context in which workforce planning is done, such a
process should incorporate five key principles: (1) involve management
and employees, (2) analyze workforce gaps, (3) employ workforce
strategies to fill the gaps, (4) build the capabilities needed to
support workforce strategies, and (5) evaluate and revise strategies
(see fig. 8).
Figure 8: Strategic Workforce Planning Process:
[See PDF for image]
This figure is an illustration of the strategic workforce planning
process and contains the following information:
Set strategic direction:
Involvement of management and employees in the following:
* Workforce gap analysis;
* Workforce strategies to fill the gaps;
* Evaluation of and revisions to strategies.
Build capacities to support workforce strategies.
Source: GAO.
[End of figure]
Our human capital model highlights the kinds of thinking that agencies
should apply, as well as some of the steps they can take, to make
progress in managing human capital strategically.[Footnote 38] The
model consists, in part, of the Critical Success Factors Table. This
table identifies eight critical success factors for managing human
capital strategically, which embody an approach to human capital
management that is fact-based, focused on strategic results, and
incorporates merit principles and other national goals. These factors
are organized in pairs to correspond with the four governmentwide high-
risk human capital challenges that our work has shown are undermining
agency effectiveness (see fig. 9). When considering the human capital
cornerstones and the critical success factors, it is important to
remember that they are interrelated and mutually reinforcing. Any
pairing or ordering of human capital issues may have a sound rationale
behind it, but no arrangement should imply that human capital issues
can be compartmentalized and dealt with in isolation from one another.
Figure 9: Human Capital Cornerstones and Success Factors:
[See PDF for image]
This figure is an illustration of Human Capital Cornerstones and
Success Factors, and contains the following information:
Human Capital Cornerstone: Leadership;
Critical Success factors:
* Commitment to human capital management;
* Role of the human capital function.
Human Capital Cornerstone: Strategic human capital planning;
Critical Success factors:
* Integration and alignment;
* Data-driven human capital decisions.
Human Capital Cornerstone: Acquiring, developing, and retaining talent;
Critical Success factors:
* Targeted investments in people;
* Human capital approaches tailored to meet organizational needs.
Human Capital Cornerstone: Results-oriented organizational culture;
Critical Success factors:
* Empowerment and inclusiveness;
* Unit and individual performance linked to organizational goals.
Source: GAO.
[End of figure]
All of the critical success factors reflect two principles that are
central to the human capital idea:
People are assets whose value can be enhanced through investment. As
with any investment, the goal is to maximize value while managing risk.
An organization's human capital approaches should be designed,
implemented, and assessed by the standard of how well they help the
organization achieve results and pursue its mission.
In developing this model, we built upon GAO's Human Capital: A Self-
Assessment Checklist for Agency Leaders (GAO/OCG-00-14G, September
2000). Self-assessment is the starting point for creating "human
capital organizations"--agencies that focus on valuing employees and
aligning their "people policies" to support organizational performance
goals. Certain unifying considerations should be kept in mind:
All aspects of human capital are interrelated: The principles of
effectively managing people are inseparable and must be treated as a
whole. Any sorting of human capital issues may have a sound rationale
behind it, but no sorting should imply that human capital issues can be
compartmentalized and dealt with in isolation from one another.
Trust requires transparency: To pursue its shared vision effectively,
the agency must earn the trust of its workforce by involving employees
in the strategic planning process and by ensuring that the process is
transparent--that is, consistently making it clear that the shared
vision is the basis for the agency's actions and decisions.
Merit principles and other national goals still apply: Performance-
based management does not supersede the merit principles or other
national goals, such as veterans' preference. A modern merit system
will achieve a reasonable balance among taxpayer demands, employer
needs, and employee interests.
Constraints and flexibilities need to be understood: The purpose of
human capital self-assessment is to help agencies target areas in which
to make changes in support of their organizational missions and other
needs. Agencies that identify areas for improvement need to learn what
constraints exist that apply to them and what flexibilities are
available.
Fact-based human capital management requires data: Federal agencies
typically do not have the data required to effectively assess how well
their human capital approaches support results. A more fact-based
approach to human capital management will entail the development and
use of data that demonstrate the effectiveness of human capital
policies and practices--thereby improving managers' ability to maximize
the value of human capital investments while managing the related
risks.
The use of best practices requires prudent decision making: Identifying
best practices and benchmarking against leading organizations are both
potentially useful and important pursuits. Federal agencies must be
careful to recognize the unique characteristics and circumstances that
make organizations different from one another and to consider the
applicability of practices that have worked elsewhere. For example, the
environments in which public and private sector organizations operate
differ significantly; our work has shown that many management
principles identified in the private sector are applicable to the
federal sector, but these differences need to be taken into account
when agencies consider alternatives to their current management
approaches.
Attention to human capital must be ongoing: To be effective, strategic
human capital management requires the sustained commitment and
attention of senior leaders and managers at all levels of the agency.
Managing the workforce is not a problem for which the organization can
supply an answer and then move on. Rather, managers must continually
monitor and refine their agencies' human capital approaches to ensure
their ongoing effectiveness and continuous improvement.
[End of section]
Appendix IV Minimum and Maximum Pay Ranges and Average Basic Pay for
Critical Occupations by Selected Federal Agency:
[See PDF for image]
This figure is a chart of pay ranges as follows:
Occupation: Accountant;
PBGC: Base salary minimum: $46,974;
PBGC: Base salary maximum: $120,981;
PBGC: Average basic pay: $72,130;
FIRREA-CFTC: Base salary minimum: $95,782;
FIRREA-CFTC: Base salary maximum: $134,434;
FIRREA-CFTC: Average basic pay: $113,760;
FCA: Base salary minimum: $99,678;
FCA: Base salary maximum: $128,161;
FCA: Average basic pay: $118,772;
FDIC: Base salary minimum: $71,371;
FDIC: Base salary maximum: $131,026;
FDIC: Average basic pay: $104,225;
FHFB: Base salary minimum: $113,313;
FHFB: Base salary maximum: $129,579;
FHFB: Average basic pay: $121,446;
NCUA: Base salary minimum: $67,739;
NCUA: Base salary maximum: $112,918;
NCUA: Average basic pay: $93,744;
OCC: Base salary minimum: $46,110;
OCC: Base salary maximum: $160,673;
OCC: Average basic pay: $104,538;
OFHEO: Base salary minimum: $66,828;
OFHEO: Base salary maximum: $169,000;
OFHEO: Average basic pay: $121,317;
OTS: Base salary minimum: $79,000;
OTS: Base salary maximum: $175,795;
OTS: Average basic pay: $126,637;
SEC: Base salary minimum: $48,855;
SEC: Base salary maximum: $156,331;
SEC: Average basic pay: $116,183;
Other federal agencies: Base salary minimum: $25,623;
Other federal agencies: Base salary maximum: $145,400;
Other federal agencies: Average basic pay: $68,951.
Occupation:
PBGC: Base salary minimum:
PBGC: Base salary maximum:
PBGC: Average basic pay:
FIRREA-CFTC: Base salary minimum:
FIRREA-CFTC: Base salary maximum:
FIRREA-CFTC: Average basic pay:
FCA: Base salary minimum:
FCA: Base salary maximum:
FCA: Average basic pay:
FDIC: Base salary minimum:
FDIC: Base salary maximum:
FDIC: Average basic pay:
FHFB: Base salary minimum:
FHFB: Base salary maximum:
FHFB: Average basic pay:
NCUA: Base salary minimum:
NCUA: Base salary maximum:
NCUA: Average basic pay:
OCC: Base salary minimum:
OCC: Base salary maximum:
OCC: Average basic pay:
OFHEO: Base salary minimum:
OFHEO: Base salary maximum:
OFHEO: Average basic pay:
OTS: Base salary minimum:
OTS: Base salary maximum:
OTS: Average basic pay:
SEC: Base salary minimum:
SEC: Base salary maximum:
SEC: Average basic pay:
Other federal agencies: Base salary minimum:
Other federal agencies: Base salary maximum:
Other federal agencies: Average basic pay:
Occupation: Actuary;
PBGC: Base salary minimum: $25,623;
PBGC: Base salary maximum: $120,981;
PBGC: Average basic pay: $72,131;
CPDF did not indicate that CFTC, FCA, FDIC, FHFB, NCUA, OCC, OFHEO,
OTS, and SEC employed actuaries as of September 2007;
Other federal agencies: Base salary minimum: $31,740;
Other federal agencies: Base salary maximum: $168,000;
Other federal agencies: Average basic pay: $91,048.
Occupation: Attorney;
PBGC: Base salary minimum: $71,415;
PBGC: Base salary maximum: $120,981;
PBGC: Average basic pay: $99,724;
FIRREA-CFTC: Base salary minimum: $87,647;
FIRREA-CFTC: Base salary maximum: $176,359;
FIRREA-CFTC: Average basic pay: $128,022;
FCA: Base salary minimum: $81,541;
FCA: Base salary maximum: $187,077;
FCA: Average basic pay: $132,851;
FDIC: Base salary minimum: $83,050;
FDIC: Base salary maximum: $169,660;
FDIC: Average basic pay: $140,121;
FHFB: Base salary minimum: $114,868;
FHFB: Base salary maximum: $133,437;
FHFB: Average basic pay: $128,297;
NCUA: Base salary minimum: $62,679;
NCUA: Base salary maximum: $229,187;
NCUA: Average basic pay: $128,016;
OCC: Base salary minimum: $73,540;
OCC: Base salary maximum: $231,000;
OCC: Average basic pay: $130,824;
OFHEO: Base salary minimum: $80,000;
OFHEO: Base salary maximum: $183,036;
OFHEO: Average basic pay: $139,565;
OTS: Base salary minimum: $109,856;
OTS: Base salary maximum: $185,198;
OTS: Average basic pay: $151,078;
SEC: Base salary minimum: $61,597;
SEC: Base salary maximum: $156,331;
SEC: Average basic pay: $127,566;
Other federal agencies: Base salary minimum: $38,824;
Other federal agencies: Base salary maximum: $201,365;
Other federal agencies: Average basic pay: $100,142.
Occupation: Auditor;
PBGC: Base salary minimum: $25,623;
PBGC: Base salary maximum: $108,573;
PBGC: Average basic pay: $67,929;
FIRREA-CFTC: Base salary minimum: $73,965;
FIRREA-CFTC: Base salary maximum: $135,820;
FIRREA-CFTC: Average basic pay: $101,369;
FCA: Base salary minimum: $105,932;
FCA: Base salary maximum: $187,077;
FCA: Average basic pay: $134,718;
FDIC: Base salary minimum: $56,526;
FDIC: Base salary maximum: $145,063;
FDIC: Average basic pay: $112,068;
FHFB: Base salary minimum: $75,346;
FHFB: Base salary maximum: $110,654;
FHFB: Average basic pay: $93,000;
NCUA: Base salary minimum: $108,658;
NCUA: Base salary maximum: $225,000;
NCUA: Average basic pay: $152,865;
CPDF did not indicate that OCC, OFHEO, and OTS employed auditors as of
September 2007;
SEC: Base salary minimum: $84,628;
SEC: Base salary maximum: $100,802;
SEC: Average basic pay: $92,597;
Other federal agencies: Base salary minimum: $25,623;
Other federal agencies: Base salary maximum: $164,467;
Other federal agencies: Average basic pay: $69,844.
Occupation: Executive;
PBGC: Base salary minimum: $111,676;
PBGC: Base salary maximum: $145,400;
PBGC: Average basic pay: $132,456;
We were not able to identify executives in CFTC and FCA with CPDF
data[D];
FDIC: Base salary minimum: $134,520;
FDIC: Base salary maximum: $240,000;
FDIC: Average basic pay: $176,377;
FHFB: Base salary minimum: $125,602;
FHFB: Base salary maximum: $214,685;
FHFB: Average basic pay: $158,454;
We were not able to identify executives in NCUA with CPDF data;
OCC: Base salary minimum: $159,785;
OCC: Base salary maximum: $222,500;
OCC: Average basic pay: $201,702;
OFHEO: Base salary minimum: $188,263;
OFHEO: Base salary maximum: $220,653;
OFHEO: Average basic pay: $205,319;
OTS: Base salary minimum: $152,427;
OTS: Base salary maximum: $249,165;
OTS: Average basic pay: $194,615;
SEC: Base salary minimum: $131,561;
SEC: Base salary maximum: $185,880;
SEC: Average basic pay: $167,706;
Other federal agencies: Base salary minimum: $75,446;
Other federal agencies: Base salary maximum: $215,700;
Other federal agencies: Average basic pay: $153,069.
Occupation: Financial analyst;
PBGC: Base salary minimum: $40,118;
PBGC: Base salary maximum: $111,675;
PBGC: Average basic pay: $80,712;
FIRREA-CFTC: Base salary minimum: $76,480;
FIRREA-CFTC: Base salary maximum: $78,732;
FIRREA-CFTC: Average basic pay: $77,606;
FCA: Base salary minimum: $60,950;
FCA: Base salary maximum: $134,881;
FCA: Average basic pay: $96,769;
FDIC: Base salary minimum: $52,004;
FDIC: Base salary maximum: $148,850;
FDIC: Average basic pay: $102,500;
FHFB: Base salary minimum: $48,807;
FHFB: Base salary maximum: $134,389;
FHFB: Average basic pay: $97,950;
NCUA: Base salary minimum: $54,810;
NCUA: Base salary maximum: $150,290;
NCUA: Average basic pay: $100,344;
OCC: Base salary minimum: $74,493;
OCC: Base salary maximum: $168,695;
OCC: Average basic pay: $112,268;
CPDF did not indicate that OFHEO employed financial analysts as of
September 2007;
OTS: Base salary minimum: $52,000;
OTS: Base salary maximum: $165,760;
OTS: Average basic pay: $117,669;
SEC: Base salary minimum: $61,597;
SEC: Base salary maximum: $156,331;
SEC: Average basic pay: $97,460;
Other federal agencies: Base salary minimum: $31,740;
Other federal agencies: Base salary maximum: $120,981;
Other federal agencies: Average basic pay: $71,979.
Occupation: Information technology specialist;
PBGC: Base salary minimum: $31,740;
PBGC: Base salary maximum: $120,981;
PBGC: Average basic pay: $89,501;
FIRREA-CFTC: Base salary minimum: $48,199;
FIRREA-CFTC: Base salary maximum: $151,601;
FIRREA-CFTC: Average basic pay: $106,780;
FCA: Base salary minimum: $48,000;
FCA: Base salary maximum: $177,781;
FCA: Average basic pay: $97,897;
FDIC: Base salary minimum: $64,185;
FDIC: Base salary maximum: $161,992;
FDIC: Average basic pay: $104,521;
FHFB: Base salary minimum: $114,868;
FHFB: Base salary maximum: $134,389;
FHFB: Average basic pay: $121,375;
NCUA: Base salary minimum: $57,325;
NCUA: Base salary maximum: $150,290;
NCUA: Average basic pay: $107,321;
OCC: Base salary minimum: $59,305;
OCC: Base salary maximum: $150,949;
OCC: Average basic pay: $102,857;
CPDF did not indicate that OFHEO employed IT specialists as of
September 2007;
OTS: Base salary minimum: $46,826;
OTS: Base salary maximum: $192,308;
OTS: Average basic pay: $113,228;
SEC: Base salary minimum: $54,022;
SEC: Base salary maximum: $151,841;
SEC: Average basic pay: $96,087;
Other federal agencies: Base salary minimum: $25,161;
Other federal agencies: Base salary maximum: $150,629;
Other federal agencies: Average basic pay: $71,294.
Occupation: Pension law specialist;
PBGC: Base salary minimum: $50,106;
PBGC: Base salary maximum: $82,575;
PBGC: Average basic pay: $64,943;
CPDF did not indicate that CFTC, FCA, FDIC, FHFB, NCUA, OCC, OFHEO,
OTS, and SEC employed pension law specialists as of September 2007;
Other federal agencies: Base salary minimum: $38,824;
Other federal agencies: Base salary maximum: $120,981;
Other federal agencies: Average basic pay: $88,510.
Source: GAO analysis of CPDF data.
Notes: The figure shows the minimum base salary and the maximum base
salary of an occupation for which CPDF data indicated that agencies had
staff as of September 2007. These reported base salaries do not include
locality pay or certain other pay, such as retention incentives or spot
awards. The figure does not show the minimum and maximum pay allowed by
statute. However, the maximum pay allowed under the General Schedule in
September 2007, for a GS-15, Step 10, in Washington, D.C., was $120,981
(not including locality pay). While the General Schedule is the federal
government's main pay system for white collar positions, some employees
in certain other federal agencies, including the federal financial
regulatory agencies, are not in the General Schedule system and have
different possible salary ranges (see GAO-07-678).
Executives include political appointees above GS-15, such as those in
the Senior Executive Service, those in the Senior Level and Senior
Scientific or Professional pay plans, and equivalent officials.
Different executive pay plans have different pay ceilings. For example,
the Senior Level and Senior Scientific and Professional pay plans (SL
and ST) have lower ceilings than the Senior Executive Service pay plan.
PBGC executives included the Director of PBGC and those in the Senior
Level pay plan. The maximum base pay allowed for SES in 2007 was the
rate for level II of the Executive Schedule ($168,000) for agencies
with a certified performance appraisal system, or the rate for level
III of the Executive Schedule ($154,600) for agencies without a
certified performance appraisal system. The maximum base pay allowed
for SL/ST employees in 2007 was $145,400 (the rate for level IV of the
Executive Schedule). However, SL/ST employees working in the 48
contiguous States also received locality payments ranging from
12.6percent to 30.3 percent in 2007, depending on location, with
locality rates capped at the rate for level III of the Executive
Schedule, or $154,600.
We submitted the relevant PBGC data to PBGC officials, who concurred
with the basic ranges and averages for PBGC.
While CFTC, FCA, and NCUA senior management could be classified as
executives, each agency has a pay plan that, as of this writing, did
not allow GAO to specifically identify executives' salaries through
CPDF.
The agencies in the table include the Commodity Futures Trading
Commission (CFTC), Farm Credit Administration (FCA), Federal Deposit
Insurance Corporation (FDIC), Federal Housing Finance Board (FHFB),
National Credit Union Administration (NCUA), Office of the Comptroller
of the Currency (OCC), Office of Federal Housing Enterprise Oversight
(OFHEO), Office of Thrift Supervision (OTS), Pension Benefit Guaranty
Corporation (PBGC), Securities and Exchange Commission (SEC), and the
Federal Reserve Board (FRB).
[End of figure]
[End of section]
Appendix V: Selected Compensation Flexibilities and Authorities
Available in the Federal Government:
Flexibilities addressing recruitment of new employees:
Recruitment incentive: A monetary payment to a newly hired employee
when the agency has determined that the position is likely to be
difficult to fill in the absence of such an incentive. The employee
must sign an agreement to complete a specified period of service with
the agency (not to exceed 4 years).
Recruitment and relocation incentives in excess of 25 percent: Upon the
request of the head of an agency, OPM may waive the recruitment or
relocation incentive 25 percent limitation based on a critical agency
need. Under such an approval, the total amount of recruitment or
relocation incentive payments may not exceed 50 percent of an
employee's annual rate of basic pay at the beginning of the service
period multiplied by the number of years in the service period.
Superior qualifications and special needs pay-setting authority and
special qualifications appointments: Agencies may set the rate of basic
pay of a newly appointed employee at a rate above the minimum rate of
the appropriate General Schedule grade because (1) the candidate has
superior qualifications or (2) the agency has a special need for the
candidate's services.
Flexibilities addressing the retention of employees:
Quality step increase: A step increase to reward General Schedule
employees at all grade levels who display high-quality performance. It
is a step increase that is given sooner than the normal time interval
for step increases.
Individual and group cash award: A monetary award to recognize superior
employee and group performance (also known as spot awards).
Individual and group suggestion/Invention award: A monetary award for
suggestions, inventions, or a productivity gain.
Individual and group time-off award: An award of time off to recognize
superior employee and group performance.
Referral incentive: A monetary award to recognize employees who bring
new talent into the agency.
Retention incentive: A monetary payment given to a current employee
when the agency determines that the unusually high or unique
qualifications of the employee or a special need of the agency for the
employee's services makes it essential to retain the employee and if
the employee would be likely to leave the federal service in the
absence of a retention incentive.
Retention incentive in excess of 25 percent for individuals and 10
percent for groups of employees: At the request of an agency head, OPM
may waive the retention incentive limitation of 25 percent of basic pay
for individual employees or 10 percent for a group or category of
employees (but not to exceed 50 percent of basic pay) based on a
critical agency need. The agency must determine the unusually high or
unique qualifications of the employee(s) are critical to the successful
accomplishment of an important agency mission, project, or initiative
(e.g., programs or projects related to a national emergency or
implementing a new law or critical management initiative).
Flexibilities addressing the recruitment of new employees and/or
retention of employees:
Student loan repayment: The federal student loan repayment program
permits agencies to repay federally insured student loans as a
recruitment or retention incentive for candidates or current employees
of the agency.
Relocation incentive: A monetary payment to an employee who must
relocate to a position in a different geographic area that is likely to
be difficult to fill in the absence of such an incentive. In return,
the employee must sign an agreement to fulfill a period of service of
not more than 4 years with the agency.
Critical Position Pay Authority: OPM may, upon the request of an agency
head, and after consultation with OMB, grant authority to fix the rate
of basic pay for one or more critical positions in an agency at not
less than the rate that would otherwise be payable for that position,
up to the rate for level I of the Executive Schedule under the critical
pay authority. A higher rate of pay may be established upon the
President's written approval.
Source: U.S. Office of Personnel Management, Human Resources
Flexibilities and Authorities in the Federal Government, (Washington,
D.C.: January 2008).
[End of table]
[End of section]
Appendix VI: Comments from the Pension Benefit Guaranty Corporation:
PBGC:
Pension Benefit Guaranty Corporation:
Office of the Director:
Protecting America's Pensions:
1200 K Street, N.W.
Washington, D.C. 20005-4026:
May 27, 2008:
Barbara D. Bovbjerg, Director:
Education, Workforce, and Income Security Issues:
U.S. Government Accountability Office:
Washington, D.C. 20548:
Dear Ms. Bovbjerg:
Thank you for the opportunity to comment on the draft version of your
report entitled, "Pension Benefit Guaranty Corporation--A More
Strategic Approach Could Improve Human Capital Management" (GAO-08-
624). GAO's efforts in performing this important work are certainly
appreciated.
PBGC guarantees the basic pension benefits covering 44 million
individuals in more than 30,000 private-sector defined benefit plans.
PBGC manages more than $55 billion in assets. This makes PBGC one of
the largest institutional investors in the country. Continuing to
recruit and retain employees with the specialized skills and training
needed to accomplish our mission is a critical challenge, especially as
nearly a quarter of our workforce may retire in the next four years. We
are committed to continuing to work to ensure that PBGC's employees are
able to meet the challenges facing America's pension insurance
programs.
As your report acknowledges, PBGC's compensation structure is not
competitive with certain other federal agencies that employ similar
staff, including the Federal Deposit Insurance Corporation, Office of
Federal Housing Enterprise Oversight, and the Securities and Exchange
Commission. It also recognizes that PBGC has experienced difficulties
in hiring senior financial analysts and retaining personnel in key
executive positions. In fact, data reviewed by your staff showed that
"PBGC highest pay for financial analysts...was lower than both the
federal financial regulators and the rest of the federal government."
Not only does PBGC face competition from other agencies, private sector
firms value the specialized experience and training that PBGC provides
its employees. For example, employees that possess experience in
reviewing corporate and plan transactions, monitoring investment
policies and returns, and negotiating in complex bankruptcies, are
highly marketable to the private sector. Moreover, statistics showing
recruitment and retention rates cannot fully capture the impact of
employee turnover. Specifically, turnover causes PBGC to lose its
investment in training and development of junior employees (hired in
lieu of more experienced employees its pay scale cannot attract) when
they become marketable and go to higher paying organizations. Viewed in
tandem with the anticipated retirement surge, these facts highlight the
need for PBGC to have a full set of tools to attract and retain
qualified staff.
Your report indicates that PBGC has not fully explored compensation
options available under existing law, yet the actual data cited in your
report show that PBGC has implemented most of the recruitment and
retention flexibilities available to it. For instance, PBGC has
instituted programs that provide recruitment bonuses, retention
allowances, superior qualifications pay setting authority, repayment of
student loans, and telecommuting and other flexible work schedules to
eligible employees. Even with all of this, the statutory limitations
prevent PBGC from hiring the best qualified people to fill specific
positions. PBGC has, over its history, explored the possibility of
making structural changes to its existing compensation structure,
including the possible application of the SES pay structure and use of
alternative pay authorities. However, legal and policy considerations
beyond the purview of the PBGC's management have hindered our ability
to do so. Nevertheless, as recommended, we will continue to explore
other compensation options considered appropriate for implementation at
PBGC, and continue to have a dialogue with OPM, OMB, and members of our
Board of Directors on this important issue. As your report notes, we
may eventually need to seek a legislative solution, as other agencies
overseeing the financial sector have done. As stewards of $55 billion-
plus in investment assets, with the responsibility of negotiating with
some of the most sophisticated financial talent in the private sector,
PBGC needs additional flexibilities in order to be competitive.
Your report also highlights that PBGC can do more to better manage its
investment in its workforce, particularly with regard to human capital
and succession planning and workforce data analysis, and we agree. PBGC
took action last year in hiring a new Director of the Human Resources
Department. Under the new Director, we have completely reorganized that
office, including process improvements in employee development,
performance accountability, and service delivery. Furthermore, PBGC is
fully engaged in developing its strategic human capital plan, designed
to integrate formal workforce and succession planning components and
take advantage of improved collection and analysis of workforce data.
We expect to submit this plan to OPM and OMB by the end of Fiscal Year
2008, and expect that this plan and supporting activities will address
the report's other recommendations.
Your efforts and those of your staff in preparing this important report
are valued. Again, thank you for the opportunity to comment.
Sincerely,
Signed by:
Charles E. F. Millard:
[End of figure]
[End of section]
Appendix VII: Contacts and Acknowledgments:
GAO Contact:
Barbara Bovbjerg, (202) 512-7215:
Acknowledgments:
The following team members made key contributions to this report: David
Lehrer, Assistant Director; Jason Holsclaw, Analyst-in-Charge; Susannah
Compton; Monika Gomez; Catherine Hurley; Anar Ladhani; Armetha Liles;
Andrew Nelson; Mimi Nguyen; Jessica Orr; Roger Thomas; Rebecca Shea;
and Gregory Wilmoth.
[End of section]
Related GAO Products:
Pension Benefit Guaranty Corporation:
Pension Benefit Guaranty Corporation: Governance Structure Needs
Improvements to Ensure Policy Direction and Oversight. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-808]. Washington, D.C.: July
2007.
PBGC's Legal Support: Improvements Needed to Eliminate Confusion and
Ensure Provision of Consistent Advice. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-757R]. Washington, D.C.: May
18, 2007.
High Risk Series: An Update. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-07-310]. Washington, D.C.: January 2007.
Private Pensions: The Pension Benefit Guaranty Corporation and Long-
Term Budgetary Challenges. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-05-772T]. Washington, D.C.: June 9, 2005.
Pension Benefit Guaranty Corporation: Single-Employer Pension Insurance
Program Faces Significant Long Term Risks. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-04-90]. Washington, D.C.: October
2003.
Pension Benefit Guaranty Corporation: Contracting Management Needs
Improvement. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/HEHS-00-
130]. Washington, D.C.: September 2000.
Strategic Workforce Planning and Human Capital Management:
Federal Deposit Insurance Corporation: Human Capital and Risk
Assessment Programs Appear Sound, but Evaluations of Their
Effectiveness Should Be Improved. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-07-255]. Washington, D.C.: February 2007.
The Federal Workforce: Additional Insights Could Enhance Agency Efforts
Related to Hispanic Representation. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-06-832]. Washington, D.C.: August 2006.
Securities and Exchange Commission: Some Progress Made on Strategic
Human Capital Management. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-06-86]. Washington, D.C.: January 2006.
International Trade: USTR Would Benefit from Greater Use of Strategic
Human Capital Management Principles. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-06-167]. Washington, D.C.: December 2005.
Department of Homeland Security: Strategic Management of Training
Important for Successful Transformation. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-05-888]. Washington, D.C.:
September 2005.
Human Capital: Selected Agencies Have Opportunities to Enhance Existing
Succession Planning and Management Efforts. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-05-585]. Washington, D.C.: June
2005.
Human Capital: Agencies Need Leadership and the Supporting
Infrastructure to Take Advantage of New Flexibilities. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-05-616T]. Washington, D.C.: April
21, 2005.
Human Capital: Selected Agencies' Statutory Authorities Could Offer
Options in Developing a Framework for Governmentwide Reform.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-398R]. Washington,
D.C.: April 21, 2005.
National Nuclear Security Administration: Contractors' Strategies to
Recruit and Retain a Critically Skilled Workforce Are Generally
Effective. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-164].
Washington, D.C.: February 2005.
Diversity Management: Expert-Identified Leading Practices and Agency
Examples. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-90].
(Washington, D.C.: January 2005).
Human Capital: Principles, Criteria, and Processes for Governmentwide
Federal Human Capital Reform. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-05-69SP]. Washington, D.C.: December 2004.
Human Capital: Increasing Agencies' Use of New Hiring Flexibilities.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-959T]. Washington,
D.C.: July 13, 2004.
Human Capital: Key Practices to Increasing Federal Telework.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-950T]. Washington,
D.C.: July 8, 2004.
Human Capital: Status of Efforts to Improve Federal Hiring. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-04-796T]. Washington, D.C.: June
7, 2004.
Human Capital: A Guide for Assessing Strategic Training and Development
Efforts in the Federal Government. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-04-546G]. Washington, D.C.: March 2004.
Human Capital: Selected Agencies' Experiences and Lessons Learned in
Designing Training and Development Programs. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-04-291]. Washington, D.C.:
January 30, 2004.
Human Capital: Key Principles for Effective Strategic Workforce
Planning. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-39].
Washington, D.C.: December 2003.
Human Capital: Succession Planning and Management Is Critical Driver of
Organizational Transformation. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-04-127T]. Washington, D.C.: October 1, 2003.
Human Capital: A Guide for Assessing Strategic Training and Development
Efforts in the Federal Government (Exposure Draft). [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-03-893G]. Washington, D.C.: July
2003.
Human Capital: Opportunities to Improve Executive Agencies' Hiring
Processes. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-450].
Washington, D.C.: May 2003.
Human Capital: OPM Can Better Assist Agencies in Using Personnel
Flexibilities. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-
428]. Washington, D.C.: May 2003.
Human Capital: Effective Use of Flexibilities Can Assist Agencies in
Managing Their Workforces. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-03-2]. Washington, D.C.: December 2002.
A Model of Strategic Human Capital Management. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-02-373SP]. Washington, D.C.:
March 2002.
[End of section]
Footnotes:
[1] GAO, High Risk Series: An Update, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-310] (Washington, D.C.:
January 2007).
[2] For purposes of this report, the "rest of the federal government"
refers to all federal government executive branch agencies included in
the CPDF, except for PBGC and unless otherwise noted.
[3] OPM delegates competitive examining authority to federal agencies
to fill competitive civil service jobs with applicants from outside the
federal workforce and with federal employees that do and do not have
competitive service status. OPM can suspend or revoke an agency's
certification of an agency's delegated examining office at any time,
with or without advance notice. For more information on OPM's
competitive examining process, see OPM, Delegated Examining Operations
Handbook: A Guide for Federal Agency Examining Offices (Washington,
D.C.: May 2007).
[4] A defined benefit plan is a pension plan where the plan sponsor
provides a benefit generally expressed as a monthly benefit based on a
formula that generally combines salary and years of service to the
company. Defined benefit plans usually express benefits as an annuity,
but may offer departing participants the opportunity to receive lump
sum distributions.
[5] PBGC administers two programs: the single-employer and
multiemployer insurance programs. A single-employer plan is established
and maintained by only one employer. Single-employer plans can be
established unilaterally by the sponsor or through a collective
bargaining agreement with a labor union. 29 U.S.C. § 1002 (41). A
multiemployer plan is a collectively bargained arrangement between a
labor union and a group of employers in a particular trade or industry.
Management and labor representatives must jointly govern multiemployer
plans. 29 U.S.C. § 1002 (37).
[6] The General Schedule is a schedule of annual rates of basic pay,
consisting of 15 grades, designated GS-1 through GS-15, consecutively,
with 10 rates of pay for each such grade. The rates of pay of the
General Schedule are adjusted in accordance with 5 U.S.C. § 5303. PBGC
also has the authority to appoint and fix the compensation of experts
and consultants in accordance with the provisions of 5 U.S.C. § 3109.
See ERISA, § 4002(b)(6).
[7] FIRREA provides FDIC, OCC, NCUA, Federal Housing Finance Board Farm
Credit Administration, and the Office of Thrift Supervision with the
flexibility to establish their own compensation programs outside the
various statutory provisions on classification and pay for executive
branch agencies, and requires these agencies to seek to maintain
comparability with each other regarding compensation and benefits. Pub.
L. No. 101-73, § 1206 (1989). The Federal Housing Enterprises Financial
Safety and Soundness Act of 1992, § 1315, requires Office of Federal
Housing Enterprise Oversight to maintain comparability with the
compensation of employees of certain financial regulators. Pub. L. No.
102-550 (1992). The Investor and Capital Markets Fee Relief Act, §
8(a), Pub. L. No. 107-123, 115 Stat. 2390 (2002) and the Farm Security
and Rural Investment Act of 2002, § 10702(a), Pub. L. No. 107-171, 116
Stat. 516 (2002), placed SEC and the Commodity Futures Trading
Commission, respectively, under comparability requirements.
[8] GAO, Financial Regulators: Agencies Have Implemented Key
Performance Management Practices, but Opportunities for Improvement
Exists. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-678]
(Washington, D.C.: June 2007).
[9] GAO, Human Capital: A Self-Assessment Checklist for Agency Leaders,
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/OCG-00-14G]
(Washington, D.C.: September 2000).
[10] GAO, Human Capital: Key Principles for Effective Strategic
Workforce Planning, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-
04-39] (Washington, D.C.: December 2003).
[11] The Government Performance and Results Act of 1993 was intended to
improve the effectiveness and the efficiency of federal programs by
establishing a system to set performance goals and measure results.
[12] Fiscal year 2007 is the first year that PBGC had complete hiring
model data available.
[13] To determine whether PBGC's seven key occupations met the OPM 45-
day hiring model standards, we requested additional information from
PBGC to isolate the 45-day hiring model data for these positions.
However, after several requests, PBGC did not provide us with that
data.
[14] For purposes of this report, "attrition rate" is defined as the
number of separations of permanent employees divided by the average
number of permanent employees for an agency or a specific subgroup (see
app. I).
[15] Years of federal experience show total federal government
experience and not whether that experience is related to an employee's
current job.
[16] According to GAO's internal control and management tool, agencies
should have control activities, such as policies, procedures,
techniques, and mechanisms that help ensure that management's
directives to mitigate risk identified during the risk assessment
process are carried out. Common categories of control activities
include, in part, management of human capital. As part of human capital
management, agencies should consider having a coherent overall human
capital strategy that encompasses human capital policies, programs, and
practices to guide the agency. GAO, Internal Control Management and
Evaluation Tool, GAO-01-1008G (Washington, D.C.: Aug. 1, 2001).
[17] GAO, A Model of Strategic Human Capital Management. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-02-373SP] (Washington, D.C.: Mar.
15, 2002).
[18] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-39] and
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-02-373SP].
[19] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/HEHS-00-130]. In
our previous work on PBGC's contracting management, we recommended that
PBGC conduct a "comprehensive review" of its future human capital needs
and establish an executive steering committee to manage the process of
workforce planning from a macro perspective. The report further
recommended that the review include analysis of workforce size and
deployment across the corporation and of the knowledge, competencies,
and abilities required in conducting PBGC's business. Subsequently,
PBGC commissioned the National Academy of Public Administration to
conduct a workforce study, which resulted in a six-step Workforce
Planning Model conducive to PBGC's business culture.
[20] A gap analysis is used to identify the gaps between critical
skills--skills vital to the accomplishment of an agency's goals and
objectives--and competencies currently needed by an agency's workforce
and those that will be needed in the future.
[21] GAO, Human Capital: Succession Planning and Management Is Critical
Driver of Organizational Transformation, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-04-127T] (Washington, D.C.: Oct.
1, 2003).
[22] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-02-373SP].
[23] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-39].
[24] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-02-373SP].
[25] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-39].
[26] GAO, Human Capital: Effective Use of Flexibilities Can Assist
Agencies in Managing Their Workforces. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-03-2] (Washington: D.C.: December
2002).
[27] U.S. Office of Personnel Management: Human Resources Flexibilities
and Authorities in the Federal Government. (Washington, D.C.: January
2008).
[28] Like most federal agencies, PBGC offers a wide range of employee
benefits such as health benefits, life insurance benefits, paid leave
and holidays, telecommuting or other flexible work schedules, transit
subsidies, retirement investment options, flexible health spending
accounts, long-term care insurance, student loan repayments, child care
and car pool subsidies, and an on-site fitness center--most of which
are available to other federal agencies.
[29] To apply critical position pay authority, the position must
require a very high level of expertise in a scientific, technical,
professional, or administrative field and be crucial to the
accomplishment of an agency's mission.
[30] FIRREA was enacted after the Savings and Loan Crisis, when many
savings and loan institutions in the United States failed. As noted
earlier in this report, the act provided certain federal financial
regulatory agencies flexibility to establish their own pay systems.
[31] See, e.g., B-307849 (Mar. 1, 2007).
[32] GAO, OPM's Central Personnel Data File: Data Appear Sufficiently
Reliable to Meet Most Customer Needs, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO/GGD-98-199] (Washington, D.C.:
Sept. 30, 1998), and GAO, Human Capital: Diversity in the Federal SES
and Senior Levels of the U.S. Postal Service and Processes for
Selecting New Executives, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-08-609T] (Washington, D.C.: Apr. 3, 2008.)
[33] While we concluded that the CPDF information was sufficiently
reliable for the purposes of our review, we did not independently
verify the database as part of this review.
[34] CPDF data did not include complete information on pension law
specialists for part of fiscal years 2005, 2006, or 2007, due to PBGC's
reassignment of those specialists to a non-pension law specialist code.
This difference did not materially affect our CPDF analysis, and we
included the relevant information for the newly coded specialists in
figure 5 and table 2 in the body of the report.
[35] These financial regulatory agencies include the Commodity Futures
Trading Commission, Farm Credit Administration, Federal Deposit
Insurance Corporation, Federal Housing Finance Board, the National
Credit Union Administration, Office of the Comptroller of the Currency,
Office of Federal Housing Enterprise Oversight, Office of Thrift
Supervision, and Securities and Exchange Commission. We did not include
the Federal Reserve Board, as the CPDF does not include data for that
agency.
[36] OPM delegates competitive examining authority to federal agencies
to fill competitive civil service jobs with applicants from outside the
federal workforce and with federal employees that do and do not have
competitive service status. OPM can suspend or revoke an agency's
certification of an agency's delegated examining office at any time,
with or without advance notice. For more information on OPM's
competitive examining process, see OPM, Delegated Examining Operations
Handbook: A Guide for Federal Agency Examining Offices (Washington,
D.C.: May 2007).
[37] GAO, Human Capital: Key Principles for Effective Strategic
Workforce Planning, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-
04-39] (Washington, D.C.: December 2003).
[38] GAO, A Model of Strategic Human Capital Management, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-02-373SP] (Washington, D.C.:
March 2002).
[End of section]
GAO's Mission:
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people.
GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding
decisions. GAO's commitment to good government is reflected in its core
values of accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each
weekday, GAO posts newly released reports, testimony, and
correspondence on its Web site. To have GAO e-mail you a list of newly
posted products every afternoon, go to [hyperlink, http://www.gao.gov]
and select "E-mail Updates."
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. Government Accountability Office:
441 G Street NW, Room LM:
Washington, D.C. 20548:
To order by Phone:
Voice: (202) 512-6000:
TDD: (202) 512-2537:
Fax: (202) 512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]:
E-mail: fraudnet@gao.gov:
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Ralph Dawn, Managing Director, dawnr@gao.gov:
(202) 512-4400:
U.S. Government Accountability Office:
441 G Street NW, Room 7125:
Washington, D.C. 20548:
Public Affairs:
Chuck Young, Managing Director, youngc1@gao.gov:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548:
