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August 8, 2008
The Government Accountability Office (GAO) has completed a study of the recent experience of the Pension Benefit Guaranty Corporation (PBGC) in hiring and retaining key staff and how it compares to other federal agencies in this regard. The study shows that, from fiscal years 2000 to 2007, PBGC was generally able to hire staff in its key occupations, such as accountants, actuaries, attorneys, auditors, financial analysts, information technology specialists, and pension law specialists, and retain them at rates similar to those of the rest of the federal government. The PBGC’s overall average attrition rate was about 6 percent, roughly equal to that of other federal agencies over the same period.
However, the PBGC has had some difficulty with hiring and retaining staff for specific occupations and positions, including executives and senior financial analysts. 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 government wide, and 5.5 percent for the financial regulators.
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 the PBGC’s existing compensation structure, which offers salaries lower than some federal agencies that employ similar staff, such as the Federal Deposit Insurance Corporation.
Further analysis and action are needed
According to the GAO study, while the 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, PBGC 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, the 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, the study said.
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 recommendations
GAO recommended 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 these recommendations.
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