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Opening Statement of U.S. Senator Michael B. Enzi (R-WY) Nomination of Charles Millard to be Director of the Pension Benefit Guaranty Corporation


Slightly more than a year ago, the President signed into law the PensionProtection Act which made the most sweeping changes to our nation’s retirement savingslaws since the enactment of ERISA and the establishment of the Pension BenefitGuaranty Corporation (PBGC) in 1974. The driving force for getting that law through Congress was the pending fundingshortfall of the PBGC and the spike in the number of companies that were falling behindon funding their pension obligations and the potential exposure to the pension insuranceprogram. Even though there are provisions of the Pension Protection Act that have yet togo into effect, there is little doubt that the law has made a vast and fundamentalimprovement in the soundness of employees’ pensions throughout the nation. Today, we review the nomination for the Director of the PBGC, a newlyconfirmableposition pursuant to the Pension Protection Act. We took this important stepto elevate the position because the Director is the steward for the PBGC’s verysubstantial Trust Fund assets. The Director must posses the management skills andfinancial background to look into the future and position the Corporation on the rightcourse to ensure that the billions of dollars of worker’s retirement savings are there incase they need them. I do foresee events on the horizon that will determine whether companiescontinue to offer defined benefit plans to their employees. For example, the FinancialAccounting Standards Board will be releasing later this year proposals to update andrevise the accounting standards for pension plans and retirement health care. Theseproposals could have broad ramifications on how companies’ must account for pensionplans on their financial statements Also, the PBGC Director must take care to implementpractices, policies and procedures that do not discourage companies from offeringdefined benefit plans to their employees. With respect to the corporate structure, the PBGC is unique within the federalgovernment. It is a wholly owned federal corporation with three Cabinet Secretariescomprising the Board of Directors. This presents its own set of benefits and challenges.When Senator Sarbanes and I drafted the Sarbanes-Oxley Act, we recognized that strongcorporate governance was essential to the operation of any public corporation. I believethe same is necessary of our federal government corporations as well.With respect to the PBGC, keeping the Board fully informed and engaged isessential to the operation of the Corporation, and the role of an independent auditcommittee must be held by the Inspector General of the Corporation. When I met with Mr. Millard in July, he expressed his desire to bring many of theprivate sector corporate governance practices to the PBGC. Since his short tenure asInterim Director at the Corporation, there is evidence that he is making corporategovernance a top priority. I believe that he has the management and financial background to be Director. Ilook forward to his testimony today to hear his perspective on the implementation of thePension Protection Act and to hear his vision for the financial safety and soundness of theCorporation so that millions of workers covered by this insurance program can lookforward to their “golden years” of retirement. ####