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, and participants had no guarantee that they would receive promised benefits. Title IV of ERISA created PBGC to insure private sector plan participants’ benefits. 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). 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. 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. In June 2007, we examined the actions these agencies have taken to assess and implement comparability in pay and benefits with each other. 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. 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. 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, 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. 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. 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. 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. 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. 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). 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. 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). PBGC’s attrition rates for staff hired from fiscal years 2000 to 2007 were also similar to rates at other federal executive branch agencies.