Outcome Goal 2.2, with net costs of $33.8 billion in FY 2001, represents
95 percent of the costs dedicated to achieving A Secure Workforce and 80
percent of all DOL net costs. Unemployment insurance accounts for the bulk of
expenses, with $27.9 billion paid in unemployment claims in FY 2001, and the
sharp increase in costs from FY 2000 is largely attributable to the rise in the
number of unemployed workers during the past year.
DOL Challenges for the Future
The protection of employee benefits is vital to the future of both
America's workers and the National economy. Most recently, the combination of a
cyclical downturn in the economy and the ripple effect of the terrorist acts of
September 11 has left over two million more workers unemployed in October 2001
than a year earlier. These recent events serve to underscore the need for
strong systems to provide timely temporary income support to sustain eligible
workers and their families, and to help connect job seekers with job openings.
Longer-term challenges to be addressed in this new century can be seen
in the demographics of the workforce. Americans will live and work longer and
require pension and health care benefits for longer periods of time. The worker
who spends an entire career with one company is now the exception rather than
the rule. DOL anticipates an even greater emphasis in the future on pension and
health care benefits that provide the flexibility, portability, and coverage
that American workers deserve.
PAY UNEMPLOYMENT INSURANCE CLAIMS FAIRLY AND PROMPTLY
Unemployed workers receive fair Unemployment Insurance benefit
eligibility determinations and timely benefit payments:
- Increase to 26 the number of States meeting or exceeding the
minimum performance criterion for benefit adjudication quality.
- Increase to 48 the number of States meeting or exceeding the
Secretary’s Standard (minimum performance criterion) for intrastate
payment timeliness.
Results: The goal was not achieved.
- Twenty-five States met the quality performance criterion that 75
percent of claims resolved through formal adjudication have high quality scores
against a target of 26 States. This indicator was substantially achieved.
- Forty-two States achieved the timeliness standard by issuing 87
percent of first payments within three weeks, against a target of 48 States.
Since 47 States achieved the timeliness standard in FY 2000 and the goal was to
increase the number of States meeting the Secretary’s Standard in FY 2001,
this indicator was not achieved.
Program Description: By temporarily replacing part of lost wage
income, the Federal-State Unemployment Insurance (UI) program alleviates
personal and family hardship due to unemployment and stabilizes the economy
during economic downturns. DOL and its State partners established criteria as a
means of judging whether eligibility for benefits was determined fairly and
whether workers received their UI benefits as soon as possible.
Analysis of Results: Analysis showed that three factors
affected performance outcomes overall:
- Economic activity turned down sharply, especially at the end of the
year. This downturn increased claims workloads and contributed to reduced
payment timeliness;
- State law, policy and management priorities affected goals’
performance in various ways. For example, several States which performed below
criteria were in the process of implementing remote claims-taking systems,
which in the past has often been associated with temporary declines in quality
and timeliness; and
- Less than full administrative funding may have affected both
quality and timeliness.
In FY 2001, the States continued to show progress toward improving the
quality of adjudicated benefit determinations. In July 1999, DOL and its State
partners set a criterion, to take effect in FY 2002, that 75 percent of
eligibility determination cases reviewed must have a passing score for a State
to be minimally successful. In view of implementation of a more rigorous review
process and States' performance under it, as well as States' focus on
customer-service improvements such as telephone claims-taking, DOL realized
that many States would not meet the criterion until 2002 or later. The goal for
FY 2001 was for 26 States to achieve the standard, and 25 succeeded. (See chart
below.) Three others were very close, with between 74.1 percent and 74.9
percent of cases having a quality score.
The number of States meeting the first payment timeliness standard for
intrastate payments declined from last year (see chart below). Of the 11 States
missing the criterion in 2001, eight had met the criterion in 2000. A
combination of factors seems to have affected their performance: faster than
average growth in claims (their claims were 31 percent higher than last
year’s, versus the national average of 26 percent); three transitioned to
taking initial claims by telephone, which in some other States temporarily
reduced first-payment timeliness; one State was completely reorganizing its
Labor Department; and three very small States had fewer resources to deploy to
handle rapidly rising claim loads. DOL expects that corrective action
planning— required when standards are missed— will lead to the
attainment of next year’s performance goal. Seven States failed to attain
the time-lapse criterion for the September 1999–August 2000 period. Six
improved their performance in the same period of 2001; four improved enough to
exceed the standard in 2001.
Strategies: DOL will emphasize assisting States in meeting
their rising workload demands while maintaining all possible emphasis on
continuous improvement, and work to develop and gain acceptance of long-term
improvements in efficiency and solvency through UI/Employment Service Reform.
DOL will continue to:
-develop the Resource Justification
Model to improve
administrative
funding;
-provide technical assistance/training
and project development
conferences
to promote continuous improvement in performance; and
-raise performance by monitoring
and through Corrective Action
Plans
and Continuous Improvement Plans
which States incorporate into
their
Quality Service Plans.
Goal Assessment and Future Plans:
For FY 2002, DOL proposes several changes to its goals and indicators
to more fully reflect the UI mission and Administration priorities focusing on
three goals:
Text version
| Benefits Eligibility
Determination Quality |
| Fiscal Year |
Goal |
States
MeetingTarget |
U.S. Average* |
| 1998 |
No criterion |
18 |
70.4% |
| 1999 |
No criterion |
20 |
70.3% |
| 2000 |
24 |
23 |
70.3% |
| 2001 |
26 |
25 |
71.1% |
| *Average State percentage of cases with acceptable quality
scores. |
(1) Make Timely and Accurate Benefit Payments to Unemployed
Workers.
This goal will have two indicators:
a. The national average of intrastate
first payments made within 14/21 days, with a target of 91 percent.
b. A measure of benefit payment accuracy to
reflect the Administration’s emphasis on payment integrity. DOL will
consult with State partners and stakeholders to define the measure and set a
baseline and target in FY 2002.
(2) Facilitate the Reemployment of UI Claimants. DOL and
the States will develop and test a measure and DOL will obtain authority for
data collection.
(3) Set Up UI Tax Accounts Promptly for New Employers.
ETA will use as an indicator the percentage of new employers that receive a
determination about their UI tax liability within 90 days of the end of the
first quarter they become liable for the tax, and has set a target of 80
percent for FY 2002. ■
(Goal 2.2A — FY 2001 Annual Performance Plan)
Text version
| First Payment Timeliness |
| Fiscal Year |
Goal |
States Meeting Target |
U.S. Average* |
| 1996 |
Goal not set |
49 |
92.8% |
| 1997 |
Goal not set |
47 |
92.2% |
| 1998 |
Goal not set |
45 |
90.4% |
| 1999 |
Goal not set |
46 |
89.6% |
| 2000 |
47 |
47 |
89.9% |
| 2001 |
48 |
42 |
89.6% |
| *Percentage of all U. S. first
payments made within 14/21days. |
ENSURE INDIVIDUALS RECEIVE PROMISED BENEFITS
Increase by 2% (to $66 million) benefit recoveries achieved through
the assistance of Pension Benefit Advisors.
Results: This goal was not met. With the assistance of Benefit
Advisers, the Department recovered approximately $65 million for plan
participants in FY 2001 — below the target of $66 million.
Program Description: The Department directly assists plan
participants and beneficiaries in understanding their rights and protecting
their benefits via the Pension and Welfare Benefits Administration’s
(PWBA) participant assistance program. The direct restoration or payment of
benefits to participants without the need for protracted or costly litigation
is a primary objective of the Department.
Analysis of Results: Three external factors beyond the
Department’s control contributed to failing to achieve the goal. First,
benefit recoveries, by their very nature, are volatile from year-to-year.
Second, in FY 2000, the Department experienced several large recoveries (in
excess of $500,000) that cannot be expected from year-to-year. Finally, the
Government-wide hiring freeze resulted in numerous Benefit Adviser positions
remaining unfilled for part of the year and this had a direct and adverse
impact on recoveries.
Notwithstanding these external factors, $65 million is a worthy
achievement. More importantly, while monetary benefit recoveries are an
important performance indicator, they understate PWBA's total customer
assistance impact because important outcomes, such as the restoration of health
benefits or enhancing an individual’s understanding of the law, do not
result in a monetary benefit recovery and therefore cannot be readily
quantified. The Department has experienced an increasing call volume related to
health benefits and, while much of the assistance does not result in a monetary
benefit recovery, DOL nevertheless provides the same high level of service to
resolving these matters.
DOL received approximately 173,000 written or telephone inquiries for
assistance this year. Protecting workers' benefits requires a rapid and
accurate response to customer inquiries, and this criteria is therefore a
meaningful measure of the Department’s performance. DOL responded to 99.3
percent of the written inquiries within 30 days of receipt and responded to
99.9 percent of telephone inquiries by the close of the next business day.
Between FY 1999 and FY 2001, the Department recovered over $194 million for
plan participants as a result of its customer assistance program, an indication
that the Department is realizing the full benefits of increased resources,
customer assistance staff and the efficiencies of improved technologies.
Referrals from the customer service staff also prompt the opening of a
significant number of investigations.
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A rapidly growing information
technology company was experiencing problems meeting its payroll and failed to
transmit employee contributions to its 401(k) plan on a timely basis.
Recognizing their error, the company applied to the Department’s Voluntary
Fiduciary Correction Program (VFCP) to correct the problem The VFCP allows plan
sponsors to identify, on their own initiative, certain technical violations of
the law and to correct those violations by applying through the
Department’s VFCP. Provided certain prescribed criteria are met and
correction is documented, the company avoids the risk of investigation and
liability for a civil penalty and the Department better leverages its limited
enforcement resources. As for the employees, they are able to recoup all
delinquent contributions with interest. As a result of the program, the company
restored in excess of $83,000 in delinquent contributions and approximately
$12,000 in lost earnings. |
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The data used to measure the achievement of this goal are derived from
the Technical Assistance and Inquiry System. During FY 2000, the Department
implemented a new policy to further ensure consistency and accuracy of the data
across regional components. The new policy and a review by an expert in
performance-based management and data analysis provide confidence in the
reliability of these data. PWBA continued to closely monitor the data in FY
2001 and plans to do so in FY 2002.
Text version
Benefit Recoveries
(Millions of
Dollars) |
 |
Strategies: DOL combines an aggressive outreach and education
program to create a knowledgeable consumer who may assist in "policing" his or
her own benefit rights with a highly motivated and trained staff of customer
assistance experts in the field of pension and health laws. Moreover, the
customer assistance staff has access to a wide array of technical experts
throughout the Department.
Goal Assessment and Future Plans:
The Department has maintained this goal in FY 2002 as a partial
indicator of its success but will consider revisions in the future because the
goal fails to adequately measure the total impact of the customer assistance
program. The level of benefit recoveries is only a partial indicator of program
success and does not measure the impact of answering inquiries, educating the
consumer, or responding to the increase in health related questions. ■
(Goal 2.2B — FY 2001 Annual Performance Plan)
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A glass company in New York City
went out of business in the 1980s. PWBA was contacted by a participant of the
defunct company’s pension plan who failed to receive his distribution of
funds from the plan. None of the owners of the company or pension plan sponsors
could be located to direct a distribution to the participant. A third party
administrator held the funds but could not, without direction, distribute the
funds to the participant. The Department intervened and discovered that the
inquiring participant was the only one who had not received his disbursement.
With the assistance of the Department, the third part administrator distributed
approximately $11,000 to the participant. |
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EXPAND PENSION COVERAGE, PARTICULARLY AMONG WOMEN, MINORITIES, AND
SMALL BUSINESS WORKERS
Increase by 1% the number of workers who are covered by a pension
plan sponsored by their employer, particularly women, minorities and workers in
small businesses.
Text version
Pension Coverage
(Millions of
People) |
 |
Results: The results exceeded the goal. The number of private
wage and salary workers in pension programs increased by 3 percent from 48.3
million in CY 1999 to 49.7 million in CY 2000. With respect to those groups
where pension coverage has been historically lower, the increase among women
was four percent, among minorities six percent, and among workers in small
businesses four percent.
Program Description: The Department seeks to improve the
financial security of Americans during their retirement years, particularly by
expanding coverage to those workers who have experienced historically low
pension coverage.
Analysis of Results: Many factors contribute to the expansion
of pension coverage, such as the structure and health of the economy (e. g.,
level of employment and economic growth, labor shortage or surplus, sectoral
shifts in economic activity) and demographics (aging population, increasing
numbers of women and minorities). The significant impact of the economy on this
goal makes it difficult to demonstrate the Department’s direct impact.
Strategies: The Department contributes to retirement financial
security through aggressive educational strategies, such as the Retirement
Savings Education Campaign and Partnerships, targeted public service
announcements, promotional cards in tax returns, 800 telephone line,
interactive web sites, and videos for small businesses, to name a few. The
Department will continue to educate our customers regarding the importance of
retirement planning, particularly participation in pension plans.
Goal Assessment and Future Plans:
The Department has terminated this goal for FY 2002 because of the
difficulty in evaluating the extent of program influences on the result.
■
(Goal 2.2C — FY 2001 Annual Performance Plan)
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An employee, who worked for a New
York company, contacted the Department after she experienced great difficulties
in getting her medical claims paid. She found out that not only was she owed
approximately $3,000, but her medical providers were owed an additional
$28,000. After intervening, the Department discovered that the sponsor only
budgeted a finite amount a month for claims. When total claims processed for a
month were greater than the amount budgeted, the claims would be rolled over
until the following month. This practice resulted in excess of $4.5 million in
unpaid claims impacting approximately 837 participants. As a result of the
Department’s efforts, claims totaling approximately $1 million were paid
immediately and a payment schedule of $30,000 per week was implemented to
reduce the backlog of unpaid claims. The Department continues to monitor the
situation to ensure the weekly payments continue. |
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ASSIST EARLY RETURN TO WORK
Return Federal employees to work following an injury as early as
appropriate indicated by a 2% reduction from the FY 2000 baseline in the
average number of production days lost due to disability.
Results: This goal was not achieved. The overall
Government-wide average lost production days increased by 10.4 percent to 75.2.
Program Description: DOL administers, through the Employment
Standards Administration (ESA), four primary disability compensation programs
that provide benefits to certain workers who experience work-related injury or
disease, and survivors of employees who die from job-related injury or disease.
One of these programs, the Federal Employees' Compensation Act (FECA) program,
affords income and medical cost protection to civilian employees of the Federal
Government and certain other groups.
Analysis of Results: This goal measures the annual number of
lost production days due to workplace injury against the number of Federal
civilian employees. The measurement consists of time lost during the initial
45-day, continuation-of-pay (COP) period while the claim remains in the
jurisdiction of the Federal agency employer, plus lost production days within
the first year of FECA wage-loss benefits following COP. Roughly half of the
FECA wage-loss time is attributable to United States Postal Service cases. That
agency’s average days lost due to work-related injuries and illnesses rose
by nearly 15 percent from FY 2000 to FY 2001. By contrast, total
government-wide lost production days, without the US Postal Service, increased
by only 4.4 percent. It is likely that workforce downsizing underway by the US
Postal Service has decreased the number of light-duty jobs available to injured
workers, directly affecting the average number of lost production days. A
slight decline in overall Federal employment in FY 2001, coupled with an
increase in wage-loss claims which result in more lost production days, also
contributed to the increase in average production days lost.
Text version
Federal Employees'
Lost Production
Days |
 |
Data for FECA lost production days are extracted from the Federal
Employees Compensation National Case Management File and the Compensation
Payment System. Program managers directly responsible for claims processing
review this data. The performance data are then compiled in a separate
operation and distributed widely to field managers and national office
reviewers. Senior managers review final performance reports for issuance in
formal reporting. These review procedures provide confidence that the data are
reliable and appropriate to the performance being measured.
Various Federal employing agencies derive and transmit quarterly to
DOL the data for the COP lost production days from multiple data systems.
Although the Department specifies to the agencies the type of data required,
DOL has no oversight over those data systems.
Strategies: In late FY 2001, the Department began an evaluation
project to study the effectiveness of the Early Nurse Intervention Program in
coordinating appropriate medical services and in facilitating earlier return to
work. The information gathered from this project should help guide DOL’s
efforts in these areas.
Because of unique circumstances being experienced by the US Postal
Service, the Department will revise this goal to separately track that
agency’s lost production days; work with Postal Service management to
determine if internal incentives systems can be better aligned with reducing
lost production days; and work with the Postal Service to identify new
return-to-work strategies which might be more effective in an environment of
downsizing and challenging economic periods, such as consideration of private
sector opportunities for injured Postal workers rather than pursuit of
light-duty jobs within the Postal Service.
Goal Assessment and Future Plans: Lost production days is one
of several measures within the Federal Employees Health and Safety Initiative
used to gauge the success of efforts to increase Federal workplace safety rates
and speed recovery and return to work. In FY 2002, the Department will make
every effort to further decrease average lost production days in FECA wage-loss
cases. However, in light of widespread public health incidents subsequent to
the anthrax events involving postal workers and other Federal employees
responsible for handling mail, the Department revised this goal for FY 2002 to
separately measure lost production days for the US Postal Service and for all
other Federal agencies, and to establish FY 2001 performance results as the new
measurement baseline for all agencies. ■
(Goal 2.2D — FY 2001 Annual Performance Plan)
LONG-TERM DISABILITY CASE REVIEW
Produce $95 million in cumulative first-year savings in the FECA
Program through Periodic Roll Management.
Results: This goal was achieved. Periodic Roll Management (PRM)
produced an additional $31 million in first-year savings in FY 2001, bringing
cumulative total first-year savings to $103 million.
Program Description: DOL administers, through the Employment
Standards Administration (ESA), four primary disability compensation programs
that provide benefits to certain workers who experience work-related injury or
disease, and survivors of employees who die from job-related injury or disease.
One of these programs, the Federal Employees' Compensation Act (FECA) program,
affords income and medical cost protection to civilian employees of the Federal
Government and certain other groups.
Analysis of Results: PRM is aimed at quality management of the
long-term disability rolls, improving service to disabled beneficiaries,
rehabilitating and reemploying partially disabled individuals and adjusting
benefits to accurately reflect eligibility. PRM teams completed over 6,018
reviews in FY 2001, with one-half of the reviews resulting in either an
adjustment to continuing benefit amounts or a termination of benefits. Since
becoming a permanent FECA program operation in FY 1999, PRM has produced over
$300 million in compensation benefit savings.
Text version
Periodic Roll Management Savings
(Cumulative
Savings in Millions) |
 |
Data for this measure are extracted from the Federal Employees
Compensation Periodic Roll Management and Compensation Payment Systems. Program
managers directly responsible for initial production review these data. The
performance data are then compiled in a separate operation and distributed
widely to field managers and national office reviewers. Senior managers review
final performance reports for issuance in formal reporting. These review
procedures provide confidence that the data are reliable and appropriate to the
performance being measured.
Goal Assessment and Future Plans:
Through revisions to district office operational plan goals in FY
2002, the FECA program will sharpen the focus of PRM reviews on more
complicated disability cases and those with the greatest potential for
vocational rehabilitation services. For FY 2002 this goal targets cumulative
(FY 1999 – FY 2002) first-year savings of $122 million, requiring PRM to
produce an additional $19 million in savings. ■
(Goal 2.2E — FY 2001 Annual Performance Plan)
HOLD THE LINE ON MEDICAL COSTS
In the FECA program, reduce the average annual cost for physical
therapy and psychiatric services cases by 1% through focus reviews of services
charged. (Note: This intermediate goal will assist the agency in developing
strategies to reach the overall cost reduction goal. Reduction of overall
average medical costs will be measured against an FY 2000 baseline.)
Results: This performance goal was not achieved. While the
Department successfully reduced the average cost per case for Psychiatric
services by nearly 3 percent over FY 2000, the average cost per case for
Physical Therapy increased by 4.5 percent.
Program Description: DOL administers, through the Employment
Standards Administration (ESA), four primary disability compensation programs
that provide benefits to certain workers who experience work-related injury or
disease, and survivors of employees who die from job-related injury or disease.
One of these programs, the Federal Employees' Compensation Act (FECA) program,
affords income and medical cost protection to civilian employees of the Federal
government and certain other groups.
Analysis of Results: For Psychiatric cases, the application of
stricter guidelines over approval of services in the FECA district offices
contributed to the decline in average case costs. FY 2001 results revealed that
automated system controls, not now available through FECA’s current
systems, are essential to enabling the FECA program to apply industry standards
and monitoring to Physical Therapy and other complicated medical treatment
regimens. Despite an increase in average costs for Physical Therapy cases,
Focus Reviews (case reviews that look at the appropriateness of service)
conducted in late FY 2001 demonstrated the potential for savings in this
service category: reviews of 842 high-cost cases identified 121 cases
warranting adjustments of service limits.
Data for this measure are extracted from the Federal Employees
Compensation Medical Bill Payment System. Program managers directly responsible
for bill processing review these data. The performance data are then compiled
in a separate operation and distributed widely to field managers and national
office reviewers. Senior managers review final performance reports for issuance
in formal reporting. These review procedures provide confidence that the data
are reliable and appropriate to the performance being measured.
Strategies: In FY 2002, the FECA program will review high-cost
(top 1 percent) physical therapy cases to determine whether further treatment
is warranted. Physical therapy treatments account for approximately 13 percent
of all FECA medical outlays. Because medical industry practices, expanding
medical technology and pharmacology, and other external factors continue to
jeopardize FECA’s ability to control medical costs in the future, the
Department is considering procurement of contract services for Utilization
Review. Under Utilization Review, the Department would implement a more
comprehensive program to identify and prevent inappropriate medical costs;
improve medical services for injured Federal employees; improve the likelihood
of successful early recovery from injury and early return to work; and reduce
the rate of injury recurrences.
Goal Assessment and Future Plans:
In FY 2002, the Department will pursue its goal to reduce the average
cost of Total Medical Services by .5 percent vs. the FY 2000 baseline, but will
reformulate the FY 2002 goal to reduce average costs for Physical Therapy and
other selected treatment categories. Analysis of the FY 2001 results show that,
without additional resources for Utilization Review, DOL will not be able to
achieve the goal of reducing average Physical Therapy service costs. ■
(Goal 2.2F — FY 2001 Annual Performance Plan)
ISSUE TIMELY AND ACCURATE DAVIS-BACON WAGE DETERMINATIONS
Each area of the country will be surveyed for all four types of
construction at least every three years, and the resulting Davis-Bacon wage
determinations validly reflect locally prevailing wages/benefits. In FY2001,
complete development of all aspects of a revised Davis-Bacon system.
Results: This performance goal was achieved. The Department
completed process improvements to all relevant components of the Davis-Bacon
wage determination system, tested the components, and initiated Davis-Bacon
wage surveys in sixteen States.
Program Description: DOL's Employment Standards Administration
(ESA) administers and enforces the Davis-Bacon Act. This Act requires the
payment of locally prevailing wages so that Federal contracting practices do
not undercut workers' wages in the community and place local contractors and
workers at a competitive disadvantage. DOL determines and issues wage rates for
covered Federally-funded and assisted construction projects.
Analysis of Results: Several strategies and initiatives
contributed to this successful outcome, most notably:
- Redesign of the data collection form to facilitate scanning and
direct entry of data using optical and intelligent character recognition
(OCR/ICR), bar codes and other electronic data entry technologies;
- Development of a Web-based electronic data collection form;
- Use of a public accounting firm to conduct on-site data
verification for all Davis-Bacon surveys;
- Based upon GAO recommendations, expanding the use of telephone
verification and targeting on-site verification efforts to those submissions
that would have the greatest impact on the resulting wage determination;
- Agreement with the Census Bureau for automated printing and
mailing of all survey data collection forms; and
- Implementation of Statewide surveys and additional data sources to
identify all possible sources of relevant data.
Goal Assessment and Future Plans:
The Department will ensure that future surveys are conducted
accurately and timely. Given the successful completion of the process
improvements made during FY 2001 and ongoing strategic/performance plan
refocusing efforts in ESA, the Department did not include a goal for this
program in the FY 2002 Annual Performance Plan. ■
(Goal 2.2G — FY 2001 Annual Performance Plan)
PROVIDE BENEFITS WHEN DEFINED PENSION PLANS TERMINATE
Reduce processing time from 4–5 years to 3–4 years to
send final, accurate benefit determinations to participants in defined benefit
pension plans taken over by PBGC.
Results: This goal was fully achieved. The average time to
issue final, accurate benefit determinations averaged 3.6 years in FY 2001.
Program Description: The Secretary of Labor serves as the
Chairman of the Pension Benefit Guaranty Corporation (PBGC), which provides
timely and uninterrupted payment of pension benefits to participants whose
defined benefit pension plans terminated, most frequently as a result of the
sponsoring employer's bankruptcy. Benefit determinations tell participants in
plans for which PBGC has become the trustee what pension benefits they will
receive. PBGC pays estimated benefits to all eligible participants retiring
prior to the issuance of a benefit determination, thus ensuring that retirees
receive their benefits when due and without interruption.
Text version
Final Benefit Determinations
(Number of
Years) |
 |
Analysis of Results: PBGC reduced the average timeframe for
issuing final benefit determinations to an average of 3.6 years in FY 2001. The
length of time is largely a result of an intricate series of complex actions --
from verifying plan assets and participant data, to completing an actuarial
valuation and financial and control group analysis. Sponsor bankruptcies and
legal disputes over plan assets also complicate and extend the trusteeship
process. The Participant Record Information Management System, PBGC’s
database of participant information, provides reliable data and is subject to a
variety of internal controls to assure data integrity.
Strategies: PBGC has continued to streamline case processing,
tripling the annual production of benefit determinations over the past seven
years. Focusing these efforts on the oldest cases in the backlog has gradually
reduced the average time for issuing benefit determinations.
Goal Assessment and Future Plans: PBGC reduced the
target for this goal to a three year average processing time for FY2002.
Improvements beyond the 3-year processing target will require legislation to
remove obstacles to further streamlining. PBGC is developing a set of
additional performance goals for FY2003 that will measure the accuracy and
timeliness of payments to beneficiaries and businesses served, including prompt
premium refunds, expedited estimated lump sum benefit payments (for amounts of
$5,000 and less) to participants in plans in trusteeship, timely placement in
pay status for eligible participants (within three months), and accurate
payment of benefits to participants. ■
(Goal 2.2H — FY 2001 Annual Performance Plan)
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After receiving notices that the
financial sponsor of a major airline's under-funded pension plan would exercise
an option to terminate the plan, the Pension Guaranty Corporation (PBGC) swung
into action. PBGC staff worked round-the-clock shifts to ensure that 31,000
covered workers received timely notice by mail that PBGC would become
responsible for their retirement benefits. A concerted effort was also mounted
to prepare final benefit estimates for these workers. Completing estimates for
so large a group often takes three years, this time the estimates were ready in
30 days. With estimates in hand, airline workers could carefully consider
benefit options outlined by PBGC at any of the 34 meetings the agency held near
the airline's major operating locations. Retirees also benefited from
PBGC’s quick action. PBGC made sure that there was no interruption in
monthly benefit checks for those already retired from the airline. For those
about to retire, PBGC issued monthly pension payments in 60 days or less,
cutting processing time in half compared to the last time the agency took over
a major airline pension plan. |
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