B-307849, Pension Benefit Guaranty Corporation--Reimbursement for Financial Analysis Services, March 1, 2007

B-307849 Mar 01, 2007 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights The Pension Benefit Guaranty Corporation (PBGC) may not retain a reimbursement for financial analysis services associated with a request for waiver from claims arising under title IV of the Employee Retirement Income Security Act. Absent statutory authority to the contrary, amounts received by government corporations are subject to the miscellaneous receipts statute, 31 U.S.C. sect. 3302(b), and must be deposited into the general fund of the Treasury. View Decision B-307849, Pension Benefit Guaranty Corporation--Reimbursement for Financial Analysis Services, March 1, 2007 Decision Matter of: Pension Benefit Guaranty Corporation—Reimbursement for Financial Analysis Services File: B-307849 Date: March 1, 2007 DIGEST The Pension Benefit Guaranty Corporation (PBGC) may not retain a reimbursement for financial analysis services associated with a request for waiver from claims arising under title IV of the Employee Retirement Income Security Act. Absent statutory authority to the contrary, amounts received by government corporations are subject to the miscellaneous receipts statute, 31 U.S.C. sect. 3302(b), and must be deposited into the general fund of the Treasury. DECISION The General Counsel of the Pension Benefit Guaranty Corporation (PBGC) requests an advance decision, asking whether PBGC may retain a reimbursement for financial analysis services received from a major United States corporation (MUSC).[1] Letter from Judith R. Starr, General Counsel, PBGC, to David M. Walker, Comptroller General of the United States, Apr. 25, 2006 (Starr Letter). We conclude that PBGC has no authority to retain the reimbursement: the amount at issue may not properly be characterized as a gift and PBGC has identified no agency-specific authority to charge a fee for this purpose and to retain the amount collected. Absent statutory authority to the contrary, the miscellaneous receipts statute requires agencies to deposit moneys received for the government into the federal Treasury. 31 U.S.C. sect. 3302(b). BACKGROUND PBGC is a wholly owned government corporation charged with protecting the pensions of American workers in single employer and multiemployer defined benefit plans. PBGC was established by the Employee Retirement Income Security Act of 1974, Pub. L.No. 93'406, 88 Stat. 829 (Sept. 2, 1974) (ERISA), and its mission is: –(1) to encourage the continuation and maintenance of voluntary private pension plans for the benefit of their participants, (2) to provide for the timely and uninterrupted payment of pension benefits to participants and beneficiaries . . ., and (3) to maintain premiums established by [PBGC] . . . at the lowest level consistent with carrying out its obligations . . . .— 29 U.S.C. sect. 1302(a). In discharging its duties regarding defined benefit plans, PBGC performs two distinct functions, one of insurer and one of trustee. See B-289219, Oct. 29, 2002; B-223146, Oct. 7, 1986; B-217281-O.M., Mar. 27, 1985. In its corporate capacity, PBGC insures the pension plans covered by the laws it administers. 29 U.S.C. sect. 1322, 1322a. To that end, PBGC has broad authority to promote the viability of pension plans. For example, PBGC may bring a civil action against an employer to enforce provisions requiring payment of premiums established by PBGC. 29 U.S.C. sect. 1303(e). PBGC also has significant discretion to undertake investigations. 29 U.S.C. sect. 1303(a). ERISA also grants PBGC the power to serve as trustee for terminated pension plans with unfunded benefit liabilities. 29 U.S.C. sect. 1322; B-286026, June 12, 2001. When serving as trustee, –PBGC is treated as if it were a private fiduciary acting on behalf of the [plan] beneficiaries and possesses the same authority and duty to act as would a nongovernmental party if it were appointed to that position.— B-223146, Oct. 7, 1986. When acting in that capacity, PBGC maintains broad authority to protect the interests of plan beneficiaries and trust assets. 29 U.S.C. sect. 1342. See B-223146, Oct. 7, 1986 (permitting PBGC to utilize trust assets to enter a contingent fee arrangement with counsel hired to represent PBGC as trustee of terminated plans); B-217281-O.M., Mar. 27, 1985 (permitting PBGC to obtain the services of investment managers without regard to federal procurement regulations when acting as trustee of terminated plans). Intending to divest itself of one of its subsidiaries, the MUSC determined that the value of the subsidiary would be diminished unless PBGC waived potential claims against the subsidiary arising under title IV of ERISA.[2] Starr Letter. The corporation contacted PBGC to request a waiver of any such claim.