US - The Pension Benefit Guaranty Corp (PBGC) faces serious operational and organisational challenges in its human resources, according to a damning report issued last week by the US Government Accountability Office (GAO).
The report stated the PBGC had experienced difficulty in replacing positions such as the chief financial officer, senior financial analyst, systems accountant and procurement attorney, but also had a far higher than average turnover of financial analysts.
The attrition rate for financial analysts was more than double that of other federal executive branch agencies, such as the Federal Deposit Insurance Corporation (FDIC) and Securities and Exchange Commission (SEC) (8.4% against 3.7%), and higher than other financial regulators (5.5%).
Overall, there was a 40% employee turnover on financial analysts - 83% of whom resigned, compared to 24% at other agencies.
With the exception of auditors, IT specialists and pensions law specialists, employees were more likely to resign from the PBGC than other federal agencies.
The report stated it was "common for employees to find employment with the private sector after leaving PBGC".
Although the number of staff due to retire (almost 25%) was lower than comparable bodies - where a third (32%) of employees were approaching retirement age - the GAO noted this posed an operational risk due to the loss of key institutional knowledge this would entail.
The GAO also noted the PBGC had a relatively inexperienced staff in some key areas.
Almost a quarter (23.3%) of accountants, auditors, attorneys, financial analysts and actuaries had three or less years experience in federal agency.
Between 2000 and 2007, more than 10% of staff hired in that time left in less than two years.
Compounding these problems, it said the PBGC offered lower pay and compensation than comparable federal agencies, posing a "competitive disadvantage" which "limit[ed] its ability to hire and retain certain key staff".
Despite having discretionary powers to increase some compensation, the PBGC had not taken full advantage of this.
Somewhat counter-intuitively, the PBGC offered higher than average salaries for financial analysts and lower than average salaries for pension law specialists, although between 2005-07, only 7 employees cited low pay as a factor in their resignations.
However, the PBGC did say it would revise its human capital processes in line with the findings of the GAO report.
The PBGC could not be contacted for comment.
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