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As part of its overall investment program, the Pension Benefit Guaranty Corporation (PBGC) engages in securities lending. This report evaluates PBGC’s policies and procedures governing the securities lending program, and its monitoring of its contract with State Street Bank which acts as PBGC’s agent for the program. This work was conducted by Independent Fiduciary Services (IFS) under contract to the Office of Inspector General.
Specifically, IFS (1) evaluated the adequacy of PBGC’s monitoring State Street Bank activities; (2) how the PBGC contract compared to similar agreements in the industry; and (3) whether the arrangement was advantageous to PBGC.
IFS identified several findings and recommended a number of corrective actions. In general, the findings dealt with the absence of PBGC written polices and guidance for the program. PBGC provided a written response with proposed corrective actions. We agree with the actions proposed.
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