The last time the Pension Benefit Guaranty Corp. board met, the Dow Jones Industrial Average was over 12,000, and most U.S. companies were reporting strong profits.

Barbara Bovbjerg, a director at the U.S. Government Accountability Office, today testified before a Senate Aging Committee hearing on the PBGC that the PBGC’s 3-member board last met in February 2003.

Since then, analyses from organizations such as Milliman Inc., Seattle, and Towers Perrin Forster & Crosby Inc., Philadelphia, have suggested that funding levels at PBGC-insured defined benefit pension plans have deteriorated rapidly.

In addition, a GAO review of PBGC board records shows that the typical PBGC board meeting held since 2003 has lasted only about an hour, Bovbjerg reported.

Congress structured the PBGC board in a statute. The board includes only the secretaries of Labor, Commerce and Treasury, Bovbjerg says.

When the PBGC board meets, “very little time is spent on addressing strategic and operational issues,” Bovbjerg testified, according to a written version of her remarks.

The PBGC faced a $11 billion net deficit in September 2008, and that net deficit is probably worse today, Bovbjerg said.

“Legislative changes and the plight of the automakers and other financially weak sponsors in other industries have the potential to expose the PBGC to claims of a potentially unprecedented magnitude,” Bovbjerg warned.

The PBGC has tried to address its own funding shortfalls by investing part of its assets in stock.

“Although returns are indeed likely to grow with the new allocation, the risks are likely higher as well,” Bovbjerg said.

Links to Bovbjerg’s written testimony and other hearing documents are available here.