Processing of Applications by the Pension Benefit Guaranty Corporation
HRD-90-127: Published: Sep 25, 1990. Publicly Released: Oct 26, 1990.
- Full Report:
Pursuant to a congressional request, GAO reviewed four cases involving pension plans for which the Pension Benefit Guaranty Corporation (PBGC) assumed responsibility after the plans terminated with insufficient assets.
GAO found that: (1) PBGC recognition of a terminated plan's vesting amendment resulted in two previously denied participants being declared eligible and an estimated 73 other participants receiving increased benefits; (2) PBGC fully recognized legislatively mandated minimum vesting standards for plans terminating after December 31, 1981; (3) PBGC properly denied survivor benefits in another case where, at the time the pension plan terminated, the Employee Retirement Income Security Act of 1974 did not require payment of survivor benefits if the participant died before reaching the earliest retirement age; (4) PBGC delayed providing benefits to participants in two plans because the Internal Revenue Service (IRS) took over a year to provide needed tax information; (5) PBGC has not issued benefit payment regulations, resulting in surviving spouses mistakenly believing they are protected when they are not; and (6) IRS and PBGC began developing procedures to speed transfer of tax returns.