Retirement Security:

Trends in Corporate Restructurings and Implications for Employee Pensions

GAO-19-447R: Published: Jul 12, 2019. Publicly Released: Jul 12, 2019.

Additional Materials:


Charles Jeszeck
(202) 512-7215


Office of Public Affairs
(202) 512-4800

Retirees and workers' pension benefits often depend on the financial well-being of their employers. Corporate restructurings (such as mergers and acquisitions or bankruptcy restructuring) can result in changes to retirement benefit plans.

We examined trends in corporate restructuring since 1999 and their implications for pension benefits.

We found that mergers and acquisitions comprised the largest share of restructuring from 1999-2018. Their effects on pension benefits are often difficult to determine. Comprehensive data detailing the effects of corporate restructuring on retirement benefit plans do not exist.


Photo of a broken piggy bank resting atop $100 bills.

Additional Materials:


Charles Jeszeck
(202) 512-7215


Office of Public Affairs
(202) 512-4800

What GAO Found

Over the past 20 years, corporate restructurings, particularly mergers and acquisitions (M&A) tended to happen more frequently during periods of economic expansion. GAO's analysis found that from 1999 through 2018, M&A activity comprised the largest share of corporate restructurings. In terms of dollar value of completed deals, M&A activity experienced relative peaks in 2000, 2007, 2015-2016, and 2018. The number of M&A deals followed a similar trend. Further, GAO found that company takeovers comprised the largest share of completed M&A activity during the time period, and many completed deals included private equity involvement, that is generally a transaction involving equity capital not quoted on a public exchange.

Since 2009, M&A deals, on average, have tended to be completed in shorter time frames. In contrast, large bankruptcies—those $305 million or more in 2018 dollars—occurred during periods of economic distress and peaked during the two most recent recessions.

The effects of corporate restructuring on retirement plans are generally unclear. Limited data make it difficult to understand or determine the effects, if any, of corporate restructurings on pension benefits. Two key sources of data we analyzed, the Bloomberg Terminal and the UCLA LoPucki Bankruptcy Research Database, may not contain the full array of restructuring events and do not include data or other key information on pension plans. In addition, pension benefit changes may be made with or without regard to any underlying restructuring event and such restructurings could result in business and economic efficiencies. One expert stated that, as with corporate restructuring events, the acquiring firm will often harmonize their benefits so the target firm's benefits are made similar to the acquiring firm. Thus, some employees could obtain access to another company's pension and benefit programs. Other experts told GAO that a restructuring may prompt a company to re-think its employee benefit structures. Moreover, a few experts said there is less time for some stakeholders, including employees and retirees, to determine how the restructuring will impact their pension plan. As a consequence, these experts said affected stakeholders, including retirees and the Pension Benefit Guaranty Corporation may be excluded from certain negotiations.

As noted in previous GAO work, bankruptcy transactions may have adverse effects for employees as bankruptcy can be a contentious process where stakeholders compete for assets that are often diminishing in size. On average, firms that emerge from bankruptcy do so with over one-quarter fewer employees than they had prior to filing for bankruptcy.

Why GAO Did This Study

Participants' retirement benefits are often dependent on the financial well-being of their employers. Employers offer pensions on a voluntary basis, and may decide to freeze or terminate a defined benefit plan at any time for financial and non-financial reasons. For defined contribution (DC) plans, such as employer-sponsored 401(k) plans, financial difficulties could also diminish an employer's ability to make employer contributions. Recent examples of corporate restructurings, such as M&A or bankruptcy restructurings, show they can result in a change or elimination of retirement benefits thus affecting the financial wellbeing of workers and retirees.

GAO was asked to describe the trends in corporate restructuring over the last 20 years, and what is known about the effects, if any, they have on pension benefits for employees and retirees. This report provides information on the trends in corporate restructuring—in particular, M&A activity—since 1999, and the implications for such events on employee and retiree pension benefits. To conduct this work, we obtained and analyzed available data; interviewed agency officials as well as pension and corporate restructuring experts; and reviewed relevant federal laws and regulations.

GAO is not making recommendations in this report.

For more information, contact Charles Jeszeck at (202) 512-7215 or

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