Improved Processes Needed To Insure Timely Benefit Payments to Participants of Single Employer Pension Plans
HRD-84-58
Published: May 31, 1984. Publicly Released: May 31, 1984.
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Highlights
In response to a congressional request, GAO reviewed the effectiveness of the Pension Benefit Guaranty Corporation (PBGC) processes for ensuring that participants in private pension plans receive guaranteed benefits when plans terminate.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Pension Benefit Guaranty Corporation | To provide for more timely payment of benefits to participants of terminating insufficient pension plans, the Executive Director of PBGC should establish a tracking system that focuses management attention and actions on restoring suspended participant benefits and procedures for reimbursing participants for missed benefit payments on an estimated basis when PBGC starts making estimated monthly payments. |
Closed – Implemented
PBGC established a monthly status report for those out of pay status and updated the PBGC operations manual to reflect this.
|
| Pension Benefit Guaranty Corporation | Because PBGC may be precluded from restoring benefits in plans that may be subject to lengthy court action, the Executive Director of PBGC should assess experience in dealing with these cases and, if warranted, seek legislative authority that would permit PBGC to appoint a receiver to assume control of plans where participants' benefits are jeopardized. |
Closed – Implemented
PBGC submitted proposed legislation in accordance with this recommendation and it was included in S 1730, November 14, 1985. However, the legislation was deleted from H.R. 3128, which was passed on March 20, 1986, and forwarded to the President.
|
| Pension Benefit Guaranty Corporation | To augment new PBGC procedures for collection and review of sufficient pension plan data, the Executive Director of PBGC should provide guidelines for PBGC officials to periodically test enrolled actuary certifications to ensure that they are accurate and comply with PBGC regulatory requirements. |
Closed – Implemented
An enrolled actuaries post audit program was developed and a sampling methodology has been set up to periodically test a certain percentage of terminated plans determined to be sufficiently funded.
|
| Pension Benefit Guaranty Corporation | The Executive Director of PBGC should require consistent application of procedures for confirming that participants of sampled plans are receiving payment of benefits approved by PBGC and revise confirmation procedures to require that key data, such as age, years of employment, and salary, also be confirmed with participants. |
Closed – Implemented
The PBGC recently developed enrolled actuaries post audit program provides for confirming, on a sample basis: (1) that participants are receiving PBGC approved benefit payments; and (2) key data elements with participants.
|
| Pension Benefit Guaranty Corporation | The Executive Director of PBGC should: (1) analyze insurance program records to identify individuals in plans trusteed by PBGC from 1974 through 1980 who have become eligible for but are not receiving guaranteed benefits; (2) submit the names of individuals who cannot be located from PBGC records for current address searches to the Internal Revenue Service and to the Social Security Administration upon completion of arrangements to use Social Security Administration data; and (3) provide benefits to individuals located through this process. |
Closed – Implemented
PBGC has been receiving periodic data from the Social Security Administration to update its files.
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Topics
Employee benefit plansLate paymentsProgram managementRetirement benefitsBenefit paymentsHuman capital managementEmployee retirementsPension plansPension plan terminationsPrivate pension plans