Leveraged Buy-Out Funds:
Investments by Selected Pension Plans
HRD-89-121: Published: Aug 1, 1989. Publicly Released: Aug 1, 1989.
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Pursuant to a congressional request, GAO reviewed the role of private and public pension funds in leveraged buy-outs (LBO), focusing on the: (1) methods pension plans used to evaluate LBO-funded investments; (2) principal provisions of LBO-fund limited-partnership agreements; (3) rate of return pension plans obtained on LBO-fund investments; and (4) Department of Labor's oversight of pension plan investments in LBO funds.
GAO found that: (1) the 8 public and private pension plan sponsors reviewed invested about $3.7 billion in 53 LBO funds, ranging from 0.4 to 8.4 percent of their assets; (2) plan sponsors evaluated investments based on the experience of the general partner, since they generally did not know the acquisition target or price; (3) the heavy leveraging associated with LBO increased their vulnerability to an economic turndown or a rise in interest rates; (4) 2 of the 6 partnership agreements limited the amount of capital for acquisitions to 10 or 25 percent of the total capital commitments and indicated that they would use the capital to make between 5 and 20 acquisitions, 4 did not specify the number of acquisitions they would make, and 4 limited their investments to friendly takeovers; (5) although funds did not permit limited partners to unilaterally withdraw from participation, they permitted limited partners to sell or transfer interest in the fund; (6) the annual rate of return that six of the eight sponsors obtained greatly exceeded the return obtained on the total plan investments; and (7) although Labor conducted one investigation concerning allegations that an LBO fund's general partner received a disproportionately large share of the profits, it closed the investigation without finding any violations.
Oct 30, 2020
Retirement Security:
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Sep 24, 2020
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Retirement Security:
Older Women Report Facing a Financially Uncertain FutureGAO-20-718T: Published: Sep 24, 2020. Publicly Released: Sep 24, 2020.
Aug 28, 2020
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Retirement Security:
DOL Could Better Inform Divorcing Parties About Dividing SavingsGAO-20-541: Published: Jul 31, 2020. Publicly Released: Aug 28, 2020.
Aug 13, 2020
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Retirement Security:
Older Women Report Facing a Financially Uncertain FutureGAO-20-435: Published: Jul 14, 2020. Publicly Released: Aug 13, 2020.
Jun 16, 2020
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Retirement Security:
BLS Should Explore Ways to Improve the Accuracy, Timeliness, and Relevance of Its Cost-of-Living MeasurementsGAO-20-422: Published: Jun 16, 2020. Publicly Released: Jun 16, 2020.
Feb 27, 2020
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Private Pensions:
IRS and DOL Should Strengthen Oversight of Executive Retirement PlansGAO-20-70: Published: Jan 28, 2020. Publicly Released: Feb 27, 2020.
Jan 9, 2020
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Social Security Disability:
Action Needed to Help Agency Staff Understand and Follow Policies Related to Prescription Opioid MisuseGAO-20-120: Published: Jan 9, 2020. Publicly Released: Jan 9, 2020.
Dec 18, 2019
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Capitol Police:
Potential Effects of Raising the Mandatory Retirement AgeGAO-20-137R: Published: Dec 18, 2019. Publicly Released: Dec 18, 2019. -
Millennial Generation:
Information on the Economic Status of Millennial Households Compared to Previous GenerationsGAO-20-194: Published: Dec 13, 2019. Publicly Released: Dec 18, 2019.
Oct 21, 2019
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Military Pensions:
Servicemembers Need Better Information to Support Retirement Savings DecisionsGAO-19-631: Published: Sep 19, 2019. Publicly Released: Oct 21, 2019.
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