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Highlights

Thirty years ago Congress enacted protections to ensure that participants in multiemployer pension plans received their promised benefits. These defined benefit plans are created by collective bargaining agreements covering more than one employer. Today, these plans provide pension coverage to over 10.4 million participants in approximately 1,500 multiemployer plans insured by the Pension Benefit Guaranty Corporation (PBGC). In this report, GAO examines (1) the current status of nation's multiemployer plans; (2) steps PBGC takes to monitor the health of these plans; (3) the structure of multiemployer plans in other countries; and (4) statutory and regulatory changes that could help plans provide participants with the benefits they are due. To address these questions, GAO analyzed government and industry data and interviewed government officials, pension experts and plan practitioners in the United States, the Netherlands, Denmark, United Kingdom, and Canada.

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Recommendations

Matter for Congressional Consideration

Matter Status Comments
To provide greater transparency of the current status of multiemployer plans, assist federal monitoring efforts, and help plans address their funding deficiencies, Congress may wish to consider consolidating the annual funding notices and the PPA notices of critical or endangered status to eliminate duplicative reporting requirements.
Closed - Not Implemented
As of FY16, the Congress has not taken any action on this matter.
To provide greater transparency of the current status of multiemployer plans, assist federal monitoring efforts, and help plans address their funding deficiencies, Congress may wish to consider requiring IRS, EBSA, and PBGC to establish a shared database containing all information received from multiemployer plans.
Closed - Not Implemented
As of FY16, the Congress has not taken any action on this matter.

Recommendations for Executive Action

Agency Affected Recommendation Status
Employee Benefits Security Administration 1. To improve the quality of information and oversight of multiemployer plans, the EBSA, IRS, and PBGC should amend existing interagency memoranda of understanding to address, among other things, the agencies' plans for sharing information they collect on multiemployer plans on an ongoing basis. Specifically, the agencies should address how they will share data: (1) To identify the universe of multiemployer plans. (2) To reconcile similar information received by each agency. (3) To identify possible reporting compliance issues and take appropriate enforcement action. The agencies should revisit this agreement periodically to determine whether modifications are required to ensure that each agency is able to carry out its responsibilities.
Closed - Implemented
In January 2011, Labor indicated that it would continue to work with IRS and PBGC to determine the best approach for more effective information sharing on multiemployer plans. It noted that EBSA's Office of Chief Accountant and IRS's Employee Plans Examinations had taken steps to establish a procedure to allow IRS to provide EBSA a list of actuarial certifications of funded status for multiemployer plans. In its 2013 update, PBGC identified numerous steps it took to share multiemployer plan information with IRS and EBSA, including providing lists of the universe of multiemployer plans, terminated and/or insolvent multiemployer plans, lists of plans filing critical and endangered status notices, and plans that failed to provide annual funding notices. In addition, in 2012, IRS reported that it continues to receive and share data on multiemployer defined benefit actuarial certifications with both EBSA and PBGC.
Pension Benefit Guaranty Corporation 2. To implement better and more effective oversight practices, the Director of the PBGC should develop a more proactive approach to monitoring multiemployer plans, such as assigning case managers to work with the plans that pose the greatest risk to the agency and provide non-financial assistance to troubled plans on an ongoing basis.
Closed - Implemented
In January 2011, PBGC indicated that its multiemployer specialists continued to provide technical assistance to help multiemployer plan administrators improve their funding status and other issues. The agency further noted that it cannot compel plans to seek assistance or adopt any of the potential remedial measures available under ERISA. In response to our recommendation, PBGC reported in a May 2013 letter to GAO that it had taken numerous actions since 2011 to implement better and more effective oversight practices including: (1) re-assigning four attorneys to work primarily on multiemployer plan matters in a position similar to a case manager; (2) awarding an audit services contract to allow PBGC staff time to develop nonfinancial assistance to plans; (3) initiating proactive efforts to identify plans that would benefit from PBGC technical assistance and informal guidance; (4) contacting troubled multiemployer plans to obtain data on the plan?s financial situation and to create avenues to engage PBGC staff in dialog about options to improve plan health and the financial assistance process; and (5) authorizing five additional positions to administer and oversee financial assistance extended to troubled multiemployer plans.
Pension Benefit Guaranty Corporation 3. To improve the quality of information and oversight of multiemployer plans, the EBSA, IRS, and PBGC should amend existing interagency memoranda of understanding to address, among other things, the agencies' plans for sharing information they collect on multiemployer plans on an ongoing basis. Specifically, the agencies should address how they will share data: (1) To identify the universe of multiemployer plans. (2) To reconcile similar information received by each agency. (3) To identify possible reporting compliance issues and take appropriate enforcement action. The agencies should revisit this agreement periodically to determine whether modifications are required to ensure that each agency is able to carry out its responsibilities.
Closed - Implemented
In January 2011, PBGC indicated that it would coordinate with IRS and EBSA to consider necessary amendments to existing memoranda of understanding to identify the specific types of information and timeframes for sharing information between agencies. In its 2013 update, PBGC identified numerous steps it took to share multiemployer plan information with IRS and EBSA, including providing lists of the universe of multiemployer plans, terminated and/or insolvent multiemployer plans, lists of plans filing critical and endangered status notices, and plans that failed to provide annual funding notices. In addition, in 2012, IRS reported that it continues to receive and share data on multiemployer defined benefit actuarial certifications with both EBSA and PBGC.
Internal Revenue Service 4. To improve the quality of information and oversight of multiemployer plans, the EBSA, IRS, and PBGC should amend existing interagency memoranda of understanding to address, among other things, the agencies' plans for sharing information they collect on multiemployer plans on an ongoing basis. Specifically, the agencies should address how they will share data: (1) To identify the universe of multiemployer plans. (2) To reconcile similar information received by each agency. (3) To identify possible reporting compliance issues and take appropriate enforcement action. The agencies should revisit this agreement periodically to determine whether modifications are required to ensure that each agency is able to carry out its responsibilities.
Closed - Implemented
In 2011, Treasury indicated that IRS had memoranda of understanding to share taxpayer information with Labor and PBGC under certain circumstances. It noted that IRS and Labor had established a formal information-sharing agreement, under which IRS would provide the actuarial certification lists in the format requested by DOL for a 1-year period, with the expectation that Labor would renew its request for this information in its annual requests for information on multiemployer plans. Also, Treasury indicated that PBGC had provided IRS with an updated list of all multiemployer plans that had been compiled using the most recent PBGC premium payment records. In FY15, Treasury officials provided evidence of data-sharing between IRS and PBGC on a recurring quarterly basis that included the aggregate number of actuarial certifications submitted by multiemployer plans and their reported funded status.
Department of the Treasury 5. To collect more useful information from plans, the Secretary of the Treasury should direct the IRS to develop a standardized electronic form for annual certifications that requires plans to submit their funded percentage.
Closed - Implemented
Treasury generally agreed with this recommendation and said the agency would consider adding funded status to the annual certification process when developing future guidance, and would discuss the feasibility of a standardized electronic form for this purpose. In 2011, Treasury indicated that IRS's Employee Plans Compliance Unit viewed the development of a standardized electronic form as desirable and feasible within a reasonably short time frame. In its 2013 update, IRS indicated that the idea of the electronic form had been discussed and met no objection. However, to date, such a form has not been implemented for plan sponsors to use. In FY15, Treasury officials noted that Treasury/IRS considered creating an electronic form, but were not able to mandate electronically filing of the annual certifications due to statutory limitation 6011(e). They also drafted a standardized form to be used for the multiemployer actuarial certifications and provided a copy of the proposed form, which included a blank for plan actuaries to fill in a plan's funded percentage.

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