Pension Plans: Possible Effects of Requiring Employers To Make Contributions Sooner

HRD-88-28 Published: Oct 30, 1987. Publicly Released: Dec 01, 1987.

Highlights

In response to a congressional request, GAO determined the effects of the administration's proposal to change the timing of employers' contributions to their single-employer pension benefit plans.

Recommendations

Matter for Congressional Consideration

Matter	Status	Comments
In debating legislation that would amend the Employee Retirement Income Security Act to require employers to pay contributions sooner, Congress should consider limiting the requirement to employers sponsoring plans that do not have a sufficient funding level to provide security for participants' benefits and to protect the insurance program from claims.	Closed – Implemented	The Pension Protection Act, as part of the Omnibus Budget Reconciliation Act enacted on December 22, 1987, changed existing law to require employers to make contributions required for 1 year in four installments, with the total contribution due 8.5 months after the end of the plan year.

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Retirement Security

Administrative costsFringe benefit costsInsurance premiumsPension plan cost controlRetirement benefitsPensionsPension planBusiness operationsEmployee retirementsData errors