Investigation To Reform Teamsters' Central States Pension Fund Found InadequateGao ID: HRD-82-13 April 28, 1982
For many years, the Teamster's Pension Fund trustees have been the subject of allegations of misuse of the Fund's assets. Therefore, the Department of Labor initiated an investigation of the Fund and, in response to a congressional request, GAO reviewed the Government's investigation.
Labor's objective of having a Government-wide coordinated investigation did not succeed because the Internal Revenue Service (IRS) declined to participate in a joint investigation. Labor's investigation disclosed many alleged significant problems in the former trustees' management of the Fund's operations. However, Labor narrowly focused on the Fund's real estate and collateral loans, ignored other areas of alleged abuse, and left unresolved questions of potential civil and criminal violations. Investigations were not completed even though significant fiduciary violations and imprudent practices were found. The office responsible for the investigations had significant staffing, management, and coordination problems. The flow of investigative information between Labor and the Department of Justice was restricted at times. The investigation's objective to detect information for criminal investigation and prosecution was not entirely successful. Labor and IRS did not require a written agreement in restoring the Fund's tax-exempt status and did not ensure that the Fund's new trustees met stated qualifications. Even after appointing independent investment managers, the Fund's trustees tried to reassert control over the Fund's assets and investments. In addition, the Fund's benefits and administration account was not adequately monitored. As a result, the pension plan is still thinly funded. The Fund's financial soundness has improved by recent investment performance, but it is still thinly funded and has an unfunded liability of $6.05 billion.Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.Director: Franklin A. Curtis Team: General Accounting Office: Human Resources Division Phone: (202) 275-5451