Legislative Changes Needed To Financially Strengthen Single Employer Pension Plan Insurance Program

Gao ID: HRD-84-5 November 14, 1983

In connection with the Pension Benefit Guaranty Corporation's (PBGC) self-financing insurance program to protect the benefits of private pension plan participants, GAO examined information on pension plans which were terminated as of September 30, 1981.

Since its inception, the PBGC insurance program has been operating at an increasing deficit. The deficit has risen because net claims for benefits owed by terminating plans accumulated in greater amounts than could be financed by premiums. The liquidity of the insurance program has not been jeopardized thus far; however, if the premium rate is not raised the program's ability to pay guaranteed benefits in the long term could be threatened. GAO believes that a proposed premium rate increase is reasonable and necessary to reduce the deficit.

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: Joseph F. Delfico Team: General Accounting Office: Human Resources Division Phone: (202) 512-7215


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