Incomplete Participant Data Affect Reliability of Values Placed by Actuaries on Multiemployer Pension Plans

Gao ID: HRD-84-38 September 6, 1984

GAO evaluated the effect of the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA) on employers, participants, and others. Specifically, GAO reviewed the development and reporting of actuarial information.

GAO found that, although pension plan participant data are crucial in determining the actuarial value of pension plans, many multiemployer plans lack complete participant data, causing liabilities and costs of some plans to be understated or overstated by millions of dollars. Nevertheless, pension plan officials continue to use these data to manage and operate plans. This information is also being reported to government agencies for their use in administering and enforcing MPPAA and the Employee Retirement Income Security Act (ERISA). Actuaries usually disclose the extent of missing participant data, but few indicate whether such omissions affect the accuracy of the actuarial valuations.

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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