Private Pensions: Changes Needed to Better Protect Multiemployer Pension Benefits

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.

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.

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.

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.

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.