The office is also recommending in its latest report that the Pension Benefit Guaranty Corporation (PBGC), Internal Revenue Service (IRS), and U.S. Department of Labor (DoL) work together to improve data collection and monitoring efforts. The report said the statutory and regulatory framework for multiemployer plans is not structured to assist plans on an ongoing basis and promotes little interaction among the federal agencies responsible for monitoring and assisting plans and safeguarding participant benefits. The lack of timely and accurate information and interagency collaboration hampers efforts to monitor and assist plans, and to enforce plan requirements.
The GAO warns that for these plans, the effects of the economic downturn, declines in collective bargaining, the withdrawal of contributing employers, and an aging workforce will likely increase their risk of insolvency. Without additional options to address plan underfunding or to attract new employers to contribute to plans, plans may be more likely to require financial assistance from PBGC. The report noted that annual data from the IRS shows that the proportion of multiemployer plans less than 80% funded rose from 23% of plans in 2008 to 68% of plans in 2009.
The GAO studied the structure of multiemployer plans in other countries and found they face short-term and long-term challenges similar to those that U.S. multiemployer plans currently face, including plan funding deficiencies and an aging workforce. However, the plans in these countries are subject to a range of funding, reporting, and regulatory requirements that require plans to interact frequently with pension regulators. The report said multiemployer plans in these countries have a number of tools available to improve and maintain their funded status, such as increasing contributions and reducing the rate of benefit accruals.The GAO report is here.
« Average Employee Earnings Fell from September to October