Underfunded Pension Plans: Stronger Funding Rules Needed to Reduce
Federal Government's Growing Exposure (Testimony, 06/15/94,
GAO/T-HEHS-94-191).
Although the majority of pension plans insured by the Pension Benefit
Guaranty Corporation (PBGC) are well funded, a significant minority are
underfunded, and the level of underfunding in these plans has been
growing in recent years. This growth increases PBGC's exposure, which
refers to the size of its potential claims. This testimony makes three
main points. First, current rules designed to ensure that sponsors of
underfunded plans make additional contributions to better fund their
plans are not working well. Second, provisions in the administration's
proposed pension reform bill--S. 1780, the Retirement Protection Act of
1993--especially the revised offset design, should increase both the
number of sponsors of underfunded plans that make additional
contributions and the amount of those contributions. Third, GAO believes
that the proposed funding provisions should be strengthened further to
ensure that an even greater percentage of underfunded plan sponsors make
additional contributions.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-HEHS-94-191
TITLE: Underfunded Pension Plans: Stronger Funding Rules Needed to
Reduce Federal Government's Growing Exposure
DATE: 06/15/94
SUBJECT: Financial management
Pension plan cost control
Retirement pensions
Proposed legislation
Insurance regulation
Financial institutions
Insurance premiums
Employee benefit plans
Liability (legal)
Pension claims
IDENTIFIER: Retirement Protection Act of 1993
PBGC Single Employer Pension Insurance Program
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