Two House members have asked the Government Accountability Office to investigate whether the federal agencies that enforce pension law have failed to properly oversee the consultants and money managers who help decide how money is invested.
The request, from Rep. George Miller, D-Calif., and Rep. Edward J. Markey, D-Mass., points to the collapse earlier this year of the employee pension plans at United Airlines. In a letter to the GAO, the men wrote that while how companies fund their pension plans and account for pension liabilities has come under scrutiny, not enough attention has been given to how pension plan funds are regulated from the start.
Currently, the supervision responsibility over pension plans is split between a trio of federal agencies. Meanwhile, money managers are regulated by the Securities and Exchange Commission, which has no authority over pension law.Congress has recently taken up the cause of trying to close loopholes in the pension law, as the federal agency that insures pensions takes on the liabilities of a number of corporate failures. Country-wide, government estimates put the deficit of traditional pensions at $450 billion. The Pension Benefit Guaranty Corp., which takes over failed plans, is itself underfunded by more than $22.8 billion. Last year, the PBGC calculated that financially weak companies with a reasonable chance of terminating their pensions are $96 billion short of covering promised benefits.
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