GAO Reports

In June 2018, the Government Accountability Office (GAO), a nonpartisan government agency, completed two reports related to Central States Pension Fund. The first report reviews the factors that contributed to the Pension Fund’s current financial condition, as well as its investment policies and investment performance. The second report reviews the U.S. Department of Labor’s (DOL) activities under a 1982 Consent Decree between the DOL and the Pension Fund. These thorough reviews were conducted over a more than two-year period.

 
 

The GAO reports confirm the following:

  • The Pension Fund’s investment returns and expenses are in line with other large institutional investors.

  • The Pension Fund’s investment fees were 9% below the median for other large and demographically similar multiemployer pension funds during the 2000-2014 period.

  • The Pension Fund’s administrative expenses were 16% below the median for large defined- benefit multiemployer plans.

  • The DOL has performed its oversight duties under the Consent Decree. In the time since the Consent Decree was established, the DOL has not found the Pension Fund in violation of either the Consent Decree or the Employee Retirement Income Security Act (ERISA).

  • Beyond the DOL’s oversight role, it has collaborated with the Pension Fund and others on steps to improve the plan’s financial condition, including working with the Pension Fund on its application under the Multiemployer Pension Reform Act of 2014.

  • Both reports were submitted to and reviewed by the Department of Labor, the Department of Treasury and the Pension Benefit Guaranty Corporation (PBGC), which provided only technical comments to the reports.

  • As a result of these findings, the GAO made no recommendations to Congress.

The reports also confirm the perfect storm of factors that led the Pension Fund to face insolvency by 2025, including deregulation of the trucking industry, which caused thousands of employers to go out of business; a dramatic loss of active participants and increase in retirees; and two devastating market downturns since 2000.

Thanks to the PBGC’s approval of the Pension Fund’s application for Special Financial Assistance under the American Rescue Plan Act of 2021, Central States will avoid insolvency and make a full recovery – reaching full funding over time.