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089641 1 (1975-02-07)

handle is hein.gao/gaobacvro0001 and id is 1 raw text is: o. UNITED STATES GENERAL ACCOUNTING OFFICE REGIONAL OFFICE ou~ ROOM 403, U.S. CUSTOMHOUSE. 610 SOUTH CANAL STREET CHICAGO, ILLINOls 60607 FEB 7 1975 Commander Defense Contract Administration Services Region (DCASR), Chicago O'Hare International Airport P.O. Box 66475 Chicago, Illinois 60666 Dear Commander: We are writing at this time to apprise you of our observations and status of matters within your responsibilities as disclosed- during our review of pension costs at the Magnavox Company, Fort Wayne, Indiana. We have completed work at .the contractor's plant, and are presently waiting for certain data to be compiled by the contractor's. consulting actuary, Kwasha-Lipton, Englewood Cliffs, New Jersey, before we draw final conclusions. The Magnavox Government and Industrial (G&I) Group manufactures defense products in Fort Wayne, Indiana. Until 1971, the Group also maintained substantial defense production at a plant in Urbana, Illinois. As of December 31, 1973, three trusteed pension plans covered employees involved in Government work at these locations. One is a company-wide plan for salaried employees who have vested rights after 10 years of service at age 35. The other two plans are for hourly employees working in Fort Wayne who have vested rights after 15 years of service at age 40. Our review disclosed that (1) the Government may be entitled to certain credits for abnormal employee terminations experienced by Magnavox during the period from 1969 to 1973, and (2) the contractor did not make timely trust fund contributions for two quarterly peri- ods in 1974. These matters are discussed below. Potential adjustment for abnormal number of employee terminations Magnavox experienced a significant number of employee termina- tions at the Urbana and Fort Wayne plants during the years 1969 through 1973, as shown in Appendix I. The number of terminations during this period indicated that many employees may not have vested in the company pension programs. ,,9.4 FOS(o9) j

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