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HRD-92-28R 1 (1992-03-23)

handle is hein.gao/gaobacjzn0001 and id is 1 raw text is: G United States General Accounting Office Washington, D.C. 2058 Human Resources Division March 23, 1992I162 146226 The Honorable J.J. Pickle Chairman, Subcommittee on Oversight Committee on Ways and Means House of Representatives Dear Mr. Chairman: This responds to your request for information about the accuracy of premiums paid by pension plans to the Pension Benefit Guaranty Corporation (PBGC). On December 13, 1991, we briefed your office on the General Accounting Office's premium-related work. Our premium-accuracy work is part of a series of studies we are performing on PBGC's premium collection program. The Employee Retirement Income Security Act of 1974 (ERISA), as amended, requires defined benefit pension plans to pay annual premiums to PBGC which insures the benefits of plan participants. Plans pay a fixed premium for each participant. Plans may also pay a variable premium if they are underfunded--their current liabilities for immediate and deferred nonforfeitable benefits exceed the actuarial value of their assets. We assessed the accuracy of the 1990 plan year premiums paid by 24 single-employer pension plans located in the Dallas/Fort Worth area. We calculated each plan's premium, using PBGC's rules and information provided by the plans. Our plan selection included 13 that paid both fixed and variable premiums and 11 that paid a fixed premium only; it excluded plans (1) with less than 25 participants, (2) with plan year starting dates other than January 1, 1990, or (3) in litigation. The results of our work are not projectable. (See enclosure I for details about our scope and methodology.) RESULTS OF SMALL SAMPLE ANALYSES Though the error rate was high--13 of the 24 plans made premium calculation errors--most errors were small. About GAO/HRD-92-28R Premium Accuracy RESTRICTED--Not to be released outside the General Accounting Office unless specifically approved by the Office of Congressional Relations.

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