Defined Benefit Plans: Proposed Plan Buyouts by Financial Firms Pose Potential Risks and Benefits

United States. Government Accountability Office.

United States. Government Accountability Office.

关键词: Government accountability -- United States.;    retirement security;    defined benefit plans;    letter report;   

RP-ID  :  GAO-09-207
RP-ID  :  287263

美国|英语

来源: UNT Digital Library

【 摘 要 】

A letter report issued by the Government Accountability Office with an abstract that begins "Some U.S. financial and pension consulting firms have recently proposed alternatives to terminating a defined benefit (DB) pension plan and contracting with insurance companies to pay promised benefits. In their proposals, a plan sponsor would typically transfer the assets and liabilities of a hard-frozen DB plan--one in which all participant benefit accruals have ceased--along with additional money, to a financial entity, which would become the new sponsor. Such buyouts would have implications for participants, plan sponsors, and the Pension Benefit Guaranty Corporation (PBGC), the federal agency that insures private DB plans. This report addresses the following questions: (1) What is the basic model of proposed sales of frozen DB plans to third-party financial firms and how does it compare with a standard plan termination? (2) What are the potential risks and benefits of plan buyouts for participants, PBGC, plan sponsors, and other stakeholders? To address these questions, GAO reviewed proposed models for plan buyouts and analyzed regulatory and statutory issues associated with terminations and buyouts. GAO also interviewed labor and pension advocacy groups, pension regulatory agencies, and pension experts."