WASHINGTON – Sen. Chuck Grassley of Iowa today said he welcomes a Government Accountability Office (GAO) review of the Department of Labor’s oversight of the financially troubled Central States pension fund.  The GAO agreed to conduct the review at Grassley’s request.  The Finance Committee, where Grassley is a senior member and former chairman, held a hearing this morning on troubled multiemployer pension plans including Central States.  A widow beneficiary from Ohio thanked Grassley for his help on the issue in her testimony before the committee. 
 
“The Government Accountability Office conducts nonpartisan oversight at the request of Congress,” Grassley said.  “It’s good news that the GAO agreed to review how the Department of Labor handled its role with the Central States fund.  Plan beneficiaries deserve to have a better understanding of what led to the financial failings of Central States and ultimately put their retirement at risk.  Congress needs to have a better understanding of what happened with the Department of Labor’s oversight of this pension plan so that any corrective actions, if necessary, can be taken.” 
 
In his letter to the GAO, Grassley said that for more than three decades, Central States has operated under a federal court-ordered consent decree obtained by the Labor Department following its investigation that found gross mismanagement and self-dealing by fund managers.  Among other things, the consent decree granted the Labor Department considerable oversight authority on the selection of independent fund managers, as well as to changes in investment strategies, among other oversight powers.  Grassley wrote that he is unaware of any GAO review of the Labor Department’s role in overseeing the pension fund since 1985.  
 
Grassley wrote, “Concerns over the solvency of these plans are heightened due to large fiscal deficits currently facing the Pension Benefit Guaranty Corporation’s (PBGC) multiemployer guarantee program.  As a result, should Central States, or another large plan become insolvent, PBGC would likely not have enough funds to make full guarantee payments to plan beneficiaries who would see much of their retirement savings wiped out.”  He said “the time is ripe for GAO to update Congress on DOL’s oversight of Central States.”
 
Grassley’s letter to the GAO is available here.   The GAO’s letter confirming that it will conduct the review is available here.

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