PBGC - Office of Inspector General

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PBGC Lawfully Terminated the National Steel Plans, but Accepted Poor Quality Work from Contractors (EVAL 2014-01/PA-09-66-2), issued October 23, 2013

In response to a Congressional request to review the Pension Benefit Guaranty Corporation (PBGC) actions regarding National Steel pension plans, we found that PBGC complied with its statute when making termination and benefit decisions. Specifically, PBGC acted within its authority to terminate the plan and select the termination date. Also, PBGC did not violate the law when it made certain decisions that reduced pension benefits. The report also explains the different treatment of shutdown benefits between National Steel participants and those in the LTV pension plans.

In contrast, PBGC's efforts to identify valid and accurate participant information necessary for individual benefit calculations were unreliable for the seven terminated National Steel pension plans. In 2004 and 2005, PBGC's contractor performed and PBGC accepted seven source document audits and seven participant data audits for National Steel plans and relied on them to produce valuations of the terminated pension plans and individual participant benefit calculations. However, these fourteen audits for the National Steel plans failed to meet applicable professional standards and PBGC protocols.

As a result of OIG's previous reviews in 2011 of National Steel and United Airlines pension plans, the Corporation has begun to address serious weaknesses in its benefit operations. Therefore, we are not making any new recommendations to PBGC as a result of our report on the processing of National Steel Plans' terminations.

Click here for the full report.

Pension Benefits Guarantee Corporation
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