PBGC Processing of Terminated United Airlines Pension Plans Was Seriously Deficient (EVAL-2012-5/PA-10-72), issued November 30, 2011

This report describes findings identified during our evaluation of PBGC's actions in terminating certain United Airlines defined pension plans. We initiated this evaluation in response to a request from then Chairman George Miller of the House Committee on Education and Labor. Our objectives were to determine (1) whether the United Airlines plan asset audits and participant data audits met applicable professional standards; (2) whether the audits were conducted in accordance with PBGC's established protocols; and (3) the effectiveness of PBGC's oversight and quality control processes for the subject audits.

Our review identified serious flaws in each of the original plan asset audits intended to establish the fair market value of United Airlines plans assets. The review showed that each of the audits failed to meet applicable professional standards, contained myriad obvious errors and omissions as well as unsupported conclusions. The attached report also describes concerns with PBGC's participant data, source document, and electronic source document audits for the terminated United Airlines plans. In addition, other findings address the systemic nature of errors and omissions in PBGC's audit s of terminated pension plans. In responding to the report, PBGC noted general agreement with the report's findings and recommendations.