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CCH® PENSION — 08/13/10

Miller urges new PBGC head to address Inspector General findings regarding UAL plan termination

Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, called on Joshua Gotbaum, the new director of the PBGC, to immediately address serious concerns raised by the Agency's inspector general that an auditing contractor hired by the PBGC in relation to the termination of United Airlines' (UAL) pension plan terminations failed to exercise due diligence and that the PBGC failed to properly oversee the contractor.

Miller had asked the Office of Inspector General (OIG) to look into the termination of the United Airlines plans in 2009. In its report, the OIG concluded that the PBGC and the contractor performing the plan asset audits did not exercise due professional care and that "the issues surrounding the inadequate plan asset audits were so significant that additional, more detailed evaluation is warranted."

"Plan participants often face substantial hardship when employers fail to live up to their promises and terminate their pension plans. It is critical that PBGC exercise due professional care in administering a terminated plan," Miller said in a July 23, 2010 letter to the new PBGC director. "I urge you to work with the OIG to determine the scope and severity of the problem and to properly hold accountable any contractor (including suspension of such contractor) or employee who failed to execute their duties in the manner consistent with the requirements of the law," Miller said.

Source: House Committee on Education and Labor news release, July 23, 2010.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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