CPAs Find Problems at PBGC

Submitted by rkoreto on Tue, 11/22/2011 - 14:52

According to a Nov. 16 article in the New York Times, the Pension Benefit Guaranty Corporation (PBGC), which takes over failed pension plans to continue paying retirees, made errors in calculating benefits. As a result, some retirees may have been getting too much and others may have been getting too little.

The Times quoted Joshua Gotbaum, the agency’s executive director, as saying that those who received too little would get back payments with interest. Retirees who received too much would see reductions in future checks to make up the difference, but would not be charged interest.

Blame has been fixed on unqualified outside vendors who reviewed pension plans the PBGC took over, and poor supervision of those contractors, continued the article.
 
The PBGC’s inspector general contracted with Clifton Gunderson LLP to conduct an audit and issued a report on Nov. 14. The accounting firm noted in its independent auditor’s report that the “PBGC did not have effective internal control over financial reporting (including safeguarding assets) and compliance with laws and regulations and its operations as of September 30, 2011.” The firm also found “reportable noncompliance with laws and regulations we tested.”
 
In commentary on the PBGC website, Gotbaum noted that the PBGC “did a poor job of accounting for all the assets” and continued that the PBGC would make changes “to prevent similar mistakes in the future.”
 

 

Bookmark/Search this post with:

The New York State Society of Certified Public Accountants (NYSSCPA) encourages you to add a comment to this discussion.  You may not post any unlawful, threatening, defamatory, obscene, pornographic or other material that would violate the law.  Please note that NYSSCPA reviews all comments prior to posting. NYSSCPA may edit comments for clarity or to keep out questionable or off-topic material.  All comments should be relevant to the post and remain respectful of other authors. To view the full “NYSSCPA Blog Terms and Conditions,” click here.