Sens. Klobuchar, Franken Announce Report Showing Pension Oversight Corporation Seriously Erred with Nat'l Steel Pension Plans
Press Release
Findings from a new investigation requested by U.S. Sens. Amy Klobuchar and Al Franken (D-Minn.) in August 2009 show that the Pension Benefit Guaranty Corporation (PBGC) made significant errors when valuing the pension plans benefitting National Steel Company employees in the Iron Range.
After the PBGC assumed responsibility for National Steel Company's pension plans, it hired an outside contractor to assess the value of the plans. The PBGC inspector general, who conducted the investigation, said that the audit performed by the contractor "suffered from multiple and serious deviations from government auditing standards" and that "Pension Benefit Guaranty Corporation's oversight of the contractor was inadequate."
"This was a failure in oversight and the Pension Benefit Guaranty Corporation owes these Iron Rangers answers," said Sen. Klobuchar. "Workers deserve to know that the benefits they earned are being protected. This report shows that changes are needed to ensure that benefit plans held by the Pension Benefit Guaranty Corporation are managed according to the highest standards."
"The PBGC seriously failed these Iron Rangers," said Sen. Franken. "The PBGC is supposed to step in for pensioners when companies can no longer pay out the benefits employees are entitled to, and this report shows that clearly didn't happen in this case. We need to be able to count on the PBGC and feel confident that it's doing its job with competence and integrity."
In response, PBGC officials agreed with the inspector general's findings and said they would both change their organization's internal operating policies and hire an outside firm to reassess the value of National Steel Company pensions. While the PBGC admitted to serious errors, it also made clear that it has not made a determination as to whether beneficiaries will receive increased benefits.
The senators' request for an investigation was also made with former Rep. Jim Oberstar (D-Minn.). You can read the full findings of the investigation here.
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