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June 20 — Fifty-one Democratic lawmakers have asked the GAO to investigate the financially troubled Central States pension fund's investment decisions.
Ten Democrats in the Senate and 41 in the House requested on June 20 that the Government Accountability Office review the Central States, Southeast and Southwest Areas Pension Fund's investment decisions going back to 1982, when the fund came under the supervision of a court-ordered consent decree.
The requests seek to determine if there was any wrongdoing that led to the fund's severe financial woes. The fund has projected it will be insolvent in 10 years or less.
The request, which the GAO is expected to agree to, comes about six weeks after the Treasury Department rejected the fund's application to cut participants' benefits in an attempt to avoid insolvency.
The GAO is already investigating the Labor Department's supervision of the fund in response to Sen. Charles Grassley's (R-Iowa) request.
The request was spurred by Ohio congresswomen Marcy Kaptur (D-Ohio), who introduced legislation last year to address the fund's anticipated future insolvency. In March, Kaptur, along with Rep. Rick Nolan (D-Minn.), called for an investigation into the fund's finances.
Thomas C. Nyhan, the executive director and general counsel of the Central States fund, told Bloomberg BNA June 20 that, “While we see no reason for the investigation, we welcome it.”
Nyhan said the fund was “confident the GAO will conclude there was absolutely no wrongdoing at any time in connection with the Fund's investment practices and finally put to rest all of this groundless speculation. We will cooperate fully in any GAO review.”
He said that every year the fund “undergoes a full scope audit by an independent auditing firm, and files exhaustive, public financial reports with the U.S. Department of Labor.”
Furthermore, Nyhan said, due to the consent decree, an independent special counsel attends all of the fund's board meetings, has access to all of the fund's books and records, and submits quarterly reports to a federal judge. The fund publishes these on its website as they are issued, he said.
The fund “is likely one of the most thoroughly scrutinized and transparent private entities in the country,” Nyhan said.
Nyhan said the fund's financial woes stem from a long line of occurrences, including withdrawals from the fund of many contributing employers due to industry deregulation, several periods of severe stock market drops, the withdrawal from the fund by United Parcel Service and the massive ongoing benefit payments the fund must make each year.
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