GAO Will Probe Central States Pension

The Government Accountability office has agreed to probe the finances of the Central States Pension Fund, per the request last week of 51 Congressional Democrats.

Central States was the first multiemployer pension plan to submit a proposal to the Treasury to cut member benefits.

Lawmakers want to know if any wrongdoing was the cause of the fund’s insolvency.

From Bloomberg BNA:

The lawmakers asked the GAO to probe the fund’s investment decisions going back to 1982, when the fund came under the supervision of a court-ordered consent decree.

Charles Jeszeck, the GAO’s director of education, workforce, and income security, told Bloomberg BNA June 28 that his agency expects to make staff assignments and begin work on the project soon.

[…]

The GAO is already investigating the Labor Department’s supervision of the fund in response to a request by Sen. Charles Grassley (R-Iowa).Kaptur said in a news release announcing the request that she wanted the GAO to “get to the bottom of” allegations that the fund had questionable investments in “Iraqi banks in 2008, during a full-scale war” and in “unstable Russian banks, when the economy there is in shambles.” She also said she wants the GAO to look into the fund’s $1.4 billion investment in risky mortgage-backed bonds “in the middle of the housing meltdown.”

Thomas C. Nyhan, the executive director and general counsel of the Central States fund, told Bloomberg BNA at the time of the lawmakers’ request to the GAO that while he didn’t see any reason for an investigation of the fund, he welcomed it as means to end “all of the groundless speculation.”