Report No.: GAO/OCG-93-19TR Date: December 1992
_______________________________________________________________________________
Author: United States General Accounting Office
Office of the Comptroller General
Addressee: Transition Series
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CONTENTS
Labor Issues
Improving the Skills of American Workers
- Helping Students Transition From School to Work
- Providing Employment and Training Assistance to Economically
Disadvantaged Workers
- Assisting Dislocated Workers
Assessing the Adequacy of the Unemployment Insurance System
Improving the Occupational Safety and Health Administration's (OSHA)
Enforcement Efforts
Addressing Financial Concerns Relating to the Pension Benefit Guaranty
Corporation (PBGC)
Related GAO Products
- Improving the Skills of American Workers
- Assessing the Adequacy of the Unemployment Insurance System
- Improving OSHA's Enforcement Efforts
- Addressing Financial Concerns Relating to the Pension Benefit Guaranty
Corporation (PBGC)
- General Labor Issues
Transition Series
- Economics
- Management
- Program Areas
Office of the Comptroller General
Washington, DC 20548
December 1992
The Speaker of the House of Representatives
The Majority Leader of the Senate
In response to your request, this transition series report discusses major
policy, management, and program issues facing the Congress and the new
administration in the area of labor. These issues include (1) improving the
skills of America's workers by addressing the school-to-work transition of
youth, helping the economically disadvantaged obtain training, and
facilitating the reemployment of dislocated workers; (2) assessing the ability
of the unemployment insurance system to meet its objectives; (3) improving the
Occupational Safety and Health Administration's enforcement efforts; and (4)
addressing financial and management concerns relating to the Pension Benefit
Guaranty Corporation.
As part of our high-risk series on program areas vulnerable to waste, fraud,
abuse, and mismanagement, we are issuing a related report, _Pension Benefit
Guaranty Corporation_ (GAO/HR-93-5).
The GAO products upon which this transition series report is based are listed
at the end of the report.
We are also sending copies of this report to the President-elect, the
Republican leadership of the Congress, the appropriate congressional
committees, and the Secretaries-designate of Labor and Education.
The American workplace is changing in response to international competition.
Economic change, coupled with the adoption of new technologies and the
restructuring of work, is resulting in worker dislocation and shifts in the
skill demands for new workers. Increasingly, companies are looking for workers
with greater technical skills and workers who are versatile and able to adapt
to changing conditions--by learning new skills, changing their roles in the
workplace, working in teams, sharing management responsibilities, and solving
problems. Labor needs to help current and future workers adapt to this
changing workplace to foster the United States' competitive position in world
markets.
The challenges facing Labor are great. First, many of the nation's youth are
leaving school poorly prepared for this new work world. We estimate that about
one in three youth aged 16 to 24 will not have the skills needed to meet
employer requirements for entry-level, semiskilled, high-wage occupations.
Second, the nation already has a large group of the economically
disadvantaged--between 10 and 39 million--who lack necessary skills. Third,
900,000 or more workers annually are at least temporarily dislocated and often
need retraining or help finding a new job.
To address these needs, the Congress and the new Secretary must deal with an
uncoordinated system of 125 employment training programs spread across 14
departments and agencies with over $16 billion in annual funding. Many of
these programs tend to suffer from inadequate federal and state oversight,
inefficient service to those in need, improper program expenditures and, in
some programs, questionable effectiveness.
In addition, Labor needs to ensure that workers have access to unemployment
insurance benefits when they need them and to the pensions due them when they
retire. The ability of the Unemployment Insurance system to provide income
assistance to the unemployed and help stabilize the economy during recessions
has eroded. The aggregate liability in the 85,000 plans PBGC insures is over
$900 billion. Collectively, these insured plans have over $1.3 trillion in
assets. However, about $40 billion of the liabilities do not have matching
assets, and at least $13 billion of this amount is in plans of financially
troubled companies. PBGC has a current deficit of $2.3 billion, and PBGC's
most pessimistic projection is that the deficit could reach $17.9 billion by
2001.
In addressing these issues, the Congress and Labor need to make sure that
employers do not take shortcuts on workers' health and safety in misguided
efforts to save money. Annually, about 1.7 million workers are disabled by
on-the-job injuries, and about 110,000 die from work-related causes. A total
of 2,000 inspectors safeguard 88 million workers in the nation's 6 million
worksites. OSHA, together with its state counterparts, must find innovative
solutions to ensure safe and healthful workplaces.
IMPROVING THE SKILLS OF AMERICAN WORKERS
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The United States' ability to compete in the international marketplace depends
to a great extent on the skills of its workers. Federal programs for preparing
the nation's youth for the workplace and for upgrading the skills of
economically disadvantaged workers and dislocated workers are fragmented. The
125 federal employment training programs for adults and out-of-school
youth--with funding of $16.3 billion in fiscal year 1991--often operate in
isolation and create a difficult maze for service providers and the
unemployed. Many of these programs also tend to suffer from inadequate federal
and state oversight, inefficient service delivery, improper program
expenditures and, in some programs, questionable effectiveness.
The Congress and the new administration need to focus on creating a more
coherent, effective, and accountable employment training system. Department of
Labor programs that are important to this effort cover at least three areas:
-- improving the school-to-work transition for youth,
-- helping the economically disadvantaged get the necessary skills to enter
the mainstream work force, and
-- facilitating the reemployment of workers dislocated by economic adjustments
and policy changes.
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HELPING STUDENTS TRANSITION FROM SCHOOL TO WORK
Many of America's youth have been leaving high school poorly prepared for the
world of work. Given the profound changes taking place in workplaces in the
United States and abroad, they may be even less prepared for the workplace of
the future. In contrast to the United States' lack of policy on youth, this
nation's principal foreign competitors emphasize that all youth be prepared
for work and be ready to adapt to workplace changes.
U.S. school systems have a curriculum geared to serving college-bound youth;
yet only 30 percent of U.S. graduates go on to a 4-year college. Those not
heading for college often are carried along in undemanding or poor quality
programs that frequently do not give the students skills employers need. In
addition, many students drop out of school and do not graduate.
We estimate that about one in three youth aged 16 to 24 will not have the
skills needed to meet employer requirements for entry-level, semiskilled,
high-wage occupations--5.5 million high school dropouts and 3.8 million youth
who lack high school competencies. In the past, these youth--even though they
had few skills and limited language and computation skills--could eventually
get entry-level positions in semiskilled, higher-wage occupations. Now, these
kinds of jobs are increasingly being phased out; getting jobs with high-wage
potential requires high skills. In addition, employers want employees who are
versatile and able to adapt to changing conditions not only by learning new
skills, but also by changing their roles in the workplace--by working in
teams, sharing management responsibilities, and solving problems.
The challenge facing the Congress and the incoming administration is how to
adapt the nation's education and training systems to more effectively prepare
youth for the world of work. While the Department of Education is responsible
for elementary and secondary education, overlap exists with the Department of
Labor in secondary and postsecondary skill training. (For issues relating to
the Department of Education, see the transition series report, _Education
Issues_ GAO/OCG-93-18TR, Dec. 1992.) The magnitude of the problem requires
strong federal leadership in many areas, but we see a need for Labor efforts,
combined with those of Education and the Congress, to focus, in particular, on
-- fostering the development of closer school-employer linkages to provide
youth with structured work experience, instructional programs that meet
employer needs, and preparation for occupations in demand and
-- developing national data and conducting evaluations to identify and promote
effective transition strategies.
On the basis of our studies of foreign approaches for improving the
school-to-work transition, we suggested expansion of school-employer linkages,
particularly apprenticeship-type programs. However, specific foreign
approaches may not be readily transferable because they have evolved in
different contexts. For example, about two-thirds of German youth are served
by the German apprenticeship system, while apprenticeships in the United
States are primarily programs for those already working--the average age of
U.S. apprentices is 29. In addition, the U.S. apprenticeship system is
primarily limited to the building trades and some metal trades occupations,
while the German system involves 380 occupational areas covering essentially
all nonprofessional career options.
Modifying the nation's apprenticeship system to serve large numbers of youth
likely could be difficult, yet adding apprenticeship-type programs to the
educational system shows promise. Our studies of apprenticeship-type programs,
which have strong links to employers, have identified three basic types of
programs. For example, high-quality cooperative education is one such program
that provides high school juniors and seniors with work experience and
on-the-job training, together with job-related classroom instruction. Students
learn about the working world, acquire job skills, and often are offered
permanent employment with their co-op employer. Similarly, school-to-
pprenticeship programs offer high school seniors structured skill training,
but they have the additional benefit of being tied into the formal
apprenticeship system. High school academy programs operate as
schools-within-schools and provide training in a series of occupations related
to a single industry. For example, the Academy of Applied Electrical Science,
housed in Philadelphia's Thomas Edison High School, trains youth for careers
in the electrical trades. Programs are developed with extensive input from
employers and often involve practical "hands on" experience.
The Congress together with the new administration from both the Departments of
Labor and Education could build on promising approaches that already exist in
the United States--such as cooperative education, youth apprenticeship, and
high school academies--rather than create a totally new program or attempt to
impose a single, foreign-derived solution. Apprenticeship-type training is,
however, only one part of the strategy. The Congress and the new
administration need to address other elements, such as career education and
competency-based skill standards, to develop an integrated, comprehensive
youth school-to-work transition strategy. To that end, we are conducting a
study that will describe model comprehensive school-to-work transition
strategies.
Some of America's foreign competitors, notably Germany, maintain quality
occupational training by using competency testing and certifying that trainees
meet national standards. Employers view certificates as evidence that trainees
have achieved particular skill levels. In the United States, certificates
often certify course completion and not necessarily the attainment of skills.
It is now recognized that the United States needs to move toward the use of
competency-based skill standards and certification. The Departments of Labor
and Education have started such efforts. We are currently studying the
development and use of occupational skill standards and certification systems.
We are looking at the barriers that existing systems have had to overcome, how
federal efforts could facilitate the development and adoption of new systems,
and how the two Departments are working together in their efforts to foster
the development and use of skill standards.
Finally, many students, their parents, and employers are unaware of the
potential benefits of alternative approaches to the transition to work.
Because high school cooperative education, like vocational education, has a
reputation as a "dumping ground" for academically weak students, parents,
students, and teachers often avoid these programs. Yet we found high-quality
programs at 15 sites in eight states. The actual extent of high-quality
programs is unknown because, in part, the Department of Education no longer
collects information on them. The challenge is to find ways to evaluate
existing programs, disseminate information on promising approaches, and,
through technical assistance or other means, facilitate their adoption.
===============================================================================
PROVIDING EMPLOYMENT AND TRAINING ASSISTANCE TO ECONOMICALLY DISADVANTAGED
WORKERS
A total of 65 programs provide employment training assistance to the
economically disadvantaged. The Job Training Partnership Act (JTPA), enacted
in 1982 and amended in 1992, is the federal government's principal employment
training program. JTPA, administered by the Department of Labor, is a highly
decentralized program that has a $4 billion annual budget and encompasses many
programs, including the Job Corps, dislocated worker programs, and summer
youth programs. Most JTPA participants receive job training services through
programs run by the 56 states and territories and over 600 local programs. In
addition to Labor, other departments are major players in providing employment
training opportunities. The Job Opportunities and Basic Skills program, which
is administered by the Department of Health and Human Services, funds $1
billion in employment training programs, while Education's Pell grant program
makes available over $2 billion in funding for postsecondary training.
The Congress and the new administration can make these programs work better to
improve the delivery of employment and training services by ensuring the
effective implementation of the 1992 amendments to JTPA, integrating services
provided by numerous programs, evaluating intervention strategies, and seeking
more effective approaches.
Our work on JTPA has revealed many shortcomings in program operations that we
noted in our 1988 transition report; many were addressed by amendments to the
program that were signed into law in September 1992. The issues addressed by
the legislation include the lack of targeting of the program's limited
resources, abuses in on-the-job training contracts, weak program evaluation
and oversight, limited data collection, and disparities in the services
provided to minorities and women. For the most part, the amendments take
effect July 1, 1993. The new Secretary of Labor will need to oversee the
initiation of these changes and ensure that they are fully implemented and
adequately monitored.
Federal efforts to upgrade the skills of economically disadvantaged workers
are carried out through 65 different programs. In addition to JTPA, other
programs targeted on the economically disadvantaged are administered by 12
federal departments and independent agencies. These myriad programs do not
function as a comprehensive, cohesive system, but often operate in isolation.
It is time to look at how the federal programs could work together as a system
to more effectively provide employment training assistance to the economically
disadvantaged. A key institution is the Employment Service, whose performance
we have found to be uneven, but whose 1,700 offices nationwide could play a
central role in making the programs operate as a system. Our ongoing work will
provide options for the new administration and the Congress to consider as
they look across the federal training programs and search for ways to enhance
their coordination, cooperation, and integration to ensure that their services
more fully benefit the economically disadvantaged.
JTPA is viewed as a relatively successful program because most of those who
enroll in the program get jobs. However, we do not know how well these
individuals would have done without JTPA assistance, or the long-term benefits
of such training. Initial results from a study of JTPA's effectiveness suggest
that, on a short-term basis, the program may not be effective for youth and
may be only marginally effective for adults. [ Footnote 1: _The National
JTPA Study: Title IIA Impacts on Earnings and Employment at 18 Months_,
Executive Summary, Abt Associates Inc., May 1992. ]
As long-term results from the evaluation are reported and as the recent
legislative changes to JTPA are implemented, the Congress and the new
administration should (1) monitor their results, (2) examine the
appropriateness of current training interventions, and (3) consider pursuing
alternative approaches to achieving more effective outcomes. These actions do
not necessarily mean designing new programs, but rather analyzing the reasons
for the results so that corrective actions can be taken. As we have
recommended in the past, Labor has recently made extensive changes to its data
collection on program participants, services provided, and outcomes achieved.
These changes will enhance Labor's ability to evaluate the program's
effectiveness and identify ways to improve it.
As the American economy continually adjusts to changing product demand and
competitive conditions, different sectors of the economy grow while others
decline, resulting in the dislocation of an average of 900,000 workers
annually over the last 10 years. Progress on the North America Free Trade
Agreement, the recession, and the restructuring that many companies are
undertaking to streamline their organizations have heightened concerns about
the adequacy of dislocated worker programs.
Two programs have been established specifically to assist dislocated workers
in their transition to reemployment--the Trade Adjustment Assistance and the
Economic Dislocation and Worker Adjustment Assistance programs. The Trade
Adjustment Assistance (TAA) program is an entitlement that assists workers who
lose their jobs because of increased imports. The Economic Dislocation and
Worker Adjustment Assistance program (EDWAA) provides assistance to all
workers regardless of the reason for the dislocation. Together the programs
served about 325,000 workers at a cost of $540 million in 1990. The two
programs provide similar reemployment services--skill training and job search
assistance--except that the program for import-impacted workers has an
extended income support feature.
Helping dislocated workers who need assistance to upgrade their skills so that
they can find new jobs should be a key part of any strategy considered by the
Congress and the new administration for strengthening the competitive position
of American business in the international marketplace. On the basis of our
work on the two primary assistance programs for dislocated workers, we believe
that the Congress and the new administration need to
-- streamline the process for determining eligibility for the Trade Adjustment
Assistance program to ensure access to benefits;
-- ensure that projects provide a comprehensive mix of services to meet the
varied needs of individual dislocated workers, coordinate the services
provided by the programs, and provide the assistance in a timely manner;
and
-- develop adequate data-gathering systems that track participant progress and
monitor program performance, and to ensure that programs are effective,
conduct evaluations that determine how well the affected individuals would
have done without the programs.
Our assessment of the Trade Adjustment Assistance certification process showed
that most of Labor's investigations to determine if imports had contributed to
the loss of employment were flawed, thus jeopardizing workers' access to
benefits. To be eligible for the TAA program, a worker must be a member of a
group of workers that Labor certifies as import impacted. We found that 63
percent of the investigations for petitions filed in 1990 and 1991 had (1)
incomplete, inaccurate, or unsubstantiated data collected from the company;
(2) incorrect or omitted analyses of trade statistics; or (3) inadequate or
omitted customer surveys. Many of the flaws were the result of the pressure to
complete the investigations in 60 days, pressing investigators to take
shortcuts in collecting and analyzing data. We have suggested that the
Congress consider alternatives for streamlining the process or changing some
of the requirements that workers need to satisfy to be certified as import
impacted.
We noted in our 1988 transition report that successful dislocated worker
assistance projects had certain similar characteristics, such as tailoring
assistance and reaching workers at or near the time of layoff. Our recent work
has raised questions about the assistance efforts provided under the Trade
Adjustment Assistance and the Economic Dislocation and Worker Adjustment
Assistance programs that the Congress and the new administration need to
address:
-- The mix of services offered by the two dislocated worker assistance
programs has been limited in some instances; as a result, the services
participants received may not have been tailored to their specific needs.
For example, the Trade Adjustment Assistance program offers participants
classroom training in a variety of occupations, but generally it does not
offer the option of on-the-job training. In contrast, in some EDWAA
projects, participants may be offered on-the-job training positions, but
nothing in the way of basic skills training.
-- The two programs generally are slow in reaching workers. For example, in
two of the three states we studied, less than 10 percent of workers
received assistance from TAA within 15 weeks of their layoff; in each of
the three states, EDWAA reached less than 60 percent of workers within 15
weeks.
-- In addition, improved coordination has the potential to make services more
widely available. Improved coordination between the programs could mean
that workers awaiting Labor's certification as trade-impacted could begin
receiving assistance from EDWAA.
We found that neither the Trade Adjustment Assistance nor the Economic
Dislocation and Worker Adjustment Assistance program gather sufficient
information to adequately track participant progress, monitor program
performance, or evaluate their effect. Labor recently adopted new reporting
requirements for the EDWAA program, but these have not been extended to TAA.
For the Congress and the new administration to effectively evaluate the
performance of both these programs, data on TAA participants, services, and
outcomes will also be needed. In addition, an evaluation of what would have
happened to participants in the absence of these programs needs to be
conducted.
ASSESSING THE ADEQUACY OF THE UNEMPLOYMENT INSURANCE SYSTEM
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The Unemployment Insurance (UI) system is this country's primary means of
providing income assistance to unemployed workers. Through a combined
federal-state partnership, the system provides benefits to unemployed workers
who are ready, willing, and able to work and who meet their state's
eligibility requirements. Ninety-seven percent of the wage and salary workers
in the United States are covered under this program. Its principal objectives
are to
1) temporarily replace a portion of the lost wages of workers who are
unemployed and (2) help stabilize the economy during recessions by providing
the unemployed with a portion of their former purchasing power.
During fiscal year 1991, over $24 billion in benefits was paid to over 10
million unemployed workers. Some workers received extended benefits for 13
weeks more than the usual 26 weeks, because of the long period of high
unemployment in their states. In addition, because the extended benefits
program was not activated in many states, a temporary, federally funded
emergency program was enacted.
The ability of the Unemployment Insurance program to meet its objectives of
temporary and partial wage replacement and economic stabilization has been
eroding. In 1952, nearly 55 percent of the unemployed received UI benefits,
but that percentage decreased to 29 percent in 1984 and remained at
historically low levels through the 1980s. The percentage of the unemployed
receiving benefits, which usually rises during recessions, reached 40 percent
in 1991, still some 10 percentage points lower than in most recent recessions.
Also, if the UI recipiency rate and benefit payments were at the same level as
during the 1974-75 period, about $20 billion more in UI benefits would have
been available to help stabilize the economy and maintain a portion of the
incomes of the unemployed. We are conducting a study to determine factors
associated with the declining proportion of the unemployed receiving benefits
and the effects of this decline on the system's ability to meet its
objectives.
As the economy begins to pull out of recession, the states will need to
rebuild their reserves to levels adequate to withstand future recessions. This
is an appropriate time for the Congress and the new administration to
carefully assess the Unemployment Insurance system's ability to meet its
objectives of stabilizing the economy and providing the unemployed with
partial wage replacement and to evaluate whether system modification is needed
to improve its ability to meet these objectives.
IMPROVING THE OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION'S (OSHA)
ENFORCEMENT EFFORTS
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The Occupational Safety and Health Administration (OSHA) and states that
operate workplace safety and health programs under its approval cover about 6
million worksites and 88 million employees. OSHA and the state agencies, armed
with a total of 2,000 inspectors, must find innovative solutions to ensure
that employees' workplaces are safe and healthful. Improvement is clearly
needed--an estimated 1.7 million disabling on-the-job injuries occur each year
and 390,000 new cases of occupational diseases are identified annually. In
addition, an estimated 10,500 workers die each year from on-the-job injuries,
and another 100,000 workers lose their lives to work-related diseases.
The Congress has considered legislative solutions to some of OSHA's
difficulties. Although the Comprehensive Occupational Safety and Health Reform
Act failed to become law in 1992, OSHA reform legislation remains a priority
item for the next congressional session. The Congress and the new
administration need to ensure that OSHA finds ways to expedite the setting of
safety and health standards and improve the effectiveness of its inspection
and hazard abatement programs. In addition, OSHA must explore innovative
enforcement strategies, such as encouraging employers to identify and correct
workplace hazards even without an OSHA inspection, given its limited
capability to conduct inspections.
Employees continue to be exposed to many hazardous work practices, conditions,
and substances because of delays by OSHA in meeting its statutory
responsibility to issue safety and health standards. Since 1971, OSHA has
promulgated fewer than 30 health and 40 safety standards, and it routinely
takes up to 10 years from the time it recognizes the need to regulate until
the regulation is finalized. One attempt to speed up the process was recently
rejected in judicial review. OSHA had updated the permissible exposure limits
for over 400 substances in one rulemaking effort, taking less than 2 years.
However, the court ruled that OSHA could not change multiple exposure levels
without providing support for each change.
We identified this issue in our 1988 transition report as an area in which
OSHA should take action, although Labor has made little improvement since
then. The Congress and the new administration need to explore other options to
expedite the standard-
etting process, such as those contained in legislation considered in the 102nd
Congress.
Over the past 4 years, we have identified changes that could make OSHA's
enforcement efforts more productive by
-- using more accurate data on injuries and illnesses and data about specific
worksites, not just about which industries are most hazardous, to better
target employers for inspection;
-- requiring employers to confirm that they have corrected the identified
hazards after being cited for violations of safety and health standards;
and
-- assessing penalties that could reasonably be expected to deter employers
from violating safety and health standards.
With a ratio of one inspector to 3,000 worksites, OSHA and the state agencies
must find ways to extend their impact far beyond the limited number of
worksites they can directly inspect. OSHA and the states need to encourage
employers to voluntarily identify and correct workplace hazards without an
OSHA inspection. One way to do this is through the formation of comprehensive
worksite safety and health programs. After reviewing the experience in states
that require employers to have such programs, which sometimes include required
joint labor-management safety and health committees, we (1) suggested that
high-risk employers be required to have comprehensive safety and health
programs and (2) recommended that OSHA use evaluation studies to determine
whether other groups of employers should be required to have these programs.
If OSHA is going to identify ways to increase its effectiveness, it will have
to increase its emphasis on evaluation. Again, little progress has been made
in recent years as OSHA continues to devote few resources to collecting
information on the impact of its policies and program activities or those of
the state-operated safety and health programs. Thus, its managers are limited
in their ability to make informed decisions, plan effectively, and identify
program activities that need to be improved to increase program effectiveness.
The new administration needs to develop an information and evaluation strategy
to improve program effectiveness.
ADDRESSING FINANCIAL CONCERNS RELATING TO THE PENSION BENEFIT GUARANTY
CORPORATION (PBGC)
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The Pension Benefit Guaranty Corporation (PBGC) was established by the
Employee Retirement Income Security Act of 1974 to insure retirement benefits
promised by private defined-benefit pension plans. The aggregate liability in
the 85,000 plans PBGC insures is over $900 billion. Collectively, these
insured plans have over $1.3 trillion in assets. However, about $40 billion of
the liabilities do not have matching assets, and at least $13 billion of this
amount is in plans of financially troubled companies. PBGC has a current
deficit of $2.3 billion, and PBGC's most pessimistic projection is that the
deficit could reach $17.9 billion by 2001. The financial issues facing PBGC
are covered in more detail in our high-risk report.
The major threat to the Pension Benefit Guaranty Corporation is from seriously
underfunded pension plans that could terminate in the near future. A sudden
sequence of terminations of large underfunded plans would burden PBGC
administratively and might impair its ability to meet its financial
obligations without spending down its asset base. The current deficit will be
a burden on future taxpayers if available assets are insufficient to pay
insured benefits.
Premiums paid by covered plans do not reflect the insurance risk to PBGC. The
fixed premium probably overcharges well-funded plans for the risk PBGC assumes
in insuring them; the capped variable premium undercharges underfunded plans.
In recent years the agency has taken strong actions to manage some of the
larger liabilities, such as the LTV Corporation, to reduce PBGC's exposure. On
the other hand, PBGC has never produced auditable financial statements, the
premium collection system has not operated properly, and the computer systems
have been designed in a haphazard fashion.
The new administration needs to (1) ensure that PBGC continues to monitor
financially troubled companies as in the cases of the TWA bankruptcy and the
financial negotiations between Chrysler and its creditors and (2) address
PBGC's long-standing management problems. In addition, the Congress needs to
strengthen the funding standards for underfunded pension plans and adjust
premiums to better reflect risks.
