The Government Accountability Office will investigate the investment decisions made by the $17.8 billion Teamsters Central States, Southeast & Southwest Areas Pension Fund, Rosemont, Ill., an agency official confirmed Wednesday.
The investigation was requested June 21 by 10 senators and 41 congressmen, who asked GAO officials to consider several issues, including how the pension fund's fiduciaries and relevant parties ensured conflict-free investment advice with reasonable fees. The letter also asked about the investment strategy and returns from 1997 to 2015, including comparisons to similar funds for each asset class.
Last week, Central States said in a statement it welcomed the review. “We are confident the GAO will conclude there was absolutely no wrongdoing at any time in connection with the fund's investment practices, which will finally put to rest all of this groundless speculation. We will cooperate fully in any GAO review.”
On May 6, the Treasury Department denied Central States' application to reduce benefits, as allowed by the Multiemployer Pension Reform Act of 2014. The pension fund applied Sept. 25 for permission to reduce benefits in order to avoid insolvency that it projected would happen by 2026. At the time of its application, it was 53% funded, with $35 billion in liabilities.