prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.



Report 2: A complicated body of rules, precedents, and practices governs the legislative process on the floor of the House of Representatives  The official manual of House rules is more than 1,000 pages long and is supplemented by 30 volumes of precedents, with more volumes to be published in coming years  Yet there are two reasons why gaining a fundamental understanding of the House's legislative procedures is not as difficult as the sheer number and size of these documents might suggest  First, the ways in which the House applies its rules are largely predictable, at least in comparison with the Senate  Some rules are certainly more complex and more difficult to interpret than others, but the House tends to follow similar procedures under similar circumstances  Even the ways in which the House frequently waives, supplants, or supplements its standing rules with special, temporary procedures generally fall into a limited number of recognizable patterns  Second, underlying most of the rules that Representatives may invoke and the procedures the House may follow is a fundamentally important premise—that a majority of Members should ultimately be able to work their will on the floor  Although House rules generally recognize the importance of permitting any minority—partisan or bipartisan—to present its views and sometimes propose its alternatives, the rules do not enable that minority to filibuster or use other parliamentary devices to prevent the majority from prevailing without undue delay  This principle provides an underlying coherence to the various specific procedures discussed in this report  Article I of the Constitution imposes a few restrictions on House (and Senate) procedures—for example, requirements affecting quorums and roll-call votes—but otherwise the Constitution authorizes each house of Congress to determine for itself the "Rules of its Proceedings" (Article 1, Section 5)  This liberal grant of authority has several important implications  First, the House can amend its rules unilaterally; it need not consult with either the Senate or the President  Second, the House is free to suspend, waive, or ignore its rules whenever it chooses to do so  By and large, the Speaker or whatever Representative is presiding usually does not enforce the rules at his or her own initiative  Instead, Members must protect their own rights by affirmatively making points of order whenever they believe the rules are about to be violated  In addition, House rules include several formal procedures for waiving or suspending certain other rules, and almost any rule can be waived by unanimous consent  Thus, the requirements and restrictions discussed in this report generally apply only if the House chooses to enforce them  If for no other reason than the size of its membership, the House has found it necessary to limit the opportunities for each Representative to participate in floor deliberations  Whenever a Member is recognized to speak on the floor, there is always a time limit on his or her right to debate  The rules of the House never permit a Representative to hold the floor for more than one hour  Under some parliamentary circumstances, there are more stringent limits, with Members being allowed to speak for no more than 5 minutes, 20 minutes, or 30 minutes  Furthermore, House rules sometimes impose a limit on how long the entire membership of the House may debate a motion or measure  Most bills and resolutions, for instance, are considered under a set of procedures called "suspension of the rules" (discussed later in this report) that limits all debate on a measure to a maximum of 40 minutes  Under other conditions, when there is no such time limit imposed by the rules, the House (and to some extent, the Committee of the Whole as well) can impose one by simple majority vote  These debate limitations and debate-limiting devices generally prevent a minority of the House from thwarting the will of the majority  House rules also limit debate in other important respects  First, all debate on the floor must be germane to whatever legislative business the House is conducting  Representatives may speak on other subjects only in one-minute speeches most often made at the beginning of each day's session, special order speeches occurring after the House has completed its legislative business for the day, and during morning hour debates that are scheduled on certain days of the week  Second, all debate on the floor must be consistent with certain rules of courtesy and decorum  For example, a Member should not question or criticize the motives of a colleague  When a House committee reports a public bill or resolution that had been referred to it, the measure is placed on the House Calendar or the Union Calendar  In general, tax, authorization, and appropriations bills are placed on the Union Calendar; all others go to the House Calendar  In effect, the calendars are catalogues of measures that have been approved, with or without proposed amendments, by one or more House committees and are now available for consideration on the floor  Placement on a calendar does not guarantee that a measure will receive floor consideration at a specified time or at all  Because it would be impractical or undesirable for the House to take up measures in the chronological order in which they are reported and placed on one of the calendars, there must be some procedures for deciding the order in which measures are to be brought from the calendars to the House floor—in other words, procedures for determining the order of business  Clause 1 of Rule XIV lists the daily order of business on the floor, beginning with the opening prayer, the approval of the Journal (the official record of House proceedings required by the Constitution), and the Pledge of Allegiance  Apart from these routine matters, however, the House never follows the order of business laid out in this rule  Instead, certain measures and actions are privileged, meaning they may interrupt the regular order of business  In practice, all the legislative business that the House conducts comes to the floor by interrupting the order of business under Rule XIV, either by unanimous consent or under the provisions of another House rule  Every bill and resolution that cannot be considered by unanimous consent must become privileged business if it is going to reach the floor at all  There is no one single set of procedures that the House always follows when it considers a public bill or resolution on the floor  Instead, there are several modes of consideration, or different sets of procedural rules, that the House uses  In some cases, House rules require that certain kinds of bills be considered in certain ways  By various means, however, the House chooses to use whichever mode of consideration is most appropriate for a given bill  Which of these modes the House uses depends on such factors as the importance and potential cost of the bill and the amount of controversy the bill has generated among Members  The differences among these sets of procedures rest largely on the balance that each strikes between the opportunities for Members to debate and propose amendments, on the one hand, and the ability of the House to act promptly, on the other  Regardless of which procedure the House uses to consider legislation, the House majority party leadership generally tries to post the text of measures coming to the chamber floor in advance on an internet website created for that purpose  The House most frequently resorts to a set of procedures that enables it to act quickly on bills that enjoy overwhelming but not unanimous support  Although this set is called "suspension of the rules," clause 1 of Rule XV provides for these procedures as an alternative to the other modes of consideration  The essential components of suspension of the rules are (1) a 40-minute limit on debate, (2) a prohibition against floor amendments, and (3) a two-thirds vote of those present and voting for passage  On every Monday, Tuesday, and Wednesday—and at other times by special arrangement—the Speaker may recognize Members to move to suspend the rules and pass a particular bill (or take some other action, such as agreeing to the Senate's amendments to a House bill)  Once such a motion is made, the motion and the bill itself together are debatable for a maximum of 40 minutes  Half of the time is controlled by the Representative making the motion, often the chair of the committee with jurisdiction over the bill; the other half is usually controlled by the ranking minority member of the committee (or sometimes the subcommittee) of jurisdiction, especially when he or she opposes the motion  The suspension motion itself may propose to pass the bill with certain amendments, but no Member may propose an amendment from the floor  During the debate, the two Members who control the time yield parts of it to other Members who wish to speak  Once the 40 minutes is either used or yielded back, a single vote occurs on suspending the rules and simultaneously passing the bill  If two-thirds of the Members present vote "Aye," the motion is agreed to and the bill is passed  If the motion fails, the House may debate the bill again at another time, perhaps under another mode of consideration that permits floor amendments and more debate and requires only a simple majority vote for passage  The House frequently considers several suspension motions on the same day, which could result in a series of electronically recorded votes taking place at 40-minute intervals if such votes are requested  For the convenience of the House, therefore, clause 8 of Rule XX permits the Speaker to postpone electronic votes that Members have demanded on motions to suspend the rules until a later time on the same day or the following day  When the votes do take place, they are clustered together, occurring one after the other without intervening debate  One of the ironies of the legislative process on the House floor is that the House does relatively little business under the basic rules of the House  Instead, most of the debate and votes on amendments to major bills occur in Committee of the Whole (discussed below)  This is largely because of the rule that generally governs debate in the House itself  The rule controlling debate during meetings of the House (as opposed to meetings of the Committee of the Whole) is clause 2 of Rule XVII, which states in part that a "Member, Delegate, or Resident Commissioner may not occupy more than one hour in debate on a question in the House " In theory, this rule permits each Representative to speak for as much as an hour on each bill, on each amendment to each bill, and on each of the countless debatable motions that Members could offer  Thus, there could be more than four hundred hours of debate on each such question, a situation that would make it virtually impossible for the House to function effectively  In practice, however, this "hour rule" usually means that each measure considered "in the House" is debated by all Members for no more than a total of only one hour before the House votes on passing it  The reason for this dramatic difference between the rule in theory and the rule in practice lies in the consequences of a parliamentary motion to order what is called the "previous question " When a bill or resolution is called up for consideration in the House—and, therefore, under the hour rule—the Speaker recognizes the majority floor manager to control the first hour of debate  The majority floor manager is usually the chair of the committee or subcommittee with jurisdiction over the measure and most often supports its passage without amendment  This Member will yield part of his or her time to other Members and may allocate control of half of the hour to the minority floor manager (usually the ranking minority member of the committee or subcommittee)  However, the majority floor manager almost always yields to other Representatives "for purposes of debate only " Thus, no other Member may propose an amendment or make any motion during that hour  During the first hour of debate, or at its conclusion, the majority floor manager invariably "moves the previous question " This nondebatable motion asks the House if it is ready to vote on passing the bill  If a majority votes for the motion, no more debate on the bill is in order, nor can any amendments to it be offered; after disposing of the motion, the House usually votes immediately on whether to pass the bill  If the House defeats the previous question, however, opponents of the bill would then be recognized to control the second hour of debate, and might use that time to try to amend the measure  Because of this, it is unusual for the House not to vote for the previous question—the House disposes of most measures considered in the House, under the hour rule, after no more than one hour of debate and with no opportunity for amendment from the floor  These are not very flexible and accommodating procedural ground rules for the House to follow in considering most legislation  Debate on a bill is usually limited to one hour, and only one or two Members control this time  Before an amendment to the bill can even be considered, the House must first vote against a motion to order the previous question  For these reasons, most major bills are not considered in the House under the hour rule  In current practice, the most common type of legislation considered under the hour rule in the House are procedural resolutions reported by the House Committee on Rules that are commonly referred to as "special rules" (discussed below)  Much of the legislative process on the floor occurs not "in the House" but in a committee of the House known as the Committee of the Whole (formally, the Committee of the Whole House on the State of the Union)  Every Representative is a member of the Committee of the Whole, and it is in this committee, meeting in the House chamber, that many major bills are debated and amended before being passed or defeated by the House itself  Most bills are first referred to, considered in, and reported by a standing legislative committee of the House before coming to the floor  In much the same way, once bills do reach the floor, many of them then are referred to a second committee, the Committee of the Whole, for further debate and for the consideration of amendments  The Speaker presides over meetings of the House but not over meetings of the Committee of the Whole  Instead, the Speaker appoints another Member of the majority party to serve as the chair of the Committee of the Whole during the time the committee is considering a particular bill or resolution  In addition, the rules that apply in Committee of the Whole are somewhat different from those that govern meetings of the House itself  The major differences are discussed in the following sections of this report  In general, the combined effect of these differences is to make the procedures in Committee of the Whole—especially the procedures for offering and debating amendments—considerably more flexible than those of the House  Clause 3 of Rule XVIII requires that most bills affecting federal taxes and spending be considered in Committee of the Whole before the House votes on passing them  Most other major bills are also considered in this way  Most commonly, the House adopts a resolution, reported by the Rules Committee, that authorizes the Speaker to declare the House "resolved" into Committee of the Whole to consider a particular bill  There are two distinct stages to consideration in Committee of the Whole  First, there is a period for general debate, which is routinely limited to an hour  Each of the floor managers usually controls half the time, yielding parts of it to other Members who want to participate in the debate  During general debate, the two floor managers and other Members discuss the bill, the conditions prompting the committee to recommend it, and the merits of its provisions  Members may describe and explain the reasons for the amendments that they intend to offer, but no amendments can actually be proposed at this time  During or after general debate, the majority floor manager may move that the committee "rise"—in other words, that the committee transform itself back into the House  When the House agrees to this motion, it may resolve into Committee of the Whole again at another time to resume consideration of the bill  Alternatively, the Committee of the Whole may proceed immediately from general debate to the next stage of consideration: the amending process  The Committee of the Whole may consider a bill for amendment section by section or, in the case of appropriations measures, paragraph by paragraph  Amendments to each section or of the bill are in order after the part they would amend has been read or designated and before the next section is read or designated  Alternatively, the bill may be open to amendment at any point, usually by unanimous consent  The first amendments considered to each part of the bill are those (if any) recommended by the committee that reported it  Thereafter, members of the committee are usually recognized before other Representatives to offer their own amendments  All amendments must be germane to the text they would amend  Germaneness is a subject matter standard more stringent than one of relevancy and reflects a complex set of criteria that have developed by precedent over the years  The Committee of the Whole votes only on amendments; it does not vote directly on the bill as a whole  And like the standing committees of the House, the Committee of the Whole does not actually amend the bill; it only votes to recommend amendments to the House  The motion to order the previous question may not be made in Committee of the Whole, so, under a purely open amendment process, Members may offer whatever germane amendments they wish  After voting on the last amendment to the last portion of the bill, the committee rises and reports the bill back to the House with whatever amendments it has agreed to  Purely open amendment processes have been rare in recent Congresses; the amendment process is far more frequently structured by the terms of a special rule reported by the Rules Committee and adopted by the House  This process is discussed in the next section of this report  An amendment to a bill is a first-degree amendment  After such an amendment is offered, but before the committee votes on it, another Member may offer a perfecting amendment to make some change in the first degree amendment  In current floor practice, this is rare  A perfecting amendment to a first-degree amendment is a second-degree amendment  After debate, the committee first votes on the second-degree perfecting amendment and then on the first-degree amendment as it may have been amended  Clause 6 of Rule XVI also provides that a Member may offer a substitute for the first-degree amendment before or after a perfecting amendment is offered, and this substitute may also be amended  Although a full discussion of these possibilities is beyond the scope of this report, it is important to note that the amending process can become complicated, with Members proposing several competing policy choices before the Committee of the Whole votes on any of them  Debate on amendments in Committee of the Whole is governed by the five-minute rule, not the hour rule that regulates debate in the House  The Member offering each amendment (or the majority floor manager, in the case of a committee amendment) is first recognized to speak for five minutes  Then a Member opposed to the amendment may claim five minutes for debate  Other Members may also speak for five minutes each by offering a motion "to strike the last word " Technically, this motion is an amendment that proposes to strike out the last word of the amendment being debated  But it is a "pro forma amendment" that is offered merely to secure time for debate and so is not voted on when the five minutes expire  In this way, each Representative may speak for five minutes on each amendment  However, a majority of the Members can vote (or agree by unanimous consent) to end the debate on an amendment immediately or at some specified time  Also, as mentioned, if the amendment process is governed by a special rule reported by the Rules Committee and adopted by the House, that resolution will limit the number, order, and form of amendments that can be considered  When the committee finally rises and reports the bill back to the House, the House proceeds to vote on the amendments the committee has adopted  It usually approves all these amendments by one voice vote, though Members can demand separate votes on any or all of them as a matter of right  After a formal and routine stage called "third reading and engrossment" (when only the title of the bill is read), there is then an opportunity for a Member, virtually always from the minority party, to offer a motion to recommit the bill to committee  If the House agrees to a "simple" or "straight" motion to recommit, which only proposes to return the bill to committee, the bill is taken from the floor and returned to committee  Although the committee technically has the power to re-report the bill, in practice, the adoption of a straight motion to recommit is often characterized as effectively "killing" the measure  "Straight" motions to recommit are rare  Alternatively, motions to recommit far more frequently include instructions that the committee report the bill back to the House "forthwith" with an amendment that is stated in the motion  If the House agrees to such a motion, which is debatable for 10 minutes, evenly divided, it then immediately votes on the amendment itself, so a motion to recommit with instructions is really a final opportunity for the minority party to amend the bill before the House votes on whether to pass it  Thus, this complicated mode of consideration, which the House uses to consider most major bills, begins in the House with a decision to resolve into Committee of the Whole to consider a particular bill  General debate and the amending process take place in Committee of the Whole, but ultimately it is the House that formally amends and then passes or rejects the bill  Clause 1(m) of Rule X authorizes the Rules Committee to report resolutions affecting the order of business  Such a resolution—called a "rule" or "special rule"—usually proposes to make a bill in order for floor consideration so that it can be debated, amended, and passed or defeated by a simple majority vote  In effect, each special rule recommends to the House that it take from the Union or House Calendar a measure that is not otherwise privileged business and bring it to the floor out of its order on that calendar  Typically, such a resolution begins by providing that, at any time after its adoption, the Speaker may declare the House resolved into Committee of the Whole for the consideration of that bill  Because the special rule is itself privileged, under clause 5(a) of Rule XIII, the House can debate and vote on it promptly  If the House accepts the Rules Committee's recommendation, it proceeds to consider the bill itself  One fundamental purpose of most special rules, therefore, is to make another bill or resolution privileged so that it may interrupt the regular order of business  Their other fundamental purpose is to set special procedural ground rules for considering that measure; these ground rules may either supplement or supplant the standing rules of the House  For example, the special rule typically sets the length of time for general debate in Committee of the Whole and specifies which Members are to control that time  In addition, the special rule normally includes provisions that expedite final House action on the bill after the amending process in Committee of the Whole has been completed  Special rules may also waive points of order that Members could otherwise make against consideration of the bill, against one of its provisions, or against an amendment to be offered to it  The most controversial provisions of special rules affect the amendments that Members can offer to the bill that the resolution makes in order  As noted above, an "open rule" permits Representatives to propose any amendment that meets the normal requirements of House rules and precedents—for example, the requirement that each amendment must be germane  A "modified open rule" permits amendments to be offered that otherwise comply with House rules but imposes a time limit on the consideration of amendments or requires them to be preprinted in the Congressional Record   At the other extreme, a "closed rule" prohibits all amendments except perhaps for committee amendments and pro forma amendments ("to strike the last word") offered only for purposes of debate  A "structured" rule, which is the most common type of rule, permits only certain specific amendments to be considered on the floor  These provisions are very important because they can prevent Representatives from offering amendments as alternatives to provisions of the bill, thereby limiting the policy choices that the House can make  Open rules have been rare in recent Congresses  However, like other committees, the Rules Committee only makes recommendations to the House  As noted above, Members debate each of its procedural resolutions in the House under the hour rule and then vote to adopt or reject it  If the House votes against ordering the previous question on a special rule, a Member could offer an amendment to it, proposing to change the conditions under which the bill itself is to be considered  Because the adoption of a special rule is often viewed as a "party loyalty" vote, however, such a development is exceedingly rare  All the same, it is important to remember that while the Rules Committee is instrumental in helping the majority party leadership formulate its order of business and in setting appropriate ground rules for considering each bill, the House retains ultimate control over what it does, when, and how  Legislation is sometimes brought before the House of Representatives for consideration by the unanimous consent of its Members  Long-standing policies announced by the Speaker regulate unanimous consent requests for this purpose  Among other things, the Speaker will recognize a Member to propound a unanimous consent request to call up an unreported bill or resolution only if that request has been cleared in advance with both party floor leaders and with the bipartisan leadership of the committee of jurisdiction  Before any bill can become law, both the House and the Senate must pass it, and the two houses must agree on each and every one of its provisions  This basic constitutional requirement means that the House must have procedures to respond when the House and Senate pass different versions of the same bill  For example, the House may pass a Senate bill with House amendments, or the Senate may pass a House bill with Senate amendments and then send its amendments to the House  In either case, the two houses must resolve their differences over these amendments before the legislative process is completed  There are essentially two ways to approach this stage of the process: (1) by dealing with the amendments individually through a process of exchanging amendments between the chambers, with the bill being sent back and forth between the House and Senate, or (2) by dealing with the amendments collectively through a conference committee of Representatives and Senators who negotiate a series of compromises and concessions that are compiled in a conference report that the two houses can vote to accept  Because the process of resolving differences between the houses can be quite complicated, only some of its basic elements are summarized here  The House normally considers Senate amendments to a House bill by unanimous consent or by suspension of the rules; the House may accept the amendments (concur in them) or amend them (concur in them with House amendments)  Alternatively, the committee with jurisdiction over the bill may authorize its chair to move that the House disagree to the Senate's amendments and send them to a conference committee  When the House amends and passes a Senate bill, it may request a conference with the Senate immediately, or it may simply send its amendments to the Senate in the hope that the Senate will accept them  If the Senate refuses to do so, it may request a conference with the House instead  On the other hand, if the House and Senate can reach agreement by proposing amendments to each other's positions, the bill can be sent to the President for his signature or veto without the need to create a conference committee  This method of resolving differences is sometimes colloquially called "ping-pong," because each chamber acts in turn, shuttling the legislation back and forth as each proposes amendments to the position of the other  If the House and Senate agree to send their versions of the bill to a conference committee, the Speaker appoints the House conferees  These conferees are usually drawn from the standing committee (or committees) with jurisdiction over the bill, although the Speaker may appoint some other Representatives as well  When the House and Senate conferees meet, they are to deal only with provisions of the bill on which the two houses disagree  They should not insert new provisions or change provisions that both houses have already approved  Furthermore, as the conferees resolve each provision or amendment in disagreement, they accept the House position, the Senate position, or a compromise between them  Like almost all other House rules, the rules limiting the authority of conferees are enforced only if Members make points of order at the appropriate time  The House may also adopt a special rule, reported by the Rules Committee, waiving points of order against a conference report  To complete their work successfully, a majority of the House conferees and a majority of the Senate conferees must sign a report that recommends all the agreements they have reached  The conferees also sign a "joint explanatory statement" that describes the original House and Senate positions and the conferees' recommendations and is the functional equivalent of a legislative committee report  After Representatives have had three days to examine a conference report, it is privileged for floor consideration; it may be called up at any time that the House is not already considering something else  The report may be debated in the House under the hour rule, so the vote almost always occurs after no more than one hour of debate  No amendments to the report are in order  In practice, however, the House almost always considers conference reports under the terms of a special rule from the Rules Committee that waives all points of order against the report and its consideration  The conference report is a proposed package settlement of a number of disagreements, so the House and Senate may accept it or reject it, but they may not change it  If the two houses agree to the report by simple majority vote, all their differences have been resolved and the bill is then "enrolled," or reprinted, for formal presentation to the President  In rare instances, conferees cannot reach agreement on one or more of the amendments in conference, or they may reach an agreement that they cannot include in their conference report because their proposal exceeds the scope of the differences between the House and Senate positions (and thus violates the rules governing the content of conference reports)  In either case, the conferees may report back to the two houses with an amendment (or amendments) in disagreement  After acting on the conference report and dealing collectively with all the other amendments that were sent to conference, the House acts on each of the amendments in disagreement by considering motions such as a motion to accept the Senate's amendment or a motion to amend it with a new House amendment  The Senate takes similar action until the disagreements on these amendments are resolved or until the two houses agree to create a new conference committee only to address the remaining amendments that are still in disagreement  The bill cannot become law until the two houses resolve all the differences between their positions  Whenever Representatives vote on the floor, there is almost always first a "voice vote," in which the Members in favor of the bill, amendment, or motion vote "Aye" in unison, followed by those voting "No " Before the Speaker (or the chair of the Committee of the Whole) announces the result, any Representative can demand a "division vote," in which the Members in favor stand up to be counted, again followed by those opposed  But before the result of either a voice vote or a division vote is announced, a Member may try to require another vote in which everyone's position is recorded publicly  This recorded vote is taken by using the House's electronic voting system  In Committee of the Whole, an electronic vote is ordered when 25 Members request it  In the House, such a vote occurs when demanded by at least one-fifth of the Members present  Alternatively, any Member can demand an electronically recorded vote in the House if a quorum of the membership is not present on the floor when the voice or division vote takes place  The Constitution requires that a quorum must be present on the floor when the House is conducting business  In the House, a quorum is a majority of the Representatives; in Committee of the Whole, it is only 100 Members  However, the House has traditionally assumed that a quorum is always present unless a Member makes a point of order that it is not  The rules restrict when Members can make such points of order, and they occur most often when the House or the Committee of the Whole is voting  In the House, for example, a Representative can object to a voice or division vote on the grounds that a quorum is not present and make that point of order  If a quorum is not present, the Speaker automatically orders an electronically recorded vote during which Members record their presence on the floor by casting their votes  The issue is decided and a quorum is established at the same time  A voice or division vote is valid even if less than a quorum participates in the vote so long as no one makes a point of order that a quorum is not present  For this reason, Members can continue to meet in their committees or fulfill their other responsibilities off the floor when the House is doing business that does not involve publicly recorded votes  On most days, the House will meet two hours prior to scheduled legislative business for Morning Hour Debate, a period in which Members can make speeches of up to five minutes on subjects of their choosing  Later, the House will meet for legislative session  After the opening prayer on each day by the House chaplain (or perhaps by a guest chaplain), the Speaker announces approval of the Journal of the previous day's proceedings  A Member may require a recorded vote on agreeing to the Speaker's approval of the Journal  Following the Pledge of Allegiance, some Members may then ask unanimous consent to address the House for one minute each on whatever subjects they wish, including subjects unrelated to the scheduled legislative business of the day  The ability to set the House's floor schedule is one of the primary powers and responsibilities of the majority party leaders, and in doing so they often consult with minority party leaders  Generally speaking, to the extent possible, majority party leaders and the committee chairmen arrange the legislative schedule for each week in advance  During the last floor session of the week, the majority leader normally announces the expected schedule for the coming week in a traditional "wrap-up" colloquy with a minority party leader  Changes in the schedule may be announced as they are made  On a Monday, Tuesday, or Wednesday, the House will commonly consider multiple measures under the "suspension of the rules" procedure  Typically, recorded votes on such measures, if requested, are clustered together and taken at the end of the day  On other days of the week, the House will usually consider a major bill pursuant to a special rule reported by the House Committee on Rules  Such a special rule would be debated in the House under the hour rule, at the end of which the majority manager of the special rule would "move the previous question," which, when adopted, brings the resolution to a vote  Once adopted, the House would ordinarily consider a measure in Committee of the Whole pursuant to the terms for general debate and amendment established by the special rule  Following consideration in the Committee of the Whole, the House would take the final votes on the measure after voting on the amendments recommended by the committee and on a minority motion to recommit, which would likely be made with amendatory instructions  As each item of business is completed, the Speaker anticipates which Member should be seeking recognition to call up the next bill or resolution  If another Representative requests to be recognized instead, t he Speaker may ask, "For what purpose does the gentleman seek recognition?" The Speaker may decline to recognize that Member if the Speaker wants the House to consider another privileged measure, motion, or report  At the end of legislative business on most days, some Members address the House for as much as an hour each on subjects of their choice  These "special order" speeches are arranged in advance and organized by the party leadership  In this way, Representatives can comment at length on current national and international issues and discuss bills that have not yet reached the House floor  The House often adjourns by early evening, although it may remain in session later when the need arises or when the end of the annual session or some other deadline approaches  The House rules for each Congress are published in a volume often called the House manual but officially entitled Constitution, Jefferson's Manual and Rules of the House of Representatives   A new edition of this collection is published each Congress  The precedents of the House established through 1935 have been compiled in the 11-volume set of Hinds' and Cannon's Precedents of the House of Representatives   More recent precedents are published as Deschler's or Deschler-Brown -Johnson Precedents of the U S  House of Representatives ; 18 volumes of this set now are available  Volume 1 of a fourth series of House precedents, Precedents of the United States House of Representatives , was initiated in 2017, and additional volumes are expected in the future  The House's procedures are summarized in House Practice: A Guide to the Rules, Precedents and Procedures of the House , by Charles W  Johnson, John V  Sullivan, and Thomas J  Wickham Jr , Parliamentarians of the House  The most recent version of House Practice was published in 2017  The Parliamentarian and his assistants welcome inquiries about House procedures and offer expert assistance compatible with their other responsibilities  CRS Report 98-995, The Amending Process in the House of Representatives , by Christopher M  Davis  CRS Report RL32200, Debate, Motions, and Other Actions in the Committee of the Whole , by Bill Heniff Jr  and Elizabeth Rybicki  CRS Report 97-552, The Discharge Rule in the House: Principal Features and Uses , by Richard S  Beth  CRS Report RL30787, Parliamentary Reference Sources: House of Representatives , by Richard S  Beth and Megan S  Lynch  CRS Report 98-696, Resolving Legislative Differences in Congress: Conference Committees and Amendments Between the Houses , by Elizabeth Rybicki  CRS Report 97-780, The Speaker of the House: House Officer, Party Leader, and Representative , by Valerie Heitshusen  CRS Report 98-314, Suspension of the Rules in the House: Principal Features , by Elizabeth Rybicki  CRS Report 98-870, Quorum Requirements in the House: Committee and Chamber , by Christopher M  Davis 
Report 2:  Furthermore, as previously discussed, the Secretary of Defense has established an 80-percent mission capability goal for critical aviation assets, including the F-35  Due to current low availability and numerous sustainment issues, the F-35 fleet will be challenged in meeting the goal  In sum, the Navy’s and Marine Corps’ significant readiness challenges have developed over more than a decade of conflict, budget uncertainty, and reductions in force structure  Both services have made encouraging progress identifying the causes of their readiness decline and have begun efforts to arrest and reverse it; however, our prior work shows that fully addressing the persistent readiness challenges will require years of sustained management attention  Our work cited today contains 25 specific recommendations to the Navy and the Marine Corps and an additional 20 recommendations to various other DOD components to assist these services in rebuilding the readiness of their forces and in modernizing for the future  Attention to these recommendations can assist the Navy and the Marine Corps as they seek to rebuild the readiness of their forces  Chairmen Wicker and Sullivan, Ranking Members Hirono and Kaine, and Members of the Subcommittees, this concludes my prepared statement  I would be pleased to respond to any questions you may have at this time  If you or your staff have questions about this testimony, please contact John H  Pendleton, Director, Defense Capabilities and Management at (202) 512-3489 or pendletonj@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement  GAO staff who made key contributions to this testimony are Suzanne Wren, Assistant Director; Clarine Allen; Steven Banovac; John Bumgarner; Chris Cronin; Benjamin Emmel; Cynthia Grant; Mae Jones; Amie Lesser; Tobin McMurdie; Shahrzad Nikoo; Carol Petersen; Cody Raysinger; Michael Silver; John E  “Jet” Trubey; and Chris Watson  Over the past 4 years, we have issued a number of reports related to Navy and Marine Corps readiness and we used them to develop this statement  Table 1 summarizes the recommendations in these reports  The Department of Defense (DOD) concurred with most of the 45 recommendations and has many actions underway  However, DOD has not fully implemented any of the recommendations to date  For each of the reports, the specific recommendations and any progress made in implementing them are summarized in tables 2 through 16  Report numbers with a C or RC suffix are classified  Report numbers with a SU suffix are sensitive but unclassified  Classified and sensitive but unclassified reports are available to personnel with the proper clearances and need to know, upon request  Navy Readiness: Actions Needed to Address Costly Maintenance Delays Facing the Attack Submarine Fleet  GAO-19-229  Washington, D C : November 19, 2018  Air Force Readiness: Actions Needed to Rebuild Readiness and Prepare for the Future  GAO-19-120T  Washington, D C : October 10, 2018  Weapon System Sustainment: Selected Air Force and Navy Aircraft Generally Have Not Met Availability Goals, and DOD and Navy Guidance Need to Be Clarified  GAO-18-678  Washington, D C : September 10, 2018  Weapon System Sustainment: Selected Air Force and Navy Aircraft Generally Have Not Met Availability Goals, and DOD and Navy Guidance Need Clarification  GAO-18-146SU  Washington, D C : April 25, 2018  Military Readiness: Update on DOD’s Progress in Developing a Readiness Rebuilding Plan  GAO-18-441RC  Washington, D C : August 10, 2018  (SECRET) Military Personnel: Collecting Additional Data Could Enhance Pilot Retention Efforts  GAO-18-439  Washington, D C : June 21, 2018  F-35 Joint Strike Fighter: Development Is Nearly Complete, but Deficiencies Found in Testing Need to Be Resolved  GAO-18-321  Washington, D C : June 5, 2018  Warfighter Support: DOD Needs to Share F-35 Operational Lessons Across the Military Services  GAO-18-464R  Washington, D C : April 25, 2018  Military Readiness: Clear Policy and Reliable Data Would Help DOD Better Manage Service Members’ Time Away from Home  GAO-18-253  Washington, D C : April 25, 2018  Military Personnel: DOD Needs to Reevaluate Fighter Pilot Workforce Requirements  GAO-18-113  Washington, D C : April 11, 2018  Military Aircraft: F-35 Brings Increased Capabilities, but the Marine Corps Needs to Assess Challenges Associated with Operating in the Pacific  GAO-18-79C  Washington, D C : March 28, 2018  (SECRET) Navy and Marine Corps Training: Further Planning Needed for Amphibious Operations Training  GAO-18-212T  Washington, DC : December 1, 2017  F-35 Aircraft Sustainment: DOD Needs to Address Challenges Affecting Readiness and Cost Transparency  GAO-18-75  Washington, D C : October 26, 2017  Defense Supply Chain: DOD Needs Complete Information on Single Sources of Supply to Proactively Manage the Risks  GAO-17-768  Washington, D C : September 28, 2017  Navy and Marine Corps Training: Further Planning Needed for Amphibious Operations Training  GAO-17-789  Washington, D C : September 26, 2017  Navy Readiness: Actions Needed to Address Persistent Maintenance, Training, and Other Challenges Facing the Fleet  GAO-17-809T  Washington, D C : September 19, 2017  Naval Shipyards: Actions Needed to Improve Poor Conditions That Affect Operation  GAO-17-548  Washington, D C : September 12, 2017  Navy Readiness: Actions Needed to Address Persistent Maintenance, Training, and Other Challenges Facing the Fleet  GAO-17-798T  Washington, D C : September 7, 2017  Navy Readiness: Actions Needed to Maintain Viable Surge Sealift and Combat Logistics Fleets GAO-17-503  Washington, D C : August 22, 2017 (reissued on Oct 31, 2017)  Department of Defense: Actions Needed to Address Five Key Mission Challenges  GAO-17-369  Washington, D C : June 13, 2017  Military Readiness: Coastal Riverine Force Challenges  GAO-17-462C  Washington, D C : June 13, 2017  (SECRET) Navy Shipbuilding: Policy Changes Needed to Improve the Post-Delivery Process and Ship Quality  GAO-17-418  Washington, D C : July 13, 2017 Offshore Petroleum Discharge System: The Navy Has Not Mitigated Risk Associated with System Limitations  GAO-17-531C  Washington, D C : June 22, 2017  (SECRET) Navy Force Structure: Actions Needed to Ensure Proper Size and Composition of Ship Crews  GAO-17-413  Washington, D C : May 18, 2017  Military Readiness: DOD’s Readiness Rebuilding Efforts May Be at Risk without a Comprehensive Plan  GAO-16-841  Washington, D C : September 7, 2016  Military Readiness: DOD’s Readiness Rebuilding Efforts May Be at Risk without a Comprehensive Plan  GAO-16-534C  Washington, D C : June 30, 2016  (SECRET) Defense Inventory: Further Analysis and Enhanced Metrics Could Improve Service Supply and Depot Operations  GAO-16-450  Washington, D C : June 9, 2016  Navy and Marine Corps: Services Face Challenges to Rebuilding Readiness  GAO-16-481RC  Washington, D C : May 25, 2016  (SECRET//NOFORN) Military Readiness: Progress and Challenges in Implementing the Navy’s Optimized Fleet Response Plan  GAO-16-466R  Washington, D C : May 2, 2016  F-35 Sustainment: DOD Needs a Plan to Address Risks Related to Its Central Logistics System  GAO-16-439  Washington, D C : April 14, 2016  Navy Force Structure: Sustainable Plan and Comprehensive Assessment Needed to Mitigate Long-Term Risks to Ships Assigned to Overseas Homeports  GAO-15-329  Washington, D C : May 29, 2015  This is a work of the U S  government and is not subject to copyright protection in the United States  The published product may be reproduced and distributed in its entirety without further permission from GAO  However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately 

ground_truth: Multiemployer plans are collectively bargained pension agreements often between labor unions and two or more employers. CSPF is one of the nation's largest multiemployer defined benefit pension plans, covering about 385,000 participants. Since 1982, the plan has operated under a court-enforceable consent decree which, among other things, requires that the plan's assets be managed by independent parties. Within 7 years, CSPF estimates that the plan's financial condition will require severe benefit cuts. GAO was asked to review the events and factors that led to the plan's critical financial status and how its investment outcomes compare to similar plans. GAO describes (1) what is known about the factors that contributed to CSPF's critical financial condition; (2) what has been CSPF's investment policy, and the process for setting and executing it, since the consent decree was established; and (3) how CSPF's investments have performed over time, particularly compared to similar pension plans. GAO reviewed relevant federal laws and regulations; interviewed CSPF representatives, International Brotherhood of Teamsters officials and members, federal officials, and knowledgeable industry stakeholders; reviewed CSPF documentation including investment policy statements and board of trustee meeting minutes; and analyzed investment returns and fees from required, annual pension plan filings and from consultant benchmarking reports. The Central States, Southeast and Southwest Areas Pension Fund (CSPF) was established in 1955 to provide pension benefits to trucking industry workers, and is one of the largest multiemployer plans. According to its regulatory filings, CSPF had less than half the estimated funds needed to cover plan liabilities in 1982 at the time it entered into a court-enforceable consent decree that provides for oversight of certain plan activities. Since then, CSPF has made some progress toward achieving its targeted level of funding; however, CSPF has never been more than 75 percent funded and its funding level has weakened since 2002, as shown in the figure below. Stakeholders GAO interviewed identified numerous factors that contributed to CSPF's financial condition. For example, stakeholders stated that changes within the trucking industry as well as a decline in union membership contributed to CSPF's inability to maintain a healthy contribution base. CSPF's active participants made up about 69 percent of all participants in 1982, but accounted for only 16 percent in 2016. The most dramatic change in active participants occurred in 2007 when the United Parcel Service, Inc. (UPS) withdrew from the plan. At that time, UPS accounted for about 30 percent of the plan's active participants (i.e. workers). In addition, the market declines of 2001 to 2002 and 2008 had a significant negative impact on the plan's long-term investment performance. Stakeholders noted that while each individual factor contributed to CSPF's critical financial condition, the interrelated nature of the factors also had a cumulative effect on the plan's financial condition. Both CSPF's investment policy and the process for setting and executing it have changed several times since the consent decree was established in 1982. The original consent decree gave an independent asset manager—called a named fiduciary—exclusive authority to set and change the plan's investment policies and manage plan assets, and prohibited CSPF trustees from managing assets or making investment decisions. Initially, the named fiduciaries sold the troubled real estate assets acquired during the pre-consent decree era. Subsequent changes include the following: In 1993, the named fiduciaries started to increase investment in equities, and their policies continued to direct that asset allocations be weighted toward equities until early 2017. Between 2003 and 2010, the court approved three plan decisions to move a total of 50 percent of CSPF's assets into passively-managed accounts (passive management typically seeks to match the performance of a specific market index and reduce investment fees). An early-2017 investment policy change precipitated by CSPF's deteriorating financial condition will continue to move plan assets into fixed income investments ahead of projected insolvency, or the date when CSPF is expected to have insufficient assets to pay promised benefits when due. As a result, assets will be gradually transitioned from “return-seeking assets”—such as equities and emerging markets debt—to high-quality investment grade debt and U.S. Treasury securities with intermediate and short-term maturities. The plan is projected to become insolvent on January 1, 2025. CSPF officials and named fiduciary representatives said these changes are intended to reduce the plan's exposure to market risk and volatility, and provide participants greater certainty prior to projected insolvency. GAO found that CSPF's investment returns and expenses were generally in line with similarly sized institutional investors and with demographically similar multiemployer pension plans. For example, GAO's analysis of returns using the peer group measure used by CSPF known as the Wilshire Associates' Trust Universe Comparison Service (TUCS), showed that CSPF's annual investment returns since 1995 were above the median about as many times as they were below. Similarly, comparing CSPF's returns to a peer group of similar multiemployer defined benefit plans using federally required annual reports found that CSPF's annual investment returns were in line with those of its peers. Specifically, CSPF's annual returns were above the median nine times and below it six times—and CSPF's overall (dollar-weighted) average annual return from 2000 through 2014 was close to that of the peer median average return of 4.8 percent. In addition, GAO found that CSPF's investment fees and other administrative expenses have also been in line with other large multiemployer plans. For example: CSPF's investment fees as a percentage of assets were about 9 percent lower than the median of large defined benefit multiemployer plans over the 2000 through 2014 period—though much of that difference is accounted for by a relative reduction in investment fees since 2007. CSPF's investment fees as a percentage of assets were, on average, about 34 basis points (or 0.34 percent). CSPF's administrative expenses related to the day-to-day operations of the plan have also been in line with other large multiemployer plans. CSPF's administrative expenses per participant were below the median for large defined benefit multiemployer plans for 12 of the 15 years over the 2000 through 2014 period. As of 2014, CSPF's administrative expense was $98 per participant, which is about 16 percent less than the median for large defined benefit multiemployer plans. GAO is not making recommendations in this report.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.

Report 1: CSPF is a defined benefit multiemployer pension plan  Multiemployer plans are often created and maintained through collective bargaining agreements between labor unions and two or more employers, so that workers who move from job to job and employer to employer within an industry can continue to accrue pension benefits within the same plan over the course of their careers  Multiemployer plans are typically found in industries with many small employers such as trucking, building and construction, and retail food sales  In 2017, there were about 1,400 defined benefit multiemployer plans nationwide covering more than 10 million participants  Most multiemployer plans are jointly administered and governed by a board of trustees selected by labor and management  The labor union typically determines how the trustees representing labor are chosen and the contributing employers or an employer association typically determines how the trustees representing management are chosen  The trustees set the overall plan policy, direct plan activities, and set benefit levels (see fig  1)  Multiemployer plans are “prefunded,” or funded in advance, primarily by employer contributions  The employer contribution is generally negotiated through a collective bargaining agreement, and is often based on a dollar amount per hour worked by each employee covered by the agreement  Employer contributions are pooled in a trust fund for investment purposes, to pay benefits to retirees and their beneficiaries, and for administrative expenses  Multiemployer plan trustees typically decide how the trust fund should be invested to meet the plan’s objectives, but the trustees can use investment managers to determine how the trust fund should be invested  Multiemployer plan trust funds can be allocated among many different types of assets, any of which can generally be passively- or actively-managed, domestically or internationally based, or publicly or nonpublicly traded (see table 1)  A plan’s funded percentage is its ratio of plan assets to plan liabilities  Because the amount needed to pay pension benefits for many years into the future cannot be known with certainty due to a variety of economic and demographic factors, including the potential volatility of asset values, estimates of a plan’s funded percentage may vary from year to year  Defined benefit pension plans use a “discount rate” to convert projected future benefits into their “present value ” The discount rate is the interest rate used to determine the current value of estimated future benefit payments and is an integral part of estimating a plan’s liabilities  The higher the discount rate, the lower the plan’s estimate of its liability  Multiemployer plans use an “assumed-return approach” that bases the discount rate on a long-term assumed average rate of return on the pension plan’s assets  Under this approach, the discount rate depends on the allocation of plan assets  For example, a reallocation of plan assets into more stocks and fewer bonds typically increases the discount rate, which reduces the estimated value of plan liabilities, and therefore, reduces the minimum amount of funding required  Looking at the entire “multiemployer system”—the aggregation of multiemployer plans governed by ERISA and insured by PBGC—shows that while the system was significantly underfunded around 2001 and 2009, its funded position has improved since 2009  Specifically, analyses published by the Center for Retirement Research at Boston College and the Society of Actuaries used plan regulatory filings to calculate the funded status for the system and determined that it was approaching 80 percent funded by 2014 after falling during the 2008 market downturn  However, some observers have noted that while many plans are making progress toward their minimum targets, a subset of plans face serious financial difficulties  Multiemployer retirement benefits are generally determined by the board of trustees  The bargaining parties negotiate a contribution rate and the trustees adopt or amend the plan’s benefit formulas and provisions  Decisions to increase benefits or change the plan are also typically made by the board of trustees  Benefit amounts are generally based on a worker’s years of service and either a flat dollar amount or the worker’s wage or salary history, subject to further adjustment based on the age of retirement  CSPF was established in 1955 to provide pension benefits to International Brotherhood of Teamsters union members (Teamsters) in the trucking industry, and it is one of the largest multiemployer plans  In the late 1970s, CSPF was the subject of investigations by the IRS within the U S  Department of the Treasury (Treasury), and by DOL and the U S  Department of Justice (DOJ)  The DOL investigation ultimately resulted in the establishment of a federal court-enforceable consent decree in 1982 that remains in force today  CSPF held more than $4 3 billion in Net Assets at the end of 1982 after the consent decree was established  The plan’s Net Assets peaked at nearly $26 8 billion at the end of 2007 and declined to about $15 3 billion at the end of 2016 (see fig  2)  As of 2016, CSPF reported that it had about 1,400 contributing employers and almost 385,000 participants  The number of active CSPF participants has declined over time  In 2016, 16 percent of about 385,000 participants were active, i e , still working in covered employment that resulted in employer contributions to the plan  In comparison, CSPF reported in 1982 that 69 percent of more than 466,000 participants were active participants  Since the 1980s, CSPF’s ratio of active to nonworking participants has declined more dramatically than the average for multiemployer plans  By 2015, only three of the plan’s 50 largest employers from 1980 still paid into the plan, and for each full-time active employee there were over five nonworking participants, mainly retirees  As a result, benefit payments to CSPF retirees have exceeded employer contributions in every year since 1984  Thus, CSPF has generally drawn down its investment assets  In 2016, CSPF withdrew over $2 billion from investment assets (see fig  3 )  CSPF has historically had fewer plan assets than were needed to fully fund the accrued liability—the difference referred to as unfunded liability  In 1982, we reported that CSPF was “thinly funded”—as the January 1, 1980, actuarial valuation report showed the plan’s unfunded liability was about $6 billion—and suggested that IRS should closely monitor CSPF’s financial status  In 2015, the plan’s actuary certified that the plan was in “critical and declining” status  The plan has been operating under an ERISA-required rehabilitation plan since March 25, 2008, which is expected to last indefinitely  As of January 1, 2017, the plan was funded to about 38 percent of its accrued liability  In September 2015, CSPF filed an application with Treasury seeking approval to reduce benefits pursuant to provisions in the Multiemployer Pension Reform Act of 2014 (MPRA), which is fully discussed later in this section  The application was denied in May 2016 based, in part, on Treasury’s determination that the plan’s proposed benefit suspensions were not reasonably estimated to allow the plan to remain solvent  In 2017, CSPF announced it would no longer be able to avoid the projected insolvency  (See app  II for a timeline of key events affecting CSPF ) As previously mentioned, CSPF was the subject of investigations in the 1970s by IRS, DOL, and DOJ  DOL’s investigation focused on numerous loan and investment practices alleged to constitute fiduciary breaches under ERISA, such as loans made to companies on the verge of bankruptcy, additional loans made to borrowers who had histories of delinquency, loans to borrowers to pay interest on outstanding loans that the fund recorded as interest income, and lack of controls over rental income  As a result of its investigation, DOL filed suit against the former trustees of CSPF and, in September 1982, the parties entered into a consent decree, which remains in force today  The consent decree provides measures intended to ensure that the plan complies with the requirements of ERISA, including providing for oversight by the court and DOL, and prescribes roles for multiple parties in its administration  For example, certain plan activities must be submitted to DOL for comment and to the court for approval, including new trustee approvals and some investment manager appointments  According to DOL, to prevent criminal influence from regaining a foothold of control over plan assets, the consent decree generally requires court-approved independent asset managers—called “named fiduciaries”—to manage CSPF’s investments  CSPF’s trustees are generally prohibited from managing assets; however, they remain responsible for selecting, subject to court approval, and overseeing named fiduciaries and monitoring plan performance  To focus attention on compliance with ERISA fiduciary responsibility provisions, the consent decree provides for a court-appointed independent special counsel with authority to observe plan activities and oversee and report on the plan  (See app  III for additional detail on the key provisions of the consent decree ) In 1974, Congress passed ERISA to protect the interests of participants and beneficiaries of private sector employee benefit plans  Among other things, ERISA requires plans to meet certain requirements and minimum standards  DOL, IRS, and PBGC are generally responsible for administering ERISA and related regulations  DOL has primary responsibility for administering and enforcing the fiduciary responsibility provisions under Part 4 of Title I of ERISA, which include the requirement that plan fiduciaries act prudently and in the sole interest of participants and beneficiaries  Treasury, specifically the IRS, is charged with determining whether a private sector pension plan qualifies for preferential tax treatment under the Internal Revenue Code  Additionally, the IRS is generally responsible for enforcing ERISA’s minimum funding requirements, among other things  ERISA generally requires that multiemployer plans meet minimum funding standards, which specify a funding target that must be met over a specified period of time  The funding target for such plans is measured based on assumptions as to future investment returns, rates of mortality, retirement ages, and other economic and demographic assumptions  Under the standards, a plan must collect a minimum level of contributions each year to show progress toward meeting its target, or the plan employers may be assessed excise taxes and owe the plan for missed contributions plus interest  Minimum contribution levels may vary from year to year due to a variety of economic and demographic factors, such as addressing differences between assumed investment returns and the plan’s actual investment returns  To protect retirees’ pension benefits in the event that plan sponsors are unable to pay plan benefits, PBGC was created by ERISA  PBGC is financed through mandatory insurance premiums paid by plans and plan sponsors, with premium rates set by law  PBGC operates two distinct insurance programs: one for multiemployer plans and another for single- employer plans  Each program has separate insurance funds and different benefit guarantee rules  The events that trigger PBGC intervention differ between multiemployer and single-employer plans  For multiemployer plans, the triggering event is plan insolvency, the point at which a plan begins to run out of money while not having sufficient assets to pay the full benefits that were originally promised when due  PBGC does not take over operations of an insolvent multiemployer plan; rather, it provides loan assistance to pay administrative expenses and benefits up to the PBGC-guaranteed level  According to PBGC, only once in its history has a financial assistance loan from the multiemployer pension insurance program been repaid  In 2017, PBGC provided financial assistance to 72 insolvent multiemployer plans for an aggregate amount of $141 million  For single-employer plans the triggering event is termination of an underfunded plan—generally, when the employer goes out of business or enters bankruptcy  When this happens, PBGC takes over the plan’s assets, administration, and payment of plan benefits (up to the statutory limit)  The PBGC-guaranteed benefit amounts for multiemployer plans and the premiums assessed by PBGC to cover those benefit guarantees are significantly lower than those for single-employer plans  Each insured multiemployer plan pays flat-rate insurance premiums to PBGC based on the number of participants covered  The annual premium rate for plan years beginning in January 2017 was $28 per participant and it is adjusted annually based on the national average wage index  (See app  II for the PBGC premium rates that have been in effect since the consent decree was established in 1982 ) When plans receive financial assistance, participants face a reduction in benefits  For example, using 2013 data, PBGC estimated 21 percent of more than 59,000 selected participants in insolvent multiemployer plans then receiving financial assistance from PBGC faced a benefit reduction  The proportion of participants facing reductions due to the statutory guarantee limits is expected to increase  About 51 percent of almost 20,000 selected participants in plans that PBGC believed would require future assistance were projected to face a benefit reduction  Since 2013, the deficit in PBGC’s multiemployer program has increased by nearly 700 percent, from a deficit of $8 3 billion at the end of fiscal year 2013 to $65 1 billion at the end of fiscal year 2017  PBGC estimated that at of the end of 2016, the present value of net new claims by multiemployer plans over the next 10 years would be about $24 billion, or approximately 20 percent higher than its 2015 projections  The program is projected to become insolvent within approximately 8 years  If that happens, participants who rely on PBGC guarantees will receive only a very small fraction of current statutory guarantees  According to PBGC, most participants would receive less than $2,000 a year and in many cases, much less  We have identified PBGC’s insurance programs as high-risk  This designation was made in part because multiemployer plans that are currently insolvent, or likely to become insolvent in the near future, represent a significant financial threat to the agency’s insurance program  We designated the single-employer program as high-risk in July 2003, and added the multiemployer program in January 2009  Both insurance programs remain on our high-risk list  Multiemployer Pension Plan Amendments Act of 1980 Among other things, the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA) made employers liable for a share of unfunded plan benefits when they withdraw from a plan, unless otherwise relieved of their liability, and strengthened certain funding requirements  An employer that chooses to withdraw from a multiemployer plan may be required to continue to contribute if the plan does not have sufficient assets to cover the plan’s current and known future liabilities at the time the employer withdraws; however, these payments may not fully cover the withdrawing employer’s portion of the plan’s liabilities  In such cases, the employers remaining in the plan may effectively assume the remaining liability  The Pension Protection Act of 2006 The Pension Protection Act of 2006 (PPA) was intended to improve the funding of seriously underfunded multiemployer plans, among other things  It included provisions that require plans in poor financial health to take action to improve their financial condition over the long term and established two categories of troubled plans: (1) “endangered status” or “yellow zone” plans (this category also includes a sub-category of “seriously endangered”), and (2) more seriously troubled “critical status” or “red zone” plans  PPA further required plans in the endangered and critical zones to develop written plans to improve their financial condition, such as by revising benefit structures, increasing contributions, or both, within a prescribed time frame  Multiemployer plans in yellow or red zone status must document their remediation strategies in a written plan, notify plan participants, and report annually on whether scheduled progress has been made  Since the 2008 market decline, the number of participants in endangered and critical plans has generally been decreasing (see fig  4)  The Multiemployer Pension Reform Act of 2014 In response to the funding crisis facing PBGC and multiemployer pension plans, the Multiemployer Pension Reform Act of 2014 (MPRA) made changes to the multiemployer system that were intended to improve its financial condition  Key changes included: Creation of critical and declining status  MPRA created a new category, “critical and declining,” for plans in critical status projected to become insolvent during the current plan year or within any of the 14 succeeding plan years, or in certain circumstances, within any of the 19 succeeding plan years  In 2017, PBGC reported that more than 100 multiemployer plans (more than 7 percent of plans) representing approximately 1 million participants (about 10 percent of participants) have been determined to be “critical and declining ” Permitted reduction of accrued benefits  MPRA permits plans to reduce participants’ and beneficiaries’ accrued retirement benefits if the plan can demonstrate such action is necessary to remain solvent  Plans apply to Treasury for the authority to reduce benefits  Treasury, in consultation with PBGC and DOL, reviews the applications and determines whether the proposed changes would enable the plan to remain solvent  Increased PBGC premiums  MPRA also increased the PBGC premiums for multiemployer plans from $12 to $26 (per participant per plan year) in 2015 and from $26 to $28 in plan year 2017  The annual premium in subsequent years is indexed to changes in the national average wage index  Creation of new framework of rules for partition  Partition allows a multiemployer plan to split into two plans—the original and a successor  Partitions are intended to relieve stress on the original plan by transferring the benefits of some participants to a successor plan funded by PBGC and to help retain participant benefits in the plans at levels higher than the PBGC-guaranteed levels  At the time the consent decree was established in 1982, CSPF had less than half the estimated funds needed to cover plan liabilities (and to pay associated benefits over the lifetime of participants) and it has not attained 100 percent of its estimated funding need since then, according to regulatory filings  CSPF’s 1982 Form 5500 we reviewed shows that the plan was less than 40 percent funded prior to the consent decree becoming effective  Over the next two decades, the plan generally made progress toward achieving its targeted level of funding but was never more than 75 percent funded, and funding has generally deteriorated since its 2002 filing (see fig  5)  Overall, the plan’s unfunded liability increased by approximately $11 2 billion (in inflation-adjusted dollars) between January 1983 and January 2016  As a consequence, participant benefits were never fully secured by plan assets over this period, as measured by ERISA’s minimum funding standards, and the plan consistently needed to collect contributions in excess of those needed to fund new benefit accruals to try to make up for its underfunded status  CSPF officials and other stakeholders identified several factors that contributed to CSPF’s critical financial condition and reflect the challenges faced by many multiemployer plans  For example, like CSPF, many multiemployer plans have experienced financial difficulties due to a combination of investment losses and insufficient employer contributions  In addition to being underfunded prior to the consent decree going into effect, stakeholders identified other specific factors that contributed to CSPF’s critical financial condition, such as trends within the national trucking industry and its workforce, funding challenges and common investment practices of multiemployer plans, and the impact of market downturns on long-term investment performance  Stakeholders also described the effects of the 2007 withdrawal of a key employer, United Parcel Service (UPS), on CSPF’s critical financial condition  Stakeholders we interviewed said changes to the workforce, such as declining union membership rates and changes resulting from industry deregulation, affected CSPF and some other multiemployer plans by reducing the number of workers able to participate in their plans  While the multiemployer structure distributes bankruptcy risk across many employers, for any particular multiemployer plan employers are often concentrated in the same industry, making the plans vulnerable to industry- specific trends and risks  For example, stakeholders noted the impact that the Motor Carrier Act of 1980 had on the trucking industry  Specifically, deregulation of the trucking industry reduced government oversight and regulation over interstate trucking shipping rates  The trucking industry became increasingly dominated by nonunion trucking companies resulting in the bankruptcy of many unionized trucking companies, according to stakeholders  New trucking companies typically did not join multiemployer plans because their labor force was not unionized and this, coupled with the bankruptcy of many contributing employers, contributed to a decrease in active participant populations for many plans serving the industry  As the total number of active participants in a plan declines, the resources from which to collect employer contributions declines proportionally  Stakeholders also said these changes were unforeseeable  Limitations on a plan’s ability to increase contributions mean that a plan has less capacity to recover from an underfunded position or to make up for investment returns that fall short of expectations  A decline in the number of active workers can also accelerate plan “maturity,” as measured by the ratio of nonworking to working participants  Plan maturity has implications for a plan’s investment practices and the time frame over which the plan must be funded  According to PBGC’s data for the multiemployer plans it insures, there were approximately three active participants for every nonworking participant in 1980 (3:1); by 2014, the ratio was approximately one active worker for every two nonworking participants (1:2)  Figure 6 shows the change in the percentages of active and nonworking participants for the multiemployer plans that PBGC insures  CSPF saw an even more dramatic change in its active to nonworking participant ratio from 1982 through 2015  In 1982, there were more than two active workers for every nonworking participant (2:1) and by 2016 that ratio had fallen to approximately one active worker for every five nonworking participants (1:5) (see fig  7)  Because CSPF’s contributing employers were largely trucking companies, stakeholders said this made the fund especially vulnerable to industry-wide shocks  Like the industry as a whole, CSPF was unable to attract new employers to replace exiting employers, in part because of the lack of new unionized employers  CSPF officials said that changes to the trucking industry and its workforce also led to other challenges for the plan  For example, contributions to the plan declined with the shrinking number of active workers  CSPF officials told us they could not significantly increase the contribution rate paid by remaining employers because of the financial hardship it would cause, and as a result, the plan’s ability to recover from its underfunded position was limited  CSPF officials said that this increased the plan’s reliance on investment returns to try to close the gap between its assets and liabilities  Stakeholders we interviewed cited challenges inherent in multiemployer plans’ funding and investment practices, and described how the challenges may have contributed to the critical financial condition of some plans, including CSPF  Stakeholders said that CSPF and many other multiemployer plans have been challenged by employer withdrawals  An employer withdrawal reduces the plan’s number of active worker participants, thereby reducing its contribution base and accelerating plan maturity  A withdrawing employer generally must pay a share of any unfunded benefits  Stakeholders identified several ways in which the withdrawal liability framework could result in a withdrawing employer underpaying its share of an unfunded liability  We have previously reported on the challenges associated with withdrawal liability, including: withdrawal liability assessments are often paid over time, and payment amounts are based on prior contribution rates rather than the employer’s actual withdrawal liability assessment  withdrawal liability payments are subject to a 20-year cap, regardless of whether an employer’s share of unfunded benefits has been fully paid within this 20-year timeframe; plans often did not collect some or all of the scheduled withdrawal liability payments because employers went bankrupt before completing their scheduled payments; and fears of withdrawal liability exposure increasing over time could be an incentive for participating employers to leave a plan and a disincentive for new employers to join a plan; Stakeholders we interviewed also added that the calculation used to determine withdrawal liability may use an investment return assumption that inherently transfers risk to the plan  When exiting employers do not pay their share of unfunded benefits, any remaining and future employers participating in the plan may effectively assume the unpaid share as a part of their own potential withdrawal liability as well as responsibility for the exiting employer’s “orphaned” participants  Participating employers may negotiate a withdrawal if they perceive a risk that the value of their potential withdrawal liability might grow significantly over time  In its MPRA application, CSPF cited employer withdrawals and bankruptcies as a significant challenge for the plan  CSPF reported that after deregulation, the number of contributing employers dropped by over 70 percent  While some of the drop could be due to the consolidation of trucking companies after deregulation, CSPF officials cited several cases in which employers went bankrupt or withdrew from the plan, which reduced the plan’s contribution base and accelerated its maturity  Additionally, when employers went bankrupt, they often did not pay their full withdrawal liability  For example, CSPF said two of its major contributing employers left the plan between 2001 and 2003, and left $290 million of more than $403 million in withdrawal liability unpaid after they went bankrupt  Stakeholders identified funding timeframes as a factor that contributed to the challenges facing many multiemployer plans, including CSPF  ERISA’s minimum funding standards have historically allowed multiemployer plans to amortize, or spread out the period of time for funding certain events, such as investment shortfalls and benefit improvements  For example, CSPF began a 40-year amortization of approximately $6 1 billion in underfunding on January 1, 1981, giving the plan until the end of 2021 to fully fund that amount  Longer amortization periods increase the risk of plan underfunding due to the number and magnitude of changes in the plan’s environment that may occur, such as a general decline in participants or deregulation of an industry  The Pension Protection Act of 2006 shortened amortization periods for single- employer plans to 7 years and the amortization periods for multiemployer plans to 15 years  Shorter amortization periods provide greater benefit security to plan participants by reducing an unfunded liability more rapidly  In addition, shorter amortization periods can be better aligned with the projected timing of benefit payments for a mature plan  However, shorter periods can be a source of hardship for plans with financially troubled contributing employers because they may require higher contributions  According to CSPF officials, CSPF requested and received an additional 10-year amortization extension from the IRS in 2005 after relating that contribution requirements could force participating employers into bankruptcy  One CSPF representative said an amortization extension can also help avoid subjecting the plan’s employers to IRS excise taxes for failing to make required minimum contributions  Stakeholders we interviewed said that certain common investment practices may have played a role in the critical financial condition of CSPF and other mature and declining plans  In general, multiemployer plans invest in portfolios that are expected, on average, to produce higher returns than a low-risk portfolio, such as one composed entirely of U S  Treasury securities  Stakeholders also stated that these investment practices may have been too risky because returns can be more volatile, and the higher expected returns might not be achieved  In addition, the Congressional Budget Office has reported that if “plans had been required to fund their benefit liabilities—at the time those liabilities were accrued—with safer investments, such as bonds, the underfunding of multiemployer plans would have been far less significant and would pose less risk to PBGC and beneficiaries ” Stakeholders also told us that for mature plans like CSPF, these investment practices can pose further challenges  Mature plans, with fewer active employees, have less ability to recoup losses through increased contributions and have less time to recoup losses through investment returns before benefits must be paid  Market corrections, such as those that occurred in 2001 through 2002 and in 2008, can be particularly challenging to mature plans and their participants, especially if a mature plan is also significantly underfunded  Mature plans could mitigate these risks by investing more conservatively, however, the resulting lower expected returns from more conservative investing necessitates higher funding targets and contribution rates, which could be a hardship for employers in an industry with struggling employers  Alternatively, a plan that invests more conservatively may provide lower promised benefits to accommodate the level of contributions it can collect  Lower investment returns from a more conservative investment policy would cost employers more in contributions and could potentially result in employers leaving the plan  Further, investing in a conservative portfolio would be relatively unique among multiemployer plans, and stakeholders said plan managers may feel they are acting in a prudent fashion by investing similarly to their peers  Underfunded plans like CSPF may not see conservative investment as an option if they cannot raise the contributions necessary to fully fund their vested benefits  Officials from CSPF told us that, because they lacked the ability to significantly increase revenue or decrease accrued benefits, the named fiduciaries sought incrementally higher investment returns to meet funding thresholds required by the amortization extension they received in 2005  On the other hand, there are challenges associated with risk bearing investments  In our prior work, we reported that multiemployer plans generally develop an assumed average rate of investment return and use that assumption to determine funding targets, required contributions, and the potential cost of benefit improvements  Experts we interviewed for that report told us that using a portfolio’s expected return to value the cost of benefits increases the risk that insufficient assets could be on hand when needed  They also told us that using the portfolio’s expected return to calculate liabilities could incentivize plans to invest in riskier assets and to negotiate higher benefit levels because the higher returns expected from riskier portfolios can result in lower reported liabilities  Plan Terms Set through Collective Bargaining Stakeholders we interviewed said that plan terms, such as contribution rates, which are set through the collective bargaining process, can create an additional challenge for multiemployer plans  Employers in multiemployer plans generally are not required to contribute beyond what they have agreed to in collective bargaining, and these required employer contributions generally do not change during the term of a collective bargaining agreement  CSPF officials said that up until the early 2000s, plan officials did not request modifications to collective bargaining agreements, such as reallocating contribution dollars, to respond to adverse investment returns  Stakeholders highlighted the effects of market downturns on multiemployer plan assets as another contributing factor to CSPF’s critical financial condition and that of other multiemployer plans  Failure to achieve assumed returns has the effect of increasing unfunded liabilities  For the multiemployer system in aggregate, the average annual return on plan assets over the 2002 to 2014 period was about 6 1 percent, well short of typical assumed returns of 7 0 or 7 5 percent in 2002  Many multiemployer plans were especially impacted by the 2008 market downturn  PBGC estimated that from 2007 to 2009, the value of all multiemployer plan assets fell by approximately 24 percent, or $103 billion, after accounting for contributions to and payments from the plans  Although asset values recovered to some extent after 2009, some plans continued to be significantly underfunded, and stakeholders said this could be due to the contribution base not being sufficient to help recover from investment shortfalls  CSPF’s investment performance since 2000 has reflected performance similar to other multiemployer plans and the plan went from 73 percent funded in 2000 to about 38 percent funded in 2017  While the plan used an assumed rate of return of 7 5 to 8 0 percent per year between 2000 and 2014, our analysis of the plan’s regulatory filings shows that the plan’s weighted-average investment return over this period was about 4 9 percent per year  CSPF officials said the 2008 downturn significantly reduced CSPF’s assets and it was unable to sufficiently recoup those losses when the market rebounded in 2009  Plan assets declined from $26 8 billion at the beginning of 2008 to $17 4 billion at the beginning of 2009, with $7 5 billion of the decline attributable to investment losses  Despite reporting a 26 percent return on assets during 2009, CSPF had only $19 5 billion in assets at the end of 2009 because benefits and expenses exceeded the contributions it collected and because it had fewer assets generating returns for the plan  By the end of 2009, CSPF’s funding target was $35 9 billion but the fund had less than $20 billion that could be used to generate investment returns  If CSPF’s portfolio had returned 7 5 percent per year over the 2000-2014 period, instead of the approximately 4 9 percent we calculated, we estimate that the portfolio value would have exceeded $32 0 billion at the end of 2014, or 91 percent of its Actuarial Accrued Liability  In addition to the factors mentioned that affected many multiemployer plans, stakeholders we interviewed also noted the unique effect of the UPS withdrawal on CSPF  In 2007, UPS negotiated with the International Brotherhood of Teamsters for a withdrawal from CSPF and paid a withdrawal liability payment of $6 1 billion  This payment was invested just prior to the 2008 market downturn  Moreover, the loss of UPS, CSPF’s largest contributing employer, reduced the plan’s ability to collect needed contributions if the plan became more underfunded  A UPS official said that, following the market decline of 2001-2002, the company considered whether it should withdraw from all multiemployer plans because it did not want to be the sole contributing employer in any plan  According to this official, UPS considered the large number of UPS employees in CSPF and the plan’s demographics—such as an older population and fewer employers—in its decision to withdraw  CSPF officials said they did not want UPS to withdraw because its annual contributions accounted for about one-third of all contributions to the plan  CSPF officials also told us that, prior to the UPS withdrawal, they had expected the population of active UPS workers in the plan to grow over time  UPS’ withdrawal of 30 percent of CSPF’s active workers, in combination with the significant market downturn just after UPS withdrew, reflected the loss of working members and investment challenges on a large scale  Additionally, stakeholders noted that although each of the factors that contributed to CSPF’s critical financial condition individually is important, their interrelated nature also had a cumulative effect on the plan  Industry deregulation, declines in collective bargaining, and the plan’s significantly underfunded financial condition all impaired CSPF’s ability to maintain a population of active workers sufficient to supply its need for contributions when investment shortfalls developed  Given historical rules for plan funding and industry stresses, CSPF was unable to capture adequate funding from participating employers either before or after they withdrew from the plan  The plan’s financial condition was further impaired when long-term investment performance fell short of expectations  For an underfunded, mature plan such as CSPF, the cumulative effect of these factors was described by some stakeholders as too much for CSPF to overcome  There have been three distinct periods related to CSPF’s investment policy after the original consent decree took effect: the early period, from the consent decree’s effective date in September 1982 through October 1993, during which named fiduciaries set different investment policies and sold many of CSPF’s troubled assets—mostly real estate; a middle period from November 1993 through early 2017, during which CSPF’s investment policies were consistently weighted towards equities and its asset allocation varied, with notable equity allocation increases occurring from year-ends 1993-1995 and 2000-2002; and the current period, starting in January 2017, during which named fiduciaries and CSPF trustees are moving assets into fixed income ahead of insolvency  Appendix I has a detailed timeline that includes changes to CSPF’s investment policies since the consent decree was established in 1982  The original consent decree placed exclusive responsibility for controlling and managing the plan’s assets with an independent asset manager, called a named fiduciary  Additionally, the original consent decree prohibited CSPF trustees from managing assets or making investment decisions and gave a single named fiduciary the authority to set and change the plan’s investment objectives and policies, subject to court approval (see fig  8)  During this period, two successive named fiduciaries—first Equitable Life Assurance Society of the United States (Equitable) and then Morgan Stanley—set and executed the plan’s investment objectives using similar investment philosophies, but differing investment return goals and target asset allocations (see fig  9)  Both named fiduciaries planned to sell the plan’s troubled real estate assets from the pre-consent decree era  They also limited nonpublicly traded investments to 35 percent of the plan’s assets and set broad allocation targets for new real estate, fixed income, and equity assets  In 1984, Morgan Stanley considered a dedicated bond portfolio in its capacity as the plan’s named fiduciary, but after review, Morgan Stanley decided similar results could be obtained through other investment strategies  In executing these policies, the plan’s asset allocation varied from year to year  Starting in 1987 and in subsequent years during the early period, Morgan Stanley invested a majority of the plan’s assets in fixed income assets—more than half of which were passively managed—and all equity assets were allocated to domestic equity through 1992  By 1989, CSPF officials reported that nearly all troubled real estate assets had been sold and Morgan Stanley’s responsibilities and risk of potential fiduciary liability were reduced, permitting a concomitant reduction in fees paid to the named fiduciary (see fig  10)  During the middle period, CSPF’s investment policy was broad and consistently directed that asset allocations be weighted toward equities  In 1993, Morgan Stanley revised its investment policy statement for CSPF to eliminate asset allocation targets for each asset class and instead specified that the plan invest a majority of assets in equity or equity-type securities and no more than 25 percent in nonpublicly traded assets  After 1999, CSPF’s investment policy under other, successive named fiduciaries continued to be broad and generally specified that the plan should invest a majority of assets in equity or equity-type securities  Specifically J P  Morgan’s and Northern Trust’s consecutive investment policies for part of the plan’s assets continued to specify that a majority of the plan’s assets be invested in equity or equity-type securities and no more than 15 percent be invested in nonpublicly traded assets  Goldman Sachs’ investment policy for another part of the plan’s assets did not specify asset allocation details but indicated slightly higher tolerance for risk in conjunction with its equity portfolio  CSPF trustees said that named fiduciaries considered investing in alternative assets, but instead chose to increase the plan’s allocation to equity assets  The named fiduciaries’ investment policies did not vary significantly over this period because CSPF officials said that the plan’s overarching investment objective of achieving full funding did not change, even though there were key changes to the plan’s investment management structure during this time period  Specifically, starting in 1999, the plan temporarily shifted to a dual named fiduciary structure and increased its use of passively-managed accounts—both described in detail below— changing the named fiduciary structure that had been in place since the original consent decree (see fig  11)  More specifically, the two key changes to the plan’s investment management structure were: A temporary shift to a dual named fiduciary structure  Effective in 1999, CSPF proposed and the court approved allocating plan assets between two named fiduciaries instead of one in order to diversify CSPF’s investment approach, among other things  Both named fiduciaries were in charge of setting and executing separate policies for plan assets they managed—called “Group A” and “Group B” assets—irrespective of the other named fiduciary’s allocations  During this time, the two named fiduciaries were J P  Morgan/Northern Trust and Goldman Sachs  Specifically, J P  Morgan was named fiduciary between 2000 and 2005 and Northern Trust between 2005 and 2007 for “Group A” assets  Goldman Sachs was named fiduciary for “Group B” assets between 2000 and 2010  In 2010, an investment consultant found the performance of two named fiduciaries under the dual named fiduciary structure had been similar and more expensive than it would be under a proposed move back to a single named fiduciary  Accordingly, CSPF officials proposed, and the court approved, consolidation of all assets allocated to named fiduciaries in August 2010, with Northern Trust as the plan’s single named fiduciary  An increased use of passively-managed accounts  Between 2003 and 2010, the portion of assets that named fiduciaries managed declined as the plan moved 50 percent of its assets into three passively-managed accounts  Specifically, in 2003, 20 percent of CSPF’s assets were transitioned into a passively-managed domestic fixed income account to lower the plan’s investment management fees  In addition, both of the named fiduciaries reported that they had not outperformed the industry index for the domestic fixed income assets they managed after they were approved as named fiduciaries in 1999 and 2000 through February 2003  Similarly, in 2007 and 2010, CSPF officials said that two more passively-managed accounts were created to further reduce plan fees  Specifically, in 2007, 20 percent of plan assets were moved into a passively-managed domestic equity account  Then, in 2010, an additional 10 percent of the plan’s assets were allocated to passively-managed accounts—5 percent were allocated to a new passively-managed international equity account and 5 percent were added to the passively-managed domestic equity account  CSPF officials and named fiduciary representatives also said that the plan’s investment policies did not change in response to a couple of the events that contributed to CSPF’s critical financial condition  For example, when UPS withdrew from the plan in December 2007, it paid $6 1 billion in a lump sum to fulfill its withdrawal liability  Consistent with the named fiduciaries’ investment policies during this time period, the majority of this withdrawal payment was invested in equity assets  Specifically, the court approved the UPS withdrawal liability payment to be allocated: $1 billion to Northern Trust to be invested primarily in short-term fixed income assets, $0 9 billion to the passively-managed domestic fixed income account, and $4 2 billion to partially fund the newly created passively- managed domestic equity account  As a result of the 2008 market downturn, the balance of each of CSPF’s accounts—Northern Trust’s named fiduciary account, the passively-managed domestic fixed income and domestic equity accounts, and Goldman Sachs’ named fiduciary account—declined because of investment losses or withdrawals from investment assets to pay benefits and expenses  Some of the declines in each account were reversed by investment gains in 2009  Although the changes made to CSPF’s investment management structure did not lead to investment policy changes during the middle period, they altered the process by which the policy was set and executed  In particular, trustee responsibilities in the policy process grew after CSPF trustees became responsible for developing investment policy statements and selecting and overseeing managers of the passively-managed accounts, subject to court approval  In addition, CSPF officials said the addition of passively-managed accounts between 2003 and 2010 had the effect of creating broad bounds within which the named fiduciary could set the plan’s asset allocation  For example, when the plan moved 20 percent of total plan assets into the passively-managed domestic fixed income account in 2003, this placed an upper bound on the plan’s total equity allocation at 80 percent  Similarly, since 2010 the 30 percent of total plan assets in passively-managed equity accounts has placed a lower bound on the plan’s total equity allocation at 30 percent (see fig  12)  Nevertheless, named fiduciaries maintained the largest role in setting and executing CSPF’s investment policy throughout the middle period  From 1993 to 2003, named fiduciaries managed all of the plan’s investment assets, and from 2003 to 2009, when the plan added two of the current passively-managed accounts, named fiduciaries still held the majority of the plan’s assets  It has only been since 2010 that the assets in passively-managed accounts equaled those managed by the named fiduciary  Furthermore, Northern Trust representatives said they considered the plan’s allocations to passively-managed accounts when developing the objectives and target asset allocations for the assets they managed  Northern Trust representatives also said they discussed the plan’s overall asset allocation with trustees, but the trustees, and ultimately the court, were responsible for the decision to move 50 percent of the plan’s assets into passively-managed accounts  After the 1993 policy change that specified the plan would invest a majority of assets in equity or equity-type securities, CSPF’s asset allocation changed significantly  For example, during the middle period the plan’s allocation to equities increased from 37 percent at the end of 1993 to 69 percent at the end of 2002, and its allocation to cash plus fixed income decreased from 63 percent at the end of 1993 to 27 percent at the end of 2002  In particular, Morgan Stanley increased the plan’s allocation to equity assets from 37 percent at the end of 1993 to 63 percent at the end of 1995, with the percentage in equities almost or above 50 percent through the end of 1999  From 1993 through 1999, Morgan Stanley generally decreased the plan’s allocation to fixed income assets and increased its allocation to international equity (reaching a high of about 28 percent of the plan’s assets in 1995), an asset class in which the plan had not previously invested (see fig  13)  After 1999, the plan’s asset allocation continued to be weighted towards equities  After the market downturn in 2001, CSPF trustees told us that J P  Morgan and Goldman Sachs explicitly increased the equity allocation in an attempt to generate higher investment returns and increase the plan’s funded ratio—the plan’s overarching investment objective  Between 2000 and mid-2010, when the plan had two named fiduciaries, equity assets increased from about 58 percent at the end of 2000 to between 66 and 70 percent at the end of 2001 and each year thereafter until the end of 2009, mostly based on the named fiduciaries’ decisions to increase the plan’s allocation to domestic equity assets  When Northern Trust became the sole named fiduciary in 2010, the proportion of equity assets declined from almost 72 percent at the end of 2010 to almost 63 percent at the end of 2016  During this time, Northern Trust generally decreased the plan’s allocation to domestic equity assets, increased the allocation to actively-managed fixed income, and started investing in global infrastructure assets  Northern Trust representatives said CSPF’s recent portfolio had been kept relatively aggressive in an attempt to achieve the returns the plan would need to become fully funded while balancing risk (see fig  14)  CSPF’s deteriorating financial condition precipitated a recent investment policy change that will move plan assets into fixed income and cash equivalent investments ahead of projected insolvency  In early 2017, Northern Trust representatives revised the plan’s investment policy because they, in consultation with the trustees, believed the plan had no additional options to avoid insolvency (see textbox)  This change to the plan’s outlook led to a significant change in the plan’s investment objective, from a goal of fully funding the plan to instead forestalling insolvency as long as possible while reducing the volatility of the plan’s funding  Northern Trust representatives and CSPF officials revised applicable plan investment policy statements and started to gradually transition the plan’s “return seeking assets”—such as equities and high yield and emerging markets debt—to high quality investment grade debt and U S  Treasury securities with intermediate and short-term maturities  Northern Trust’s new investment policy specified the assets under its control would not be invested in nonpublicly traded securities, in order to manage risk and provide liquidity  CSPF Has Limited Options to Achieve Solvency As of March 2018, the Central States, Southeast and Southwest Areas Pension Fund (CSPF) was projected to be insolvent on January 1, 2025  As of July 2017, CSPF officials said that the following measures (in isolation) could help the plan avoid insolvency: 18 percent year-over-year investment returns (infinite horizon), or 250 percent contribution increases (with no employer attrition), or 46 percent across-the-board benefit cut  However, CSPF officials said that investment returns and contribution increases of these magnitudes were untenable, and CSPF’s application to reduce accrued benefits under the Multiemployer Pension Reform Act of 2014 (MPRA) was denied in 2016  CSPF officials and Northern Trust representatives said these asset allocation changes are intended to provide participants greater certainty regarding their benefits and reduce the plan’s exposure to market risk and volatility until it is projected to become insolvent on January 1, 2025 (see fig  15)  Northern Trust is expected to continue to manage 50 percent of the plan’s investment assets until the plan becomes insolvent  While the total amount of assets in the passively-managed accounts will continue to constitute 50 percent of the plan’s assets, the trustees plan to transfer assets from the passively-managed domestic and international equity accounts into the passively-managed domestic fixed income account, which will be gradually transitioned to shorter-term or cash-equivalent fixed-income securities sometime before the end of March 2020 (see fig  16)  CSPF officials said the changes will reduce the amount of fees and transaction costs paid by the plan  Specifically, investment management fees are expected to generally decrease as the plan moves into shorter duration fixed income assets  In addition, Northern Trust’s plan is designed to reduce transaction costs in two ways: (1) in the near term, Northern Trust plans to liquidate “return-seeking assets” so the cash it receives can be used directly to pay benefits, and (2) it plans to synchronize the fund’s benefit payments with the maturity dates of fixed income assets it purchases so cash received can be used directly to pay benefits  Both of these design features are intended to eliminate the need to reinvest assets, which might entail additional transaction costs  Our analysis of available data from several different sources shows the returns on CSPF’s investments and the fees related to investment management and other plan administration activities appear generally in line with similar pension plans or other large institutional investors of similar size  The annual returns on CSPF’s investments in recent decades have generally been in line with the annual returns of a customized peer group provided by the investment consultant Wilshire  The comparison group data is from Wilshire’s Trust Universe Comparison Service (TUCS)—a tool used by CSPF to compare its investment returns to a group of peers  Over the 22 years covered by our analysis, CSPF’s returns were above the median in 12 years and below the median the other 10  Figure 17 illustrates how CSPF’s annual investment returns compare to CSPF’s customized peer group of master trusts with over $3 billion in assets  CSPF’s annual investment returns tended to fluctuate relative to the annual median of the TUCS peer group over the 1995 through 2016 period  For example, in 14 of the 22 years analyzed, its annual return was in the highest or lowest 25 percent of returns (7 years each)  Further, in 3 years, its investment returns fell either within the top 5 percent of returns (1996, 2009) or bottom 5 percent (1998)  In 8 of the 22 years, CSPF’s annual return was within the middle 50 percent of its TUCS peer group  The TUCS data we analyzed also included median portfolio allocations for the group of CSPF’s peers  Table 2 compares CSPF’s asset allocations for selected asset categories to the median allocations of its TUCS comparator group  In 1996, compared to the TUCS medians, CSPF had relatively lower proportions of its assets in both equities and fixed income and a relatively higher proportion in real estate  Twenty years later (2016), CSPF had relatively higher proportions of its assets in both equities and fixed income (about 15 and 7 percentage points, respectively) than the respective medians for its peer group  However, the relatively large difference between CSPF’s 2016 equity allocation and the median allocation of its peer group may be a result of the peers moving into different asset classes  For example, there is a relatively large difference, in the other direction, in the allocation to alternative investments (see table 2)  We did not identify an alternative asset category in CSPF’s asset reports for 2016, but the TUCS comparator group median asset allocation in that year is 11 8 percent of assets  Similar to our findings when comparing the returns on CSPF’s investments to a customized peer group of other large institutional funds, the annual returns on CSPF’s investments in recent decades have also generally been in line with the annual returns for a group of similar multiemployer pension plans  To create a group of comparable plans, we selected plans that had a similar degree of “maturity” to CSPF in 2000, as such plans may face similar cash flow challenges to those facing CSPF  This comparator group ultimately consisted of 15 plans in addition to CSPF  Relative to less mature plans, mature plans generally have a greater proportion of liabilities attributable to retired participants receiving benefit payments and a lower proportion attributable to active participants (i e , workers) earning benefits  Mature plans may have limited capacity to make up for insufficient investment returns through employer contributions  Similar to the comparison against other large institutional fund returns based on TUCS data, our comparison against other mature multiemployer plan returns based on Form 5500 data shows that CSPF’s annual returns fluctuate relative to the median annual return for the mature plan comparator group (see fig  18)  For example, in 12 of the 15 years, CSPF’s annual return was in the highest or lowest 25 percent of returns (7 times high and 5 times low)  In 3 of the 15 years analyzed, CSPF’s annual return fell within the middle 50 percent of the peer group  Overall, from 2000 to 2014, CSPF’s annual return was above the group median return in 9 of the 15 years—and lower than the median return in the other 6 years  Relative to its peers, CSPF’s annual returns performed worst during economic downturns and best in years coming out of such downturns  CSPF’s annual investment return was in the bottom 10 percent of returns in 2001, 2002, and 2008  Alternatively, its annual return was in the top 10 percent of returns from 2003 to 2006, in 2009, and in 2012  Additionally, the dollar-weighted average annual return for CSPF over the 2000 through 2014 period was roughly the same as the median for the mature plan comparison group  Specifically, the dollar-weighted average annual return over this period for CSPF was roughly 4 9 percent, while the median dollar-weighted average annual return over this period among the comparison plans with continuous data was 4 8 percent  Our analysis of investment returns for mature plans compares investment returns for a set of peers that includes only multiemployer defined benefit plans  However, as with the comparison against other large institutional funds, the comparisons against other mature plans are not measures of over- or under-performance relative to an index or benchmark  Similarly, as with the earlier comparison, the analysis does not account for variations in the levels of investment risk taken by the plans  Our analysis of Form 5500 data shows CSPF’s investment fees and administrative expenses were in line with other large multiemployer plans  Plan investment fees and administrative expenses are often paid from plan assets so many plans seek to keep these fees and expenses low  Additionally, investment fees are likely to be related to the value of assets under management, and plans with greater asset values tend to be able to negotiate more advantageous fee rates  According to a pension consultant and a DOL publication, investment management fees are typically a large defined benefit plan’s largest category of expense, but a pension plan also incurs a number of lesser expenses related to administering the plan  Administrative expenses (other than investment fees) may include those for: audit and bookkeeping/accounting services; legal services to the plan (opinions, litigation and advice); administrative services provided by contractors; plan staff salaries and expenses; plan overhead and supplies; and other miscellaneous expenses  These administrative expenses relate to plan operations beyond the management of the assets, including the day-to-day expenses for basic administrative services such as participant services and record keeping  Furthermore, some of these expenses can vary based on the number of participants in the plan  To compare CSPF’s fees and expenses against similarly sized plans, we tallied various investment fee-related and other administrative expenses and compared CSPF to a group of multiemployer defined benefit plans that were among the 19 largest plans in terms of assets as of January 1, 2014  According to CSPF’s 2014 Form 5500, CSPF spent about $46 5 million on investment fees (or $47 6 million in 2016 dollars) and had about $17 4 billion in assets (or $17 8 billion in 2016 dollars) as of the end of the year—resulting in an investment fee expense ratio of about 27 basis points, or 0 27 percent  Over the 2000 to 2014 period, CSPF’s average annual investment fee expense ratio was 34 basis points (0 34 percent) while the median of the averages for our large plan comparison group was 37 basis points (0 37 percent)  While CSPF’s average investment fee expense ratio was below the median for its comparison group over the period we examined, the relationship of CSPF’s annual ratio to the annual median changed over time  CSPF’s annual investment-fee expense ratio was consistently at or above the median from 2000 through 2006, but was below the median thereafter  In addition, CSPF’s average investment fee expenses over the period that followed 2006 were 26 percent less than the average over the period before 2007  (They averaged 39 basis points, or 0 39 percent, from 2000 through 2006 and 29 basis points, or 0 29 percent, from 2007 through 2014 ) Two events may have contributed to this change  First, CSPF introduced the passively-managed accounts beginning in 2003—as noted earlier, and CSPF moved certain assets to those accounts in an effort to reduce fees  Second, the change back to a single named fiduciary, which was suggested as an expense saving move, occurred in the middle of the 2007 to 2014 period analyzed  Figure 19 illustrates how CSPF’s investment fee expense ratio compares to other large plans  Our analysis uses investment fee data reported in the Form 5500 that does not include details about the sources of the fees  Investment fees may be sensitive to a plan’s particular investment strategy and the way assets are allocated  For example, with CSPF, a named fiduciary has responsibility for executing the investment strategy and allocations  According to a representative from Northern Trust—the current named fiduciary—CSPF pays a fee of about 5 basis points for named fiduciary services, and this, combined with investment management fees, is in line with investment fees for other clients (though the overall fees depend on the types of asset allocations and investment strategies)  Figure 20 shows how CSPF’s administrative (or non-investment) expenses compare to those of other large plans on a per participant basis  According to CSPF’s 2014 Form 5500, CSPF spent about $38 million on administrative expenses ($39 million in 2016 dollars)—the third most among the 20 peer plans  However, when these expenses are expressed relative to the number of plan participants, CSPF had per participant expenses of $98 in 2014, which is about 16 percent less than the median of the large comparator group, $117  Over the period studied, CSPF’s administrative expenses per participant were at or above the large comparator median in 3 years (2001, 2004, and 2005), but lower than the median in all other years of the 2000 to 2014 period  CSPF’s administrative expenses were also in line with a broader group of comparators  For example, PBGC reported on 2014 administrative expenses of a population of large multiemployer plans (plans with more than 5,000 participants)  By closely replicating the methodology of that study, we found CSPF’s expenses of $98 per participant in 2014 fell below the median expense rate of $124 dollars per participant but above the lowest quartile of this group of large multiemployer plans  In comparing administrative expenses as a percentage of benefits paid, we found CSPF’s administrative expenses were among the lowest 5 percent of this group of large multiemployer plans  We performed a similar comparison against the peer group of large plans  CSPF had the lowest administrative expense rate among the large plan peer group in 2014, paying administrative expenses at a rate of 1 4 percent of benefits paid  In addition, CSPF’s annual administrative expenses as a percentage of benefits were below the median of our peer group of large plans in all years we reviewed  Our analysis of administrative expenses is highly summarized and does not account for possibly unique sources of administrative expenses  Plans may have unique organizational structures and attribute expenses differently  For example, one plan may contract a significant portion of administrative duties with a third-party, while another plan may administer the plan in-house  According to an actuary we interviewed, most multiemployer plans are administered by a third-party, but the plan’s in- house staff will still retain a number of duties  Additionally, the amount of individual administrative expenses could vary significantly by plan depending on the importance of the related administrative function in the plan’s organization  We provided a draft of the report to the U S  Department of Labor, U S  Department of the Treasury, and the Pension Benefit Guaranty Corporation for review and comment  We received technical comments from the U S  Department of Labor and the Pension Benefit Guaranty Corporation, which we incorporated as appropriate  The U S  Department of the Treasury provided no comments  We will send copies to the appropriate congressional committees, the Secretary of Labor, the Secretary of the Treasury, Director of the Pension Benefit Guaranty Corporation, and other interested parties  This report will be available at no charge on the GAO website at http://www gao gov  If you or your staff have any questions about this report, please contact Charles Jeszeck at (202) 512-7215 or jeszeckc@gao gov or Frank Todisco at (202) 512-2700 or todiscof@gao gov  Mr  Todisco meets the qualification standards of the American Academy of Actuaries to address the actuarial issues contained in this report  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff who made key contributions to this report are listed in appendix IV  Our objectives were to review: (1) what is known about the factors that contributed to the Central States, Southeast and Southwest Areas Pension Fund’s (CSPF) critical financial condition; (2) what has been CSPF’s investment policy, and the process for setting and executing it, since the consent decree was established; and (3) how has CSPF performed over time, particularly compared to similar pension plans  For all objectives, we reviewed relevant federal laws and regulations, literature, and documentation the U S  Department of Labor (DOL) and CSPF officials provided, including reports prepared by the court- appointed independent special counsel  We interviewed knowledgeable industry stakeholders, participant advocates, CSPF officials, International Brotherhood of Teamsters officials and members, and federal officials— including officials from the Pension Benefit Guaranty Corporation (PBGC), DOL, and the U S  Department of the Treasury (Treasury)  To describe the major factors that led to CSPF’s critical financial condition, we conducted semi-structured interviews and reviewed CSPF documentation, relevant scholarly materials, trade and industry articles, government reports, conference papers, research publications, and working papers  We also collected actuarial, financial, and other data on current and historical measures of plan assets, liabilities, investment performance, and other factors, and performed our own analyses of these data  The data and documentation collected were generally from the plan or agencies that oversee pensions  We determined the information to be generally reliable for the purposes of our objectives  To describe CSPF’s investment policy and the process by which it was set and executed we (1) reviewed CSPF’s investment policy statements, court orders and consent decree amendments, and other documentation provided by CSPF officials; (2) interviewed CSPF officials, including pension plan staff, the board of trustees, and the investment advisor, and representatives of the named fiduciary serving the plan at the time of our review; and (3) summarized certain aspects of CSPF’s assets using year- end performance reports prepared by the named fiduciaries  To describe how CSPF has performed over time compared to similar pension plans, we analyzed investment and fee data from DOL’s Form 5500, the government’s primary source of pension information  We also examined CSPF’s investment returns in comparison to a customized Wilshire Associates’ (Wilshire) Trust Universe Comparison Service (TUCS) benchmark of trusts with $3 billion or more in assets  CSPF provided these data and the data are included in the independent special counsel reports  Wilshire provided supplemental data using the same benchmark specifications  We reviewed three types of documentation provided by CSPF for changes in named fiduciaries; changes in investment policy, strategy, and asset allocation; major issues that affected funding; and how these issues affected CSPF’s investment strategy and policy  Select independent special counsel reports  CSPF officials provided 4th quarter reports for each year from 1982 through 2002 and available quarterly reports from 2003 through 2007  We downloaded all available quarterly reports from 2008 through 2017 from CSPF’s website  Select board of trustee meeting minutes  We requested board of trustee meeting minutes from 1983, 1994-95, 1998-2005, 2007-2010, and 2016 so we could review trustee discussions from the first full year the plan was covered by the 1982 consent decree, the most recent full year; periods that included a recession and/or when the plan’s assets performed poorly; and periods that preceded a change or reappointment of the named fiduciary  CSPF officials selected portions of the trustee meeting minutes from those years that pertained to the following topics: named fiduciary reports concerning investment performance; discussions relating to the amortization extension the Internal Revenue Service (IRS) granted to the plan and the contribution rate increases the plan required of participating employers in an effort to comply with funding targets required as condition of the IRS-approved amortization extension; major amendments to the plan; significant reports concerning the plan’s financial condition; amendments to the consent decree; discussions relating to any inquiries or issues DOL raised; discussions of named fiduciary appointments or resignations; discussions of particularly significant contributing employer delinquencies, bankruptcies, and settlements; and discussions relating to the independent special counsel  In addition to the board of trustee meeting minutes, CSPF officials provided select documentation on similar topics a former secretary of the board of trustees retained (1995 through 2008)  Select correspondence between CSPF and DOL  CSPF officials provided select correspondence with DOL from 1987 through 2017 relating to DOL’s oversight of the plan  CSPF officials said they provided all records of those communications that related to significant, substantive, and nonroutine issues  The correspondence excluded other documents, such as periodic reports concerning asset rebalancing and correspondence related to fairly noncontroversial motions to the consent decree  In addition, DOL provided documentation throughout the course of our engagement, including documentation it provided between September and October 2017 that it had not previously identified as being relevant to our review  We completed an on-site file review at DOL in September 2017, and DOL sent us additional electronic documentation in September and October 2017  Overall, we reviewed extensive documentation from DOL—spanning over 10,000 pages of paper-based and electronic files— and spent substantial time cataloging and categorizing it  However, DOL officials reported that certain documentation related to CSPF was no longer available because it had only been retained for the time specified in the records retention policy of the relevant office  We conducted 23 semi-structured interviews with federal agency officials and other stakeholders, including affected parties, and persons knowledgeable about unions, participants and retirees, the trucking industry, collective bargaining agreements, and multiemployer pension plans  We also interviewed three stakeholders with actuarial expertise to specifically understand actuarial standards and procedures  We selected knowledgeable stakeholders based on review of literature and prior GAO work, and recommendations from other stakeholders  We judgmentally selected stakeholders whose expertise coincided with the scope of our objectives and who would be able to provide a broad range of perspectives  In our semi-structured interviews we asked about key factors affecting the plan, the broader regulatory and financial environment in which multiemployer plans operate, and solvency options for plans like CSPF  We reviewed CSPF’s investment policy statements after CSPF entered into a consent decree in 1982, most of which are documented in the consent decree or other court orders  Seven of the investment policy statements were developed by named fiduciaries in consultation with the plan’s board of trustees and four were developed by the trustees  (See fig  21 ) From each investment policy statement, we compiled relevant information on: (1) investment philosophy and plan characteristics considered in developing it, (2) investment return benchmarks, (3) asset allocation, and (4) strategies and assets  See table 3 for select asset allocation information  To describe how CSPF’s investment policy was executed, we compiled information from performance reports prepared by named fiduciaries  We reported CSPF’s asset allocation generally based on the aggregate asset allocation categories CSPF’s named fiduciaries assigned in those reports  CSPF provided these reports for the end of each year 1984 through 2016—except 1992 and 1995, for which it provided reports as of the end of November  Information we compiled included the plan’s: account breakdown (i e , assets in named fiduciary and passively- asset allocation; and investment assets withdrawn to pay benefits and administrative expenses  When possible, we checked the information from year-end performance reports against that in other sources  Specifically, to ensure we captured the vast majority of the plan’s assets in our asset summary we compared the total amount of plan assets named fiduciaries reported with Net Assets reported in CSPF’s Form 5500 filings, available from 1982 through 2016  We generally found these totals to be similar for each year—in most years the difference was about or under 1 percent  Also, named fiduciary performance reports included information on withdrawals from investment assets to meet pension and administrative expense obligations as of the end of each year, except for 1995 and 1999-present  For 1995 through 2016, we compiled this information from independent special counsel reports  For years in which we had overlapping information, 1996 through 1998, we found the reported totals were similar—no more than about 0 6 percent difference in each of those years  Based on our review we believe that the differences were insignificant to our overall analysis and did not impact our findings  To determine investment returns, investment fees, and administrative expenses for CSPF and related comparator group multiemployer defined benefit plans, we analyzed electronic Form 5500 information, the primary, federal source of private pension data  We analyzed information from 2000 through 2014, the most current and complete year at the time we performed our analysis  We began our analysis with 2000 data as data on investment returns and plan fees is primarily found in the Schedule H  Schedule H information was first collected in 1999  But we begin our analysis with 2000 data as electronic data became more reliable the year after the schedule was introduced  We have previously reported on the problems associated with the electronic data of the Form 5500  To mitigate problems associated with the data, we used Form 5500 research data from PBGC  PBGC analysts routinely and systematically correct the raw 5500 data submitted by plans, and PBGC’s Form 5500 research data are thought to be the most accurate electronic versions  Although we did not independently audit the veracity of the PBGC data, we took steps to assess the reliability of the data and determined the data to be sufficiently reliable for our purposes  For example, we performed computer analyses of the data and identified inconsistencies and other indications of error and took steps to correct inconsistencies or errors  A second analyst checked all computer analyses  Funded status is a comparison of plan assets to plan liabilities  One measure of funded status is the funded percentage, which is calculated by dividing plan assets by plan liabilities  Another measure of funded status is the dollar amount of difference between plan assets and plan liabilities; the excess of plan liabilities over plan assets is the unfunded liability (or surplus if assets exceed liabilities)  In this report, we measured funded status using the Actuarial Value of Assets and the Actuarial Accrued Liability, which are the basic measures used to determine the annual required minimum contribution for multiemployer plans under ERISA  We chose these measures because of the consistent availability of data for these measures  There are other ways to measure plan assets and plan liabilities  The Actuarial Value of Assets can be a “smoothed” value that differs from the market value of plan assets  The Actuarial Accrued Liability depends on the choice of actuarial cost method and discount rate, and on whether it is determined on an ongoing plan basis or a plan close-out basis  While different measures of plan assets and liabilities will produce different measures of funded status at any particular point in time, we found that our use of the Actuarial Value of Assets and the Actuarial Accrued Liability was sufficient for our purposes, which included examining the plan’s progress relative to statutory funding standards as well as its trend over time  We developed multiple comparison groups for our analysis  The general rationale behind these comparator groups is to identify plans with similar fundamental characteristics, such as plan size or plan maturity, for purposes of investment return and fee and expense comparisons  We created the following two comparator groups: 1  Large plans (in terms of assets)  We ordered multiemployer defined benefit plans by descending 2014 plan assets (line 2a of the 2014 of the Schedule MB)  Because one of our key analyses of the data involves comparing investment returns across plans, we also limited the comparable plans to those that share a common plan year to CSPF (specifically if they have the same plan year-end of December 31)  We selected the 20 plans that had the largest plan asset values  This includes CSPF, which was the second largest multiemployer plan as of the beginning of 2014  Because these comparator plans are among the largest, they should have similar cost advantages  For example, for investment management services, they should have similar advantages in obtaining lower fees and thus garner greater net returns due to the more favorable fee structures  2  Mature plans (in terms of retiree liability proportions)  We ordered multiemployer defined benefit plans by their similarity to CSPF’s ratio of retiree to total liabilities as of the beginning of calendar year 2000  The ratio of retiree to total liabilities is defined as line 2(b)1(3) of the 2000 Schedule B divided by total liabilities of line 2(b)4(3) of the 2000 Schedule B  To compare retiree to total liability ratios, we created a variable for the absolute value of the difference between CSPF’s ratio and that of a given plan  We ordered the plans by ascending differences in the ratios (excluding any with missing differences)  CSPF was the top plan because its difference is zero by definition  Because one of our key analyses of the data involved comparing investment returns across plans, we also limited the comparable plans to those that shared a common plan year with CSPF (specifically if they have the same plan year-end of December 31)  Of the plans that had the same plan year as CSPF and assets over $300 million, we selected the 20 plans (including CSPF) that had the smallest absolute difference from CSPF in the retiree-to-total liability ratio  Plans with a high ratio of liabilities attributable to retirees will have a relatively large portion of future benefit payments attributable to those that are older and retired  By selecting plans that were similarly mature to CSPF (and had $300 million in assets as of the beginning of 2000), we identified plans that may have had a similar basis for their plan investments, similar cash flow characteristics, or similar potential deviations between time-weighted and dollar-weighted average investment returns over time (see section below entitled “Calculation of Average Investment Return over Multiple Years”)  That is, these plans should have roughly similar cost advantages and similar considerations in their investment objectives such as the balance of cash flows into and out of the fund and the plans’ investment horizons  Similarity in the balance of cash flows is important because it helps to mitigate the influence of plan maturity on the weighted average investment return over multiple years  The year 2000 was used to select the group because the primary purpose of this group is comparison of investment returns for plans that are similarly situated at the beginning of the period being analyzed  Our calculation of investment returns is based on the investment return calculation expressed in the Form 5500 instructions for the Schedule MB  Specifically the instructions of the 2014 Schedule MB state: Enter the estimated rate of return on the current value of plan assets for the 1-year period ending on the valuation date  (The current value is the same as the fair market value—see line 1b(1) instructions ) For this purpose, the rate of return is determined by using the formula 2I/(A + B – I), where I is the dollar amount of the investment return, A is the current value of the assets 1 year ago, and B is the current value of the assets on the current valuation date  Enter rates to the nearest  1 percent  If entering a negative number, enter a minus sign (“ - “) to the left of the number  After preliminary analysis of the variable and consultation with a GAO senior actuary, we determined that Form 5500, Schedule H contains all the information necessary to derive the calculation for years prior to 2008—as far back as 1999 when the Schedule H first came into existence  Additionally, we made adjustments for the timing of cash flows, to the extent indicated by the data  For example, employer and employee contributions that were considered receivable at the end of the prior year and thus included in the Schedule MB calculation were instead included in the year when the plan received the cash for the contribution  Thus, our calculation of annual rate of return is expressed as line items of the 2014 Schedule H to be: 2 * / [[{item1(f)a} – {item 1(b)1(a)} - {item 1(b)2(a)} - {item 1j(a)}] + [{item1(f)b} – {item 1(b)1(b)} - {item 1(b)2(b)} - {item 1j(b)}] – [{item 2d} - {item 2a(3)} – {item 2c}]] Or expressed with expository names as: (2 * (TLINCOME - TOTLCON - OTHERINCOMEW)) / ((TASSTSBY - (ERCONBOY + EECONBOY + OTHER_LIAB_BOY_AMT)) + (TASSTSEY - (ERCONEOY + EECONEOY + OTHER_LIAB_EOY_AMT)) - (TLINCOME - TOTLCON - OTHERINCOMEW)) For purposes of data reliability and validation of our results, we ran permutations of the calculation to see how, if at all, certain items could influence the calculation  In two permutations, we changed the timing of net asset transfers to or from other plans  (This occurs when, for example, there is a plan merger ) A senior actuary determined whether the calculations with/without net asset transfers affected our calculation  If the timing of the net transfer caused the investment return calculation to vary by more than 0 1 percent, we excluded the data for that particular plan in that particular year  We also ran another calculation that did not include “other” income so we could estimate the impact of not adjusting for such information  Historical average investment returns over multiple years can be calculated in at least two different ways  One measure is the “time- weighted” average return, calculated as a geometric average of the annual returns during the period  A time-weighted average measures average investment performance without regard to the order of the annual returns or the impact of different plan circumstances over time  Another measure is the “dollar-weighted” average return–also known as the “internal rate of return” (and also referred to as the “cash flow weighted” return in this report)—which reflects the impact of the plan’s cash flow pattern  The dollar-weighted average return is the rate that, when applied over time to the asset value at the beginning of the period and to each year’s net cash flow into or out of the plan over the period, reproduces the asset value at the end of the period  We calculated dollar-weighted average returns (along with some time- weighted returns for comparison), for both CSPF and for the multiemployer system as a whole, as discussed in the report  We used a market value of plan assets for this purpose  The dollar-weighted average captures the impact of negative cash flow on average investment return  For example, with negative cash flow, investment results in an earlier year can have a bigger impact than investment results in a later year because more money is at stake in the earlier year  Using the same beginning-of-period asset value, and subsequent annual net cash flows into or out of the plan, used in calculating the dollar- weighted average return, we also performed a hypothetical calculation of what CSPF’s end-of-period asset value would have been if the plan had earned 7 5 percent per year instead of its actual return  Conceptually, there are multiple ways to express investment fees, but our analysis used the following two methods for calculating them: Investment fee ratio  Investment fees [line 2i(3) of the 2014 Schedule H] divided by end-of-year net assets [line 1l(b) of the 2014 Schedule H] less receivables [line 1b(1)(b); line 1b(2)(b); and line 1b(3)(b) of the 2014 Schedule H]  Investment fees per participant  Investment fees [line 2i(3) of the 2014 Schedule H] divided by total (end-of-year) participants [line 6f of the 2014 main form]  We define administrative expenses as all other expenses besides investment fees  In part, we used this definition of administrative expenses as it represents the expenses that remain after excluding investment fees  In addition, according to a PBGC analyst, this is the unit of analysis that they also used in their study of administrative expenses  Administrative expense to benefits paid  This is administrative expenses (professional, contract and other) divided by benefits paid  For administrative expenses we derived the value by taking total expenses less investment fees   For benefits paid, we used the 2014 Schedule H, line 2e(1), “Benefit payment and payments to provide benefits directly to participants or beneficiaries, including direct rollovers ” However, if the benefit payment value for such payments is missing or zero, we used the 2014 Schedule H, line 2e(4) “Total Benefit Payments” since the plan may be expressing their benefit payments on another line  Administrative expense per participant  Administrative expenses (professional, contract and other) divided by total (end-of-year) participants   For administrative expenses we derived the value by taking total expenses [line 2i(5) of the 2014 Schedule H] less investment fees [line 2i(3) of the 2014 Schedule H]  PBGC Study on Administrative Expenses PBGC has reported on administrative expenses and included various breakouts of these data in past data book supplements  The calculations of administrative expenses in this report are similar to those used by PBGC  Certain differences may exist because our calculation did not include certain multiemployer plans that reported missing data  Additionally, our population of multiemployer plans included only those plans exclusively associated with defined benefit features  The table below compares our results for plans with 5,000 or more participants, which is a subset of plans analyzed in the PBGC study  Our results used a sample that includes three fewer plans than the PBGC study, but our distributional results were within one-tenth percent for the administrative expense ratio and within $5 of the administrative expenses per participant (see table 4)  Comparing the administrative expenses across reports using other statistics such as the minimum, maximum and standard deviation shows similar results for the PBGC and our analysis (see table 5)  The mean administrative expenses per participant differ by $2 47  This difference is 1 5 percent lower than the PBGC estimate and could be a result of the difference in sample size  We also performed additional analyses as summarized below  We compared CSPF’s annual returns against plans that have the largest assets among multiemployer defined benefit plans (with the same plan year as CSPF) and CSPF’s results against these plans were broadly similar to results for the mature plans (see fig  22)  We compared CSPF’s administrative expenses as a percentage of benefit paid against other large plans  As noted in this report, CSPF has the lowest relative administrative expenses among the comparators in 2014 with administrative expenses at 1 4 percent of benefits (see fig  23)  In addition, CSPF’s administrative expenses as a percentage of benefits were consistently below the median  For our analysis of Wilshire TUCS data, we used two sources of data  Data from 1999 through 2016 was provided by CSPF  CSPF provided reports of their TUCS custom comparison group, master trusts with greater than $3 billion in assets  These data also included the year-end return results for the total fund (also known as the combined fund) as well as returns by subcategory such as a specific named fiduciary or fund  For example, subcategories listed for year-end 2006 included the results for both named fiduciaries (Goldman Sachs and Northern Trust) as well as the passively-managed accounts (then known as the CSSS fund)  The custom comparison groups for the 1999 through 2016 data were determined each year in early-February of the year following the December 31 return results for the prior year  Thus, over time more master trusts were added (or subtracted) depending on the level of assets for the master trusts in that year  For example, the return results for year- end 1999 are determined as of February 10, 2000 and the group of master trusts with more than $3 billion contains 62 observations  The number of trusts in the custom group of master trusts with more than $3 billion generally grew over time with the number peaking with the return results for year-end 2014 (determined as of February 9, 2015), which contains 124 observations  The TUCS data from 1995 through 1998 was provided by Wilshire  The comparison group for these data were not selected each year, but, instead, selected retrospectively  For example, the comparison group of master trusts with more than $3 billion from 1995 through 1998 was selected as of January 9, 2017  There were 99 reported observations in 1995 and 132 observations in 1998  In addition, the 1995 through 1998 TUCS data did not include specific returns for CSPF  We were able to find the annual year-end return in the December (i e  year-end) management report, which for these years was provided by the named fiduciary, Morgan Stanley  Below is a list of selected events that have affected the Central States, Southeast and Southwest Areas Pension Fund (CSPF) as identified through a review of relevant documentation and interviews with stakeholders and agency officials  It is not intended to be an exhaustive list of the events that have impacted CSPF, nor is it intended to include comprehensive descriptions of each event  On September 22, 1982, the Department of Labor (DOL) entered into a court-enforceable consent decree with the Central States Southeast and Southwest Areas Pension Fund (CSPF) to help ensure the plan’s assets were managed for the sole benefit of the plan’s participants and beneficiaries as required by the Employee Retirement Income Security Act of 1974 (ERISA)  The consent decree has been amended several times and currently remains in effect, as amended, under the jurisdiction of the Federal Court for the Northern District of Illinois, Eastern Division  Below is a description of the key parties to and their primary responsibilities under the consent decree  The consent decree defines roles and responsibilities for its parties, including the court, the court-appointed independent special counsel, DOL, the plan and its Board of Trustees, and the independent asset manager, which is called the named fiduciary  The primary role of the court is to oversee and enforce the consent decree  Specifically, the court: appointed an independent special counsel to assist it in administering has approval over the appointment of named fiduciaries and trustees; has approval over the appointment of investment managers of the may, for good cause shown, remove a named fiduciary after 60 days’ notice provided to the named fiduciary and DOL; and may, upon request by the plan, dissolve the consent decree absent good cause shown by DOL why the consent decree should continue in effect  The court-appointed independent special counsel is intended to serve the court by assisting in identifying and resolving issues that arise in connection with the plan’s compliance with the consent decree and Part 4 of Title I of ERISA, and to report on the plan to the court  Specifically, the independent special counsel: has full authority to examine the plan’s activities and oversee and report on the plan’s performance of the undertakings of the consent decree; may, with court approval, employ attorneys, accountants, investigators, and others reasonably necessary and appropriate to aid him in the exercise of his responsibilities; has full access to all documents, books, records, personnel, files, and information of whatever type or description in the possession, custody, or control of the plan; may attend meetings of the plan, including meetings of the board of trustees and any meetings at which plan-related matters are discussed or considered; can petition the court to compel the plan to cooperate with the independent special counsel in the performance of his duties and responsibilities; may consult with DOL, the Internal Revenue Service, and other agencies, as appropriate, but must provide access to DOL upon its request to any documents prepared by the independent special counsel within the exercise of his power; is required to file quarterly reports, as well as any other reports the independent special counsel deems necessary or appropriate, with the court, and provide copies to DOL and the plan; may have other powers, duties, and responsibilities that the court may later determine are appropriate; and cannot be discharged or terminated during the duration of the consent decree except for leave of court, and upon the termination, discharge, death, incapacity, or resignation of an independent special counsel, the court will appoint a successor  Under the consent decree, DOL has an oversight role and may object to certain proposed plan changes  Specifically, DOL: may request and review certain reports provided by the plan and any documents prepared by the independent special counsel in the exercise of his authority; may object to the appointment of proposed trustees, named fiduciaries, investment managers of the passively-managed accounts, and asset custodians; receives notice of proposed changes to the plan’s investment policy statements from the plan; and may object to the dissolution of the consent decree  The plan must operate in full compliance with the consent decree, with ERISA, and with any conditions contained in determination letters it receives from the Internal Revenue Service  Specifically, CSPF, its board of trustees, and its internal audit staff must meet certain requirements  is required to use an independent asset manager known as the named fiduciary; must rebid the named fiduciary role at least once within every 6 years, with the option to extend the appointment for 1 calendar year; may remove a named fiduciary without cause shown on 6 months’ written notice to the named fiduciary and DOL; must cooperate with the independent special counsel in the performance of his duties and responsibilities and with DOL in its continuing investigation and enforcement responsibilities under ERISA; is required to recommend to the court three replacement candidates, agreeable to DOL, to replace an outgoing independent special counsel; and is required to maintain a qualified internal audit staff to monitor its affairs  is required to appoint, subject to court approval, the investment managers of the passively-managed accounts; is prohibited from authorizing any future acquisitions, investments, or dispositions of plan assets on a direct or indirect basis unless specifically allowed by the consent decree; and is required to comply with ERISA fiduciary duties, such as monitoring the performance of the assets of the plan, under Part 4 of Title I of ERISA  is required to review benefit administration, administrative expenditures, and the allocation of plan receipts to investments and administration; and is required to prepare monthly reports setting forth any findings and recommendations, in cooperation with the executive director of the plan, and make copies available to the independent special counsel and, upon request, to DOL and the court  The independent asset managers, known as named fiduciaries, are appointed by the plan’s trustees, subject to court approval, and have exclusive responsibility and authority to manage and control all assets of the plan allocated to them  Specifically, the named fiduciaries: may allocate plan assets among different types of investments and have exclusive authority to appoint, replace, and remove those have responsibility and authority to monitor the performance of their are required to develop, in consultation with the Board of Trustees, and implement investment policy statements for the assets they manage, giving appropriate regards to CSPF’s actuarial requirements  In addition to the individual named above David Lehrer (Assistant Director), Charles J  Ford, (Analyst-in-Charge), Laurel Beedon, Jessica Moscovitch, Layla Moughari, Joseph Silvestri, Anjali Tekchandani, Margaret J  Weber, Adam Wendel, and Miranda J  Wickham made key contributions to this report  Also contributing to this report were Susan Aschoff, Deborah K  Bland, Helen Desaulniers, Laura Hoffrey, Jennifer Gregory, Sheila McCoy, Mimi Nguyen, Jessica Orr, Monica P  Savoy, and Seyda Wentworth  Central States Pension Fund: Department of Labor Activities under the Consent Decree and Federal Law  GAO-18-105  Washington, D C : June 4, 2018  High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts Needed on Others  GAO-17-317  Washington, D C : February 15, 2017  Pension Plan Valuation: Views on Using Multiple Measures to Offer a More Complete Financial Picture  GAO-14-264  Washington, D C : September 30, 2014  Private Pensions: Clarity of Required Reports and Disclosures Could Be Improved  GAO-14-92  Washington, D C : November 21, 2013  Private Pensions: Timely Action Needed to Address Impending Multiemployer Plan Insolvencies  GAO-13-240  Washington, D C : March 28, 2013  Private Pensions: Multiemployer Plans and PBGC Face Urgent Challenges  GAO-13-428T  Washington, D C : March 5, 2013  Pension Benefit Guaranty Corporation: Redesigned Premium Structure Could Better Align Rates with Risk from Plan Sponsors  GAO-13-58  Washington, D C : November 7, 2012  Private Pensions: Changes Needed to Better Protect Multiemployer Pension Benefits  GAO-11-79  Washington, D C : October 18, 2010  Private Pensions: Long-standing Challenges Remain for Multiemployer Pension Plans  GAO-10-708T  Washington, D C : May 27, 2010  The Department of Labor’s Oversight of the Management of the Teamsters’ Central States Pension and Health and Welfare Funds  GAO/HRD-85-73  Washington, D C : July 18, 1985  Investigation to Reform Teamsters’ Central States Pension Fund Found Inadequate  HRD-82-13  Washington, D C : April 28, 1982 


Report 2:  Furthermore, as previously discussed, the Secretary of Defense has established an 80-percent mission capability goal for critical aviation assets, including the F-35  Due to current low availability and numerous sustainment issues, the F-35 fleet will be challenged in meeting the goal  In sum, the Navy’s and Marine Corps’ significant readiness challenges have developed over more than a decade of conflict, budget uncertainty, and reductions in force structure  Both services have made encouraging progress identifying the causes of their readiness decline and have begun efforts to arrest and reverse it; however, our prior work shows that fully addressing the persistent readiness challenges will require years of sustained management attention  Our work cited today contains 25 specific recommendations to the Navy and the Marine Corps and an additional 20 recommendations to various other DOD components to assist these services in rebuilding the readiness of their forces and in modernizing for the future  Attention to these recommendations can assist the Navy and the Marine Corps as they seek to rebuild the readiness of their forces  Chairmen Wicker and Sullivan, Ranking Members Hirono and Kaine, and Members of the Subcommittees, this concludes my prepared statement  I would be pleased to respond to any questions you may have at this time  If you or your staff have questions about this testimony, please contact John H  Pendleton, Director, Defense Capabilities and Management at (202) 512-3489 or pendletonj@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement  GAO staff who made key contributions to this testimony are Suzanne Wren, Assistant Director; Clarine Allen; Steven Banovac; John Bumgarner; Chris Cronin; Benjamin Emmel; Cynthia Grant; Mae Jones; Amie Lesser; Tobin McMurdie; Shahrzad Nikoo; Carol Petersen; Cody Raysinger; Michael Silver; John E  “Jet” Trubey; and Chris Watson  Over the past 4 years, we have issued a number of reports related to Navy and Marine Corps readiness and we used them to develop this statement  Table 1 summarizes the recommendations in these reports  The Department of Defense (DOD) concurred with most of the 45 recommendations and has many actions underway  However, DOD has not fully implemented any of the recommendations to date  For each of the reports, the specific recommendations and any progress made in implementing them are summarized in tables 2 through 16  Report numbers with a C or RC suffix are classified  Report numbers with a SU suffix are sensitive but unclassified  Classified and sensitive but unclassified reports are available to personnel with the proper clearances and need to know, upon request  Navy Readiness: Actions Needed to Address Costly Maintenance Delays Facing the Attack Submarine Fleet  GAO-19-229  Washington, D C : November 19, 2018  Air Force Readiness: Actions Needed to Rebuild Readiness and Prepare for the Future  GAO-19-120T  Washington, D C : October 10, 2018  Weapon System Sustainment: Selected Air Force and Navy Aircraft Generally Have Not Met Availability Goals, and DOD and Navy Guidance Need to Be Clarified  GAO-18-678  Washington, D C : September 10, 2018  Weapon System Sustainment: Selected Air Force and Navy Aircraft Generally Have Not Met Availability Goals, and DOD and Navy Guidance Need Clarification  GAO-18-146SU  Washington, D C : April 25, 2018  Military Readiness: Update on DOD’s Progress in Developing a Readiness Rebuilding Plan  GAO-18-441RC  Washington, D C : August 10, 2018  (SECRET) Military Personnel: Collecting Additional Data Could Enhance Pilot Retention Efforts  GAO-18-439  Washington, D C : June 21, 2018  F-35 Joint Strike Fighter: Development Is Nearly Complete, but Deficiencies Found in Testing Need to Be Resolved  GAO-18-321  Washington, D C : June 5, 2018  Warfighter Support: DOD Needs to Share F-35 Operational Lessons Across the Military Services  GAO-18-464R  Washington, D C : April 25, 2018  Military Readiness: Clear Policy and Reliable Data Would Help DOD Better Manage Service Members’ Time Away from Home  GAO-18-253  Washington, D C : April 25, 2018  Military Personnel: DOD Needs to Reevaluate Fighter Pilot Workforce Requirements  GAO-18-113  Washington, D C : April 11, 2018  Military Aircraft: F-35 Brings Increased Capabilities, but the Marine Corps Needs to Assess Challenges Associated with Operating in the Pacific  GAO-18-79C  Washington, D C : March 28, 2018  (SECRET) Navy and Marine Corps Training: Further Planning Needed for Amphibious Operations Training  GAO-18-212T  Washington, DC : December 1, 2017  F-35 Aircraft Sustainment: DOD Needs to Address Challenges Affecting Readiness and Cost Transparency  GAO-18-75  Washington, D C : October 26, 2017  Defense Supply Chain: DOD Needs Complete Information on Single Sources of Supply to Proactively Manage the Risks  GAO-17-768  Washington, D C : September 28, 2017  Navy and Marine Corps Training: Further Planning Needed for Amphibious Operations Training  GAO-17-789  Washington, D C : September 26, 2017  Navy Readiness: Actions Needed to Address Persistent Maintenance, Training, and Other Challenges Facing the Fleet  GAO-17-809T  Washington, D C : September 19, 2017  Naval Shipyards: Actions Needed to Improve Poor Conditions That Affect Operation  GAO-17-548  Washington, D C : September 12, 2017  Navy Readiness: Actions Needed to Address Persistent Maintenance, Training, and Other Challenges Facing the Fleet  GAO-17-798T  Washington, D C : September 7, 2017  Navy Readiness: Actions Needed to Maintain Viable Surge Sealift and Combat Logistics Fleets GAO-17-503  Washington, D C : August 22, 2017 (reissued on Oct 31, 2017)  Department of Defense: Actions Needed to Address Five Key Mission Challenges  GAO-17-369  Washington, D C : June 13, 2017  Military Readiness: Coastal Riverine Force Challenges  GAO-17-462C  Washington, D C : June 13, 2017  (SECRET) Navy Shipbuilding: Policy Changes Needed to Improve the Post-Delivery Process and Ship Quality  GAO-17-418  Washington, D C : July 13, 2017 Offshore Petroleum Discharge System: The Navy Has Not Mitigated Risk Associated with System Limitations  GAO-17-531C  Washington, D C : June 22, 2017  (SECRET) Navy Force Structure: Actions Needed to Ensure Proper Size and Composition of Ship Crews  GAO-17-413  Washington, D C : May 18, 2017  Military Readiness: DOD’s Readiness Rebuilding Efforts May Be at Risk without a Comprehensive Plan  GAO-16-841  Washington, D C : September 7, 2016  Military Readiness: DOD’s Readiness Rebuilding Efforts May Be at Risk without a Comprehensive Plan  GAO-16-534C  Washington, D C : June 30, 2016  (SECRET) Defense Inventory: Further Analysis and Enhanced Metrics Could Improve Service Supply and Depot Operations  GAO-16-450  Washington, D C : June 9, 2016  Navy and Marine Corps: Services Face Challenges to Rebuilding Readiness  GAO-16-481RC  Washington, D C : May 25, 2016  (SECRET//NOFORN) Military Readiness: Progress and Challenges in Implementing the Navy’s Optimized Fleet Response Plan  GAO-16-466R  Washington, D C : May 2, 2016  F-35 Sustainment: DOD Needs a Plan to Address Risks Related to Its Central Logistics System  GAO-16-439  Washington, D C : April 14, 2016  Navy Force Structure: Sustainable Plan and Comprehensive Assessment Needed to Mitigate Long-Term Risks to Ships Assigned to Overseas Homeports  GAO-15-329  Washington, D C : May 29, 2015  This is a work of the U S  government and is not subject to copyright protection in the United States  The published product may be reproduced and distributed in its entirety without further permission from GAO  However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately 

ground_truth: The daily order of business on the floor of the House of Representatives is governed by standing rules that make certain matters and actions privileged for consideration. On a day-to-day basis, however, the House can also decide to grant individual bills privileged access to the floor, using one of several parliamentary mechanisms. The standing rules of the House include several different parliamentary mechanisms that the body may use to act on bills and resolutions. Which of these will be employed in a given instance usually depends on the extent to which Members want to debate and amend the legislation. In general, all of the procedures of the House permit a majority of Members to work their will without excessive delay. The House considers most legislation by motions to suspend the rules, with limited debate and no floor amendments, with the support of at least two-thirds of the Members voting. Occasionally, the House will choose to consider a measure on the floor by the unanimous consent of Members. The Rules Committee is instrumental in recommending procedures for considering major bills and may propose restrictions on the floor amendments that Members can offer or bar them altogether. Many major bills are first considered in Committee of the Whole before being passed by a simple majority vote of the House. The Committee of the Whole is governed by more flexible procedures than the basic rules of the House, under which a majority can vote to pass a bill after only one hour of debate and with no floor amendments. Although a quorum is supposed to be present on the floor when the House is conducting business, the House assumes a quorum is present unless a quorum call or electronically recorded vote demonstrates that it is not. However, the standing rules preclude quorum calls at most times other than when the House is voting. Questions are first decided by voice vote, although any Member may then demand a division vote. Before the final result of a voice or division vote is announced, Members can secure an electronically recorded vote instead if enough Members desire it or if a quorum is not present in the House. The constitutional requirements for making law mean that each chamber must pass the same measure with the identical text before transmitting it to the President for his consideration. When the second chamber of Congress amends a measure sent to it by the first chamber, the two chambers must resolve legislative differences to meet this requirement. This can be accomplished by shuttling the bill back and forth between the House and Senate, with each chamber proposing amendments to the position of the other, or by establishing a conference committee to try to negotiate a compromise version of the legislation.