As many as 30 per cent of the nation's 500,000 private pension plans may have gone out of business since a federal law designed to protect employees' pension rights was enacted in 1974, a House subcommittee was told yesterday.
Commissioner of Internal Revenue Jerome Kurtz said the estimate included plans which are assumed to have terminated because they have not been heard from, in addition to those which have given notice of termination.
A subcommittee aide said the total is four to five times the number of plans which had previously been believed to have droRep. J.J.Pickle (D.Tex.) told Kurtz.
"I'm as alarmed as you are about it," Kurtz said.
He said the IRS is conducting a mailed survey to determine the status of the pension plans and why they have been terminated, if that is the case.
Kurtz also said the defunct plans are small pension funds covering not more than 5 per cent of employees participating in private pension programs.
Conrressional investgators have expressed suspicion in the past that tEmployee Retirement Income Securtiy Act of 1974 might be driving some small pension plans out of existence.
"By passing the act, we may well have driven the other hand. Kurtz said some of the plans might just be late in reporting and others might be abandoning one type of pension program in order to establish another.
Francis X.Burkhardt, assistant secretary of labor for labor-management relations, said the department disposed of 1,370 pension fund investigations last year and found 642 violations. All but four cases were settled out of court.*