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    Subject Term: "Retirement age"

    3 publications with a total of 14 open recommendations including 2 priority recommendations
    Director: Brenda S. Farrell
    Phone: (202) 512-3604

    1 open recommendations
    Recommendation: To help support DOD management of its FECA responsibilities, the Secretary of Defense should direct the Office of the Under Secretary of Defense for Personnel and Readiness, in collaboration with the Secretaries of the military departments and other defense agency leaders, to monitor timelines associated with significant FECA claims-management actions in order to identify the extent to which delays or inefficiencies may be occurring and at what points in the process; to identify any known reasons for the delays; and to communicate this information to DOL as appropriate for consideration and action.

    Agency: Department of Defense
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Jeszeck, Charles A
    Phone: (202) 512-7215

    6 open recommendations
    including 1 priority recommendation
    Recommendation: To ensure that key information provided by claims specialists to potential claimants of Social Security retirement benefits is clear and consistent with POMS, the Commissioner of the SSA should take steps to ensure when applicable, claims specialists inform that delaying claiming will result in permanently higher monthly benefit amounts, and at least offer to provide claimants their estimated benefits at their current age, at full retirement age (FRA) (unless the claimant is already older than FRA), and age 70.

    Agency: Social Security Administration
    Status: Open
    Priority recommendation

    Comments: On 10/19/16, SSA sent a message to technicians (including claims representatives who discuss claiming with clients in field offices or over the phone) reminding them to 1) inform claimants that delaying results in permanently higher benefits; and 2) provide estimated benefits at different claiming ages. While the reminder message to claims specialists is a positive step by the agency, SSA should continue to send periodic messages about these requirements to claims specialists. Further, SSA should have field office managers periodically discuss best practices for providing this information to potential claimants at office training sessions.
    Recommendation: To ensure that key information provided by claims specialists to potential claimants of Social Security retirement benefits is clear and consistent with POMS, the Commissioner of the SSA should take steps to ensure claims specialists understand that they should avoid the use of breakeven analysis to compare benefits at different claiming ages.

    Agency: Social Security Administration
    Status: Open

    Comments: On 10/19/16, SSA sent a message to technicians (including claims representatives who discuss claiming with clients in field offices or over the phone) reminding them not to use breakeven analysis or discuss breakeven points with claimants to compare benefits at different claiming ages. While the reminder message to claims specialists is a positive step by the agency, SSA should continue to send periodic messages to claims specialist to ensure that they understand the requirement to avoid use of breakeven analysis to compare benefits at different claiming ages.
    Recommendation: To ensure potential claimants are consistently provided with key information during the claiming process to help them make informed decisions about when to claim benefits, SSA should take steps to ensure that when applicable, claims specialists inform claimants that monthly benefit amounts are determined by the highest (indexed) 35 years of earnings, and that in some cases, additional work could increase benefits.

    Agency: Social Security Administration
    Status: Open

    Comments: SSA reported that, as appropriate, it will issue a reminder to technicians or include instructions in SSA's Program and Operations Manual System (POMS) to reinforce the instructions. The agency did not provide information on how it plans to include this information in the online claims process.
    Recommendation: To ensure potential claimants are consistently provided with key information during the claiming process to help them make informed decisions about when to claim benefits, SSA should take steps to ensure that when appropriate, claims specialists clearly explain the retirement earnings test and inform claimants that any benefits withheld because of earnings above the earnings limit will result in higher monthly benefits starting at FRA.

    Agency: Social Security Administration
    Status: Open

    Comments: On 10/19/16, SSA sent a message to technicians (including claims representatives who discuss claiming with clients in field offices or over the phone) reminding them to inform claimants that any amounts withheld due to earnings (over limits) will result in higher benefits later on. While the reminder message to claims specialists is a positive step by the agency, SSA should continue to send periodic messages to claims specialist reinforcing the importance of explaining the earnings test, and informing potential claimants that any benefits withheld due to earnings will result in higher benefits starting at FRA. Further, SSA should have field office managers periodically discuss best practices for providing this information to potential claimants at office training sessions.
    Recommendation: To ensure potential claimants are consistently provided with key information during the claiming process to help them make informed decisions about when to claim benefits, SSA should take steps to ensure that claims specialists explain that lump sum retroactive benefits will result in a permanent reduction of monthly benefits. For the online claiming process, SSA should evaluate removing or revising the online question that asks claimants to provide a reason for not choosing retroactive benefits.

    Agency: Social Security Administration
    Status: Open

    Comments: SSA stated that it will issue a reminder to technicians, instructing them to explain that a lump sum retroactive benefit would result in a permanent reduction in monthly benefits; or include instructions in SSA's Program and Operations Manual System (POMS). As for the question included in the online process, SSA said it will explore the underlying rationale for this question and consider modifying the question.
    Recommendation: To ensure potential claimants are consistently provided with key information during the claiming process to help them make informed decisions about when to claim benefits, SSA should take steps to ensure that the claims process include basic information on how life expectancy and longevity risk may affect the decision to claim benefits.

    Agency: Social Security Administration
    Status: Open

    Comments: SSA updated Pub No. 05-10147 to mention that: 1) monthly benefits are higher for the rest of one's life the longer one delays claiming; 2) retirement may be longer than you think; and 3) for married couples, delaying claiming may increase survivor benefits. SSA also added a new question on this topic to its frequently asked questions (FAQ) page, "At what age should I start receiving my Social Security Retirement benefits?" The answer provides key information for individuals to consider, and links to the newly updated publication, the Retirement Estimator tool, and other resources that SSA offers. Updating and improving a key publication on this topic is a positive step by the agency. However, it is not clear if claimants will be able to access this information while they are applying for retirement benefits online. Further, SSA did not specify how it plans to instruct claims specialists to provide information on life expectancy and longevity risk during the in-person claims process.
    Director: Jeszeck, Charles A
    Phone: (202) 512-7215

    7 open recommendations
    including 1 priority recommendation
    Recommendation: The Secretary of the Department of Labor (DOL) should help encourage plan sponsors to offer lifetime income options by clarifying the safe harbor from liability for selecting an annuity provider by providing sufficiently detailed criteria to better enable plan sponsors to comply with the safe harbor requirements related to assessing a provider's long-term solvency.

    Agency: Department of Labor
    Status: Open

    Comments: DOL stated that a clarification might erode consumer protections by degrading the oversight of fiduciaries making such selections and suggested that the plan fiduciaries outsource these decisions to a financial institution as an investment manager under Section 3(38) of ERISA. While we recognize the challenging process for plan sponsors prudently offering an in-plan annuity, we believe this strategy relies on a plan having access to something specific: a deferred annuity embedded in a target date fund and very few plans offer deferred annuities. It is not clear whether such a service would be available and affordable to the bulk of 401(k) plan sponsors.
    Recommendation: The Secretary of the DOL should help encourage plan sponsors to offer lifetime income options by considering providing legal relief for plan fiduciaries offering an appropriate mix of annuity and withdrawal options, upon adequately informing participants about the options, before participants choose to direct their investments into them.

    Agency: Department of Labor
    Status: Open
    Priority recommendation

    Comments: DOL stated that it is open to considering alternative regulatory approaches, and will include the recommendations as part of its ongoing development and prioritization of its agenda. DOL commented that the statutory structure explicitly provided by section 404(c) of ERISA pertaining to "investments" may not extend to annuities, although annuities are included as qualified default investment alternatives already. They also expressed concern that it might move the responsibility for the selection of the annuity provider to the participant, although DOL officials told us they believe plan fiduciaries maintain investment selection responsibility currently under 404(c). DOL suggested an alternative outsourcing solution to put the evaluation of the annuity provider in the hands of fiduciaries with financial expertise without the need of a regulation to reduce the obligations fiduciaries have to protect participants' interests. However, we believe this focuses solely on annuities and does not address the need for the same broad array of alternatives and information about them that 404(c) creates in the accumulation phase. We will close this recommendation when DOL either determines internally that it lacks authority to expand 404(c) to the decumulation phase or shows an intent to solicit stakeholder views as to how a prudent mix of options might be incentivized while maintaining sufficient participant protections.
    Recommendation: To guide fiduciaries as they consider how the account balances of their participants will translate into financial security in retirement, DOL should modify its Meeting Your Fiduciary Responsibilities publication or issue new guidance to encourage plan sponsors to use a record keeper that includes annuities from multiple providers on their record keeping platform.

    Agency: Department of Labor
    Status: Open

    Comments: DOL stated that it reviewed its publications to explore ways to encourage use of products and arrangements designed to provide participants and beneficiaries a lifetime income stream after retirement, and it is working on ways to build on them to better educate participants and plan sponsors about the need to think of making retirement savings last throughout retirement.
    Recommendation: To guide fiduciaries as they consider how the account balances of their participants will translate into financial security in retirement, DOL should modify its Meeting Your Fiduciary Responsibilities publication or issue new guidance to encourage plan sponsors to offer participants the option to partially annuitize their account balance by allowing them the ability to purchase the amount of guaranteed lifetime income most appropriate for them.

    Agency: Department of Labor
    Status: Open

    Comments: DOL stated that it reviewed its publications to explore ways to encourage use of products and arrangements designed to provide participants and beneficiaries a lifetime income stream after retirement, and it is working on ways to build on them to better educate participants and plan sponsors about the need to think of making retirement savings last throughout retirement.
    Recommendation: To guide fiduciaries as they consider how the account balances of their participants will translate into financial security in retirement, DOL should modify its Meeting Your Fiduciary Responsibilities publication or issue new guidance to encourage plan sponsors to consider whether a contract with a service provider ensures future service provider changes do not cause participants to lose the value of their lifetime income guarantees.

    Agency: Department of Labor
    Status: Open

    Comments: DOL stated that it reviewed its publications to explore ways to encourage use of products and arrangements designed to provide participants and beneficiaries a lifetime income stream after retirement, and it is working on ways to build on them to better educate participants and plan sponsors about the need to think of making retirement savings last throughout retirement.
    Recommendation: To guide fiduciaries as they consider how the account balances of their participants will translate into financial security in retirement, DOL should modify its Meeting Your Fiduciary Responsibilities publication or issue new guidance to encourage plan sponsors to include participant access to advice on the plan's lifetime income options from an expert in retirement income strategies.

    Agency: Department of Labor
    Status: Open

    Comments: DOL stated that it reviewed its publications to explore ways to encourage use of products and arrangements designed to provide participants and beneficiaries a lifetime income stream after retirement, and it is working on ways to build on them to better educate participants and plan sponsors about the need to think of making retirement savings last throughout retirement.
    Recommendation: To guide fiduciaries as they consider how the account balances of their participants will translate into financial security in retirement, DOL should modify its Meeting Your Fiduciary Responsibilities publication or issue new guidance to encourage plan sponsors to consider providing RMD-based default income-plan distributions as a default stream of lifetime income based on the RMD methodology-beginning, unless they opt-out, when retirement-age participants separate from employment, rather than after age 70½.

    Agency: Department of Labor
    Status: Open

    Comments: DOL stated that it reviewed its publications to explore ways to encourage use of products and arrangements designed to provide participants and beneficiaries a lifetime income stream after retirement, and it is working on ways to build on them to better educate participants and plan sponsors about the need to think of making retirement savings last throughout retirement.