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    Subject Term: "Retirement benefits"

    9 publications with a total of 44 open recommendations including 3 priority recommendations
    Director: Jeszeck, Charles A
    Phone: (202) 512-7215

    1 open recommendations
    Recommendation: Congress should consider establishing an independent commission to comprehensively examine the U.S. retirement system and make recommendations to clarify key policy goals for the system and improve how the nation can promote more stable retirement security. We suggest that such a commission include representatives from government agencies, employers, the financial services industry, unions, participant advocates, and researchers, among others, to help inform policymakers on changes needed to improve the current U.S. retirement system.

    Agency: Congress
    Status: Open

    Comments: When we determine what steps the Congress has taken, we will provide updated information.
    Director: Allison Bawden
    Phone: (202) 512-7215

    6 open recommendations
    Recommendation: To preserve the balance between the importance of repaying federal student loan debt and protecting a minimum level of Social Security benefits put in place by the Debt Collection Improvement Act of 1996, Congress should consider modifying Social Security administrative offset provisions, such as by authorizing the Department of the Treasury to annually index the amount of Social Security benefits exempted from administrative offset to reflect changes in the cost of living over time.

    Agency: Congress
    Status: Open

    Comments: As of August 2017, Congress has not yet taken action on this matter.
    Recommendation: To improve program design for Social Security offsets and related relief options, the Secretary of Education should inform affected borrowers of the suspension of offset and potential consequences if the borrower does not take action to apply for a TPD discharge. Such information could include notification that interest continues to accrue and that offsets may resume once their disability benefits are converted to retirement benefits.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education does not currently notify borrowers of the suspension of offset, but plans to implement a process to do so in the future using a new mailing sent to affected borrowers by their default servicer. The current budget situation does not allow for this type of enhancement, and it is not clear when that will change. In the interim, the agency is exploring alternative notification approaches that could be put in place prior to the implementation of an automated solution. We will monitor the agency's progress.
    Recommendation: To improve program design for Social Security offsets and related relief options, the Secretary of Education should revise forms sent to borrowers already approved for a TPD discharge to clearly and prominently state that failure to provide annual income verification documentation during the 3-year monitoring period will result in loan reinstatement.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education stated that the current Office of Management and Budget (OMB) TPD-Post discharge forms contain the recommended language in the first bullet of the Earned Income Section. In order to more clearly provide this information they recommended that the new OMB form, which is in its public comment period, (1) use a larger font size for the form and (2) use "plain language." GAO will consider closing this recommendation when the agency has completed this effort.
    Recommendation: To improve program design for Social Security offsets and related relief options, the Secretary of Education should evaluate the feasibility and benefits of implementing an automated income verification process, including determining whether the agency has the necessary legal authority to implement such a process.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education stated that over the next six months, they are committed to working with SSA to determine the feasibility and benefits of implementing an automated income verification process. The verification will address both the legal authority to implement such a process as well as operational and budgetary feasibility. We will monitor the agency's progress.
    Recommendation: To improve program design for Social Security offsets and related relief options, the Secretary of Education should inform borrowers about the financial hardship exemption option and application process on the agency's website, as well as the notice of offset sent to borrowers.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education agrees with the recommendation and said that they will include this change in upcoming revisions to the agency's web content. The agency reported that the Notice of Offset to borrowers is sent by Treasury and that they will share this recommendation with Treasury and discuss possible changes to the notice. We will consider closing this recommendation when the agency has completed this effort.
    Recommendation: To improve program design for Social Security offsets and related relief options, the Secretary of Education should implement an annual review process to ensure that only eligible borrowers are exempted from offset for financial hardship on an ongoing basis.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education reported that it plans plan to fully automate their process for tracking hardships and other exceptions from offset. However, due to competing priorities and funding limitations, full implementation of these improvements have not been scheduled. As they fully implement this process, they will review complementary strategies to assist borrowers in complying with annual reporting requirements. We will monitor the agency's progress.
    Director: Charles Jeszeck
    Phone: (202) 512-7215

    6 open recommendations
    Recommendation: To ensure that current vesting policies appropriately balance plans' needs and interests with the needs of workers to have employment mobility while also saving for retirement, Treasury should evaluate the appropriateness of existing maximum vesting policies for account-based plans, considering today's mobile labor force, and seek legislative action to revise vesting schedules, if deemed necessary. The Department of Labor could provide assistance with such an evaluation.

    Agency: Department of the Treasury
    Status: Open

    Comments: Treasury did not provide formal comments for this recommendation. The Department of Labor's comments noted that Treasury and IRS will consult with them on subjects of joint interest and Labor will provide assistance as requested. We will monitor the agency's progress.
    Recommendation: To help participants better understand eligibility and vesting policies, the Department of Labor (DOL) should develop guidance for plan sponsors that identifies best practices for communicating information about eligibility and vesting policies in a clear manner in summary plan descriptions. For example, DOL could discourage plans from including in documents information about employer contributions or other provisions that are not actually being used by the plan sponsor.

    Agency: Department of Labor
    Status: Open

    Comments: The Department of Labor disagreed with this recommendation stating that it would not be appropriate at this time to reallocate resources from its existing priority projects to a new project to identify "best practices" for communicating information about eligibility and vesting policies in a clear manner in the summary plan descriptions. The agency noted that in FY17, it will review its existing outreach material on plan administration and compliance for opportunities to highlight the issues and recommendations in our report. It will also consider this recommendation in its ongoing development and prioritization of EBSA's agenda for regulations and sub-regulatory guidance.
    Recommendation: To help increase plan participation and individuals' retirement savings, Congress should consider updating ERISA's 401(k) plan eligibility provisions to extend plan eligibility to otherwise eligible workers at an age earlier than 21.

    Agency: Congress
    Status: Open

    Comments: As of August 2017, Congress has not yet taken action on this matter.
    Recommendation: To help increase plan participation and individuals' retirement savings, Congress should consider updating ERISA's 401(k) plan eligibility provisions to amend the definition of "year of service," given the prevalence of part-time workers in today's workforce.

    Agency: Congress
    Status: Open

    Comments: When we obtain information on actions taken by the Congress, we will a update.
    Recommendation: Congress should consider whether ERISA's provisions related to the timing of employer matching contributions need to be adjusted to reflect today's mobile workforce and workplace plans, which are predominantly 401(k) plans offering matching employer contributions.

    Agency: Congress
    Status: Open

    Comments: When we obtain information on actions taken by the Congress, we will a update.
    Recommendation: Congress should consider whether ERISA's provisions related to last day policies need to be adjusted to reflect today's mobile workforce and workplace plans, which are predominantly 401(k) plans offering matching employer contributions.

    Agency: Congress
    Status: Open

    Comments: When we obtain information on actions taken by the Congress, we will a update.
    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.
    Director: Charles Jeszeck
    Phone: (202) 512-7215

    5 open recommendations
    Recommendation: To ensure that federal regulators have better information about lump sum windows and to better ensure that participants have ready access to key information they need to make a decision when presented with a lump sum offer, the Department of Labor should require plan sponsors to notify DOL at the time they implement a lump sum window offer, including the number and category of participants being extended the offer (e.g., separated vested; retiree) as well as examples of the materials provided to them.

    Agency: Department of Labor
    Status: Open

    Comments: The Department of Labor (DOL) agreed that this type of information may be helpful in determining the extent to which lump sum window offers are made, as well as the types of disclosures the participants receive. However, DOL reported that it has not identified authority under ERISA for it to impose such a requirement on plan sponsors either before or shortly after the plan offers the lump sum window. The agency states that ERISA expressly provides specific reporting and disclosure requirements. These include various filings, such as annual financial reports, reports upon plan termination, and reports upon making certain transfers of pension plan assets to health benefit accounts. The agency believes ERISA does not require plans to notify them regarding the benefit distribution options they offer or changes in those options, and does not read the broad rulemaking authority in ERISA in Section 505 (general regulations) and Section 110 (pension reporting and disclosure) as authorizing EBSA to establish the notice filing requirement GAO recommended. The agency also commented that ERISA expressly requires that most pension plans file a Form 5500 annual report with the statute specifying the required contents of this annual report in some detail and requiring ?such other financial and actuarial information as the Secretary may find necessary or appropriate.? Although the agency noted it could, by regulation, require reporting on lump sum window offers on the Form 5500, there would be a substantial time lag because ERISA by statute establishes the reporting cycle for the Form 5500 -- the report is not due until 210 days (7 months) after the plan year closes (e.g., for calendar year plans, July 31st of the following year). The agency recognizes that this might not be responsive to the recommendation, which appears to envision a notification system that is relatively contemporaneous with the lump sum window being offered to participants and beneficiaries.
    Recommendation: To ensure that federal regulators have better information about lump sum windows and to better ensure that participants have ready access to key information they need to make a decision when presented with a lump sum offer, the Department of Labor should coordinate with the Internal Revenue Service and the Pension Benefit Guaranty Corporation (PBGC) to clarify the guidance regarding the information sponsors should provide to participants when extending lump sum window offers and place the guidance on the agency's website. Guidance should include clear and understandable presentations of information, such as the relative value of the lump sum, the role and level of protections provided by PBGC, and the positive and negative ramifications of accepting the lump sum. Such guidance could also include promising practices for information materials from plan sponsors which are particularly effective in facilitating informed participant decision-making.

    Agency: Department of Labor
    Status: Open

    Comments: The Department of Labor agreed with this recommendation, noting it is important to coordinate with the Treasury Department/IRS and PBGC to clarify the guidance regarding the information sponsors and other plan fiduciaries should provide to participants and beneficiaries when extending lump sum window offers. In 2016, the agency noted that the manner of publishing that guidance would be part of that coordination process. They may consider some formal public request for input (such as publishing a Request for Information in the Federal Register) and focus group or other field testing work. In addition, the agency noted that the 2015 ERISA Advisory Council announced that one of its projects this year concerns how to give participants effective notices and disclosures concerning lump sum window offers, including possible development of model participant notices. The 2015 Council developed recommendations and model notices on lump sum window offers in "pension risk transfer transactions," and suggested that DOL make the Model Notices available on its web site to plan sponsors and participant advocates and that plan sponsors use the Model Notices when engaging in risk transfer transactions. Similar to other model communications developed by the 2015 Council, the agency believes the model notice could be further enhanced if subjected to broader public input from, for example, plan sponsors, participant advocates, communications experts, and academics. Subject to the limits on its authority in this area and resource constraints. They are considering efforts to obtain public input on the Council's recommendations and model notice. They also intend to contact the Treasury Department/IRS and PBGC to discuss the Council's recommendations.
    Recommendation: To provide participants with useful information and to provide for lump sums that are based on up-to-date assumptions, Treasury should review its regulations governing the information contained in relative value statements to ensure these statements provide a meaningful comparison of all benefit options, especially in instances where the loss of certain additional plan benefits may not be disclosed.

    Agency: Department of the Treasury
    Status: Open

    Comments: Treasury generally agreed with this recommendation but did not provide specific comments on plans to address it.
    Recommendation: To provide participants with useful information and to provide for lump sums that are based on up-to-date assumptions, Treasury should review the applicability and appropriateness of allowing sponsors to select a "lookback" interest rate for use in calculating lump sums associated with a lump sum window that can serve to advantage the interests of the sponsor.

    Agency: Department of the Treasury
    Status: Open

    Comments: Treasury generally agreed with this recommendation but did not provide specific comments on plans to address it.
    Recommendation: To provide participants with useful information and to provide for lump sums that are based on up-to-date assumptions, Treasury should establish a process and a timeline for periodically updating the mortality tables used to determine minimum required lump sums-- including a means for monitoring when experts' views may indicate that mortality tables may have become outdated, and for taking expedited action if warranted.

    Agency: Department of the Treasury
    Status: Open

    Comments: Treasury generally agreed with this recommendation but did not provide specific comments on plans to address it.
    Director: Charlie Jeszeck
    Phone: (202) 512-7215

    5 open recommendations
    including 1 priority recommendation
    Recommendation: To better protect the retirement savings of individuals who change jobs, while retaining policies that provide 401(k) plans relief from maintaining small, inactive accounts, Congress should consider amending current law to permit the Secretary of Labor and the Secretary of the Treasury to identify and designate alternative default destinations for forced transfers greater than $1,000, should they deem them more advantageous for participants.

    Agency: Congress
    Status: Open

    Comments: There has been no congressional action as of 2017.
    Recommendation: To better protect the retirement savings of individuals who change jobs, while retaining policies that provide 401(k) plans relief from maintaining small, inactive accounts, Congress should consider amending current law to repeal the provision that allows plans to disregard amounts attributable to rollovers when determining if a participant's plan balance is small enough to forcibly transfer it.

    Agency: Congress
    Status: Open

    Comments: There has been no congressional action as of 2017.
    Recommendation: To ensure that individuals have access to consolidated online information about their multiple 401(k) plan accounts, the Secretary of Labor should convene a taskforce to consider establishing a national pension registry. The taskforce could include industry professionals, plan sponsor representatives, consumer representatives, and relevant federal government stakeholders, such as representatives from Social Security Administration, Pension Benefit Guaranty Corporation, and Internal Revenue Service, who could identify areas to be addressed through the regulatory process, as well as those that may require legislative action.

    Agency: Department of Labor
    Status: Open
    Priority recommendation

    Comments: In April 2017, The Department of Labor (DOL) reported that it has not allocated any resources to this recommendation and, as previously stated, that it continues to believe that the Department should not undertake to convene a taskforce at this time, in light of the Pension Benefit Guaranty Corporation's (PBGC) initiative, the Department's limited authority, and resource constraints. In October 2016, DOL stated that it does not have regulatory authority to establish a pension registry and could not provide sufficient funding to operate a registry. GAO's recommendation is to convene a taskforce to look at what would be needed to create such a registry. Indeed, DOL's stated constraints are exactly the constructive input that would need to be first addressed by such a taskforce for a registry to be created. The agency further noted that the PBGC is in the process of looking at expanding its own registry of accounts left in closed defined benefit plans to include accounts in 401(k) plans. However, PBGC is only looking at expanding its program, as instructed by the Pension Protection Act, to include accounts left in terminated 401(k) plans. However, in June 2016, Congress proposed that a new national, online, lost and found for Americans' retirement accounts be created, in cooperation with the Commissioner of Social Security and the Secretary of the Treasury, using data that employers are already required to report. Until Congress' proposal becomes law, we continue to recommend that DOL facilitate a taskforce to discuss legal and other logistical questions that would need to be worked out to create a pension registry.
    Recommendation: To ensure that 401(k) plan participants have timely and adequate information to keep track of all their workplace retirement accounts, the Social Security Administration's Acting Commissioner should make information on potential vested plan benefits more accessible to individuals before retirement. For example, the agency could consolidate information on potential vested benefits, currently sent in the Potential Private Retirement Benefit Information notice, with the information provided in the Social Security earnings and benefits statement.

    Agency: Social Security Administration
    Status: Open

    Comments: SSA disagreed with this recommendation, but did seek legal guidance to determine if it is permissible to include a general statement encouraging potential beneficiaries to pursue any external pension benefits in its benefit Statement. SSA's Office of the General Counsel determined that it would be permissible as long as it includes information required by law and the information is accurate. However, SSA continues to believe that adding such information would place SSA in a position to respond to issues or questions about ERISA and private pension plans, which SSA considers to be outside its mission and about which the agency has no firsthand legal or operational knowledge. Also, SSA believes that the current benefit Statement adequately covers the fact that people need other savings, pensions, and investments. Also, SSA sends notices to people who it believes quality for other pensions. In FY17, SSA reported no change in status to this recommendation. We continue to agree with SSA's view about providing information or advice about private pension plans generally. However, SSA's Notice of Potential Private Retirement Benefit Information already directs recipients to contact DOL with any questions, and we would expect that any changes made to make information on potential vested plan benefits more accessible to individuals before retirement - such as including the information in Social Security earnings and benefit statements - would continue to direct recipients to contact DOL with questions about ERISA policy. Furthermore, we continue to believe that individuals should receive information on any potential vested plan benefits prior to retirement.
    Recommendation: To prevent forced-transfer IRA balances from decreasing due to the low returns of the investment options currently permitted under the Department of Labor's safe harbor regulation, the Secretary of Labor should expand the investment alternatives available. For example, the forced-transfer IRA safe harbor regulations could be revised to include investment options currently under the qualified default investment alternatives regulation applicable to automatic enrollment, and permit forced-transfer IRA providers to change the investments for IRAs already established.

    Agency: Department of Labor
    Status: Open

    Comments: As of July 2017, DOL declines to adopt this recommendation. DOL noted if GAO?s comments are interpreted to mean that the recommended safe harbor revisions would free plan fiduciaries from an obligation to make a prudent selection among such a broader range of investment alternatives, then it raises significant policy issues regarding the administration of ERISA?s fiduciary duty provisions. DOL also noted that if, on the other hand, GAO's recommendation would have the safe harbor require the responsible plan fiduciary be responsible for prudently deciding whether to use a higher risk investment alternative, employers and other plan sponsors may oppose such a change. Our recommendation does not comment on or suggest changes to the obligations of plan fiduciaries as part of a change to the safe harbor. Further, GAO has made prior recommendations that DOL clarify the definition of fiduciary for purposes of investment, including a requirement that plan service providers, when assisting participants with distribution options, disclose any financial interests they may have in the outcome of those decisions in a clear, consistent, and prominent manner; the conditions under which they are subject to any regulatory standards (such as ERISA fiduciary standards, SEC standards, or others); and what those standards mean for the participant. Our recommendation is to "expand the investment options available" and we have noted that qualified default investment alternatives could be one option. Previously, DOL has stated that the limited investments under the safe harbor are appropriate because Congress' intent for the safe harbor was to preserve principal transferred out of plans. DOL noted that given the small balances and the inability of absent participants to monitor investments, the current conservative investment options are a more appropriate way to preserve principal. However, the current forced-transfer IRA investment options like money market funds can protect principal from investment risk, but not from the risk that fees (no matter how reasonable) and inflation can result in decreased account balances due to returns on these small balance accounts not keeping pace with fees. The reality has been that many forced-transfer IRAs have experienced very large and even complete declines in principal. Our recommendation did not aim to eliminate any investment alternatives covered by the safe harbor, rather it aims to expand the alternatives available so that plans and providers that want to operate under the safe harbor have the opportunity to choose the most suitable investment. We continue to encourage DOL to expand the safe harbor to include investment alternatives more likely to preserve principal and even increase it over time.
    Director: St James, Lorelei
    Phone: (202) 512-2834

    4 open recommendations
    Recommendation: A key matter for Congress to consider is whether or not to move forward with a USPS health plan that would result in an increase in retirees' use of Medicare. If Congress decides to approve this proposal, then Congress should also weigh the impact on other issues, including safeguards for all USPS health plan fund assets by placing appropriate constraints on their asset allocations, such as limiting investments to Treasury securities and inflation-indexed Treasury securities or, if Congress chooses to permit investments in non-Treasury securities, constraints on the discount rate for prefunding purposes so as not to anticipate returns on risk-bearing assets in excess of those on Treasury securities before such returns have actually been achieved.

    Agency: Congress
    Status: Open

    Comments: As of May 2017, Congress had not enacted legislation that would create a U.S. Postal Service health plan that would result in an increase in retirees' use of Medicare. Therefore, Congress had not fully addressed the impact of safeguards for all USPS health plan fund assets by placing appropriate constraints on their asset allocations. In September 2015, S.2051: Improving Postal Operations, Service, and Transparency Act of 2015 was introduced to the to the U.S. Senate Committee on Homeland Security and Governmental Affairs. The bill requires all Medicare-eligible postal annuitants and employees enrolled in a U.S. Postal Service health plan to also enroll in Medicare, including parts A, B and D. This bill, however, has not yet been approved by the Senate Committee on Homeland Security and Governmental Affairs.
    Recommendation: A key matter for Congress to consider is whether or not to move forward with a USPS health plan that would result in an increase in retirees' use of Medicare. If Congress decides to approve this proposal, then Congress should also weigh the impact on other issues, including standards for the disposition of any surplus health plan assets that reduce the risk of a new unfunded liability emerging in the future, standards such as amortizing any surplus to mirror the amortization of any unfunded liability, or using any surplus to offset normal cost payments.

    Agency: Congress
    Status: Open

    Comments: As of May 2017, Congress had not enacted legislation that would create a U.S. Postal Service health plan that would result in an increase in retirees' use of Medicare. Consequently, Congress has not fully addressed the issue of standards for the disposition of any surplus health plan assets that reduce the risk of a new unfunded liability emerging in the future, such as amortizing any surplus to mirror the amortization of any unfunded liability, or using any surplus to offset normal cost payments.
    Recommendation: A key matter for Congress to consider is whether or not to move forward with a USPS health plan that would result in an increase in retirees' use of Medicare. If Congress decides to approve this proposal, then Congress should also weigh the impact on other issues, including designation or creation of an independent entity responsible for the selection of actuarial assumptions used to annually determine the funded status of USPS's health plan for purposes of determining prefunding payments.

    Agency: Congress
    Status: Open

    Comments: As of May 2017, Congress had not enacted legislation that would create a U.S. Postal Service health plan that would result in an increase in retirees' use of Medicare. Consequently, Congress has not fully addressed the designation or creation of an independent entity responsible for the selection of actuarial assumptions used to annually determine the funded status of USPS's health plan for purposes of determining prefunding payments.
    Recommendation: A key matter for Congress to consider is whether or not to move forward with a USPS health plan that would result in an increase in retirees' use of Medicare. If Congress decides to approve this proposal, then Congress should also weigh the impact on other issues, including protections for postal employees and retirees that are comparable to those under FEHBP, including a formula for USPS retirees' contribution to the costs of their health coverage.

    Agency: Congress
    Status: Open

    Comments: As of May 2017, Congress had not enacted legislation that would create a U.S. Postal Service health plan that would result in an increase in retirees' use of Medicare. Consequently, Congress has not fully addressed the issue of protections for postal employees and retirees that are comparable to those under FEHBP, including a formula for USPS retirees' contribution to the costs of their health coverage.
    Director: Jeszeck, Charles A
    Phone: (202) 512-7215

    4 open recommendations
    Recommendation: To enhance understanding and better inform debate on the possible effects of moving to a more risk-based premium structure, during consideration of various redesign options and after a redesign may be authorized, the Director of PBGC should continue to develop PBGC's hypothetical model, analyzing various premium redesign options and their impacts on sponsors, and report the results to Congress. As part of these analyses, PBGC should evaluate the potential effects on sponsors of incorporating additional risk factors, such as company financial health and plan investment mix, and include an assessment to identify any potentially disproportional hardships on smaller companies that may result from the redistribution of higher rates to riskier sponsors.

    Agency: Pension Benefit Guaranty Corporation
    Status: Open

    Comments: PBGC agreed with this recommendation. The agency is committed to continued development of the databases, models, and analyses of various premium redesign options and their impacts on sponsors, and to report the results of these analyses to Congress. In April 2014, PBGC noted that its efforts are still in process. As of August 2015, PBGC had provided no additional updates on actions taken on this recommendation.
    Recommendation: To help strengthen the PBGC insurance program, Congress should authorize redesign of PBGC's premium structure to more fully reflect the risk posed by plans and sponsors to the agency, such as by providing for the incorporation of additional risk factors.

    Agency: Congress
    Status: Open

    Comments: In July 2012 and December 2013, Congress passed premium increases (P.L. No. 112-141 and P.L. 113-67, respectively) to better reflect the risk posed to the Pension Benefit Guaranty Corporation by certain defined benefit pension plans and plan sponsors. Nevertheless, As of September 2015, Congress had yet to authorize a redesign of PBGC's premium structure.
    Recommendation: In addition, to improve PBGC's ability to collect key information that may be necessary to help the agency estimate its risk exposure to future claims and strengthen implementation of any changes to the premium structure, Congress should provide PBGC with access to additional information needed to assess risk and assist in setting premiums, such as by expanding the criteria requiring plan sponsors to report under section 4010 of ERISA.

    Agency: Congress
    Status: Open

    Comments: As of September 2015, Congress has taken no action related to this matter.
    Recommendation: Moreover, to better understand the mechanics of how best to incorporate additional risk factors, improve transparency, and help inform the evaluation of the various redesign options, Congress should establish an independent premiums advisory committee reflecting a range of perspectives--including, for example, representatives from federal agencies, sponsors, actuaries, private insurers, and labor groups--to assist with such activities as developing the mechanics for incorporating additional risk factors and implementing new rates, as well as delineating a variety of alternative methods to address PBGC's deficit.

    Agency: Congress
    Status: Open

    Comments: As of September 2015, Congress has taken no action related to this matter.