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    Results:

    Subject Term: Retirees

    8 publications with a total of 35 open recommendations including 2 priority recommendations
    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 A. Jeszeck
    Phone: (202) 512-7215

    1 open recommendations
    Recommendation: To help workers make appropriate adjustments to the replacement rates used in calculating their specific retirement income needs, the Secretary of Labor should modify its retirement planning tools to allow for some user flexibility in adjusting the replacement rate used in calculating retirement income needs.

    Agency: Department of Labor
    Status: Open

    Comments: Department of Labor (DOL) officials told us that the agency has updated the instructions to add more information on common situations that would impact a worker's replacement rate. DOL officials also said the department is in the process of developing expanded options for the target saving rate worksheet/calculator. They said this would include identifying the data points needed from the user and adjustments to the user interface (to keep it user friendly) as well as the underlying calculations needed to provide alternative replacement rates within a generally acceptable range. Allowing workers to adjust the replacement rates used when calculating their retirement income needs would help workers better estimate what their individual planning needs may be. We will consider closing this recommendation when this effort has been completed.
    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: Yvonne D. Jones
    Phone: (202) 512-2717

    2 open recommendations
    Recommendation: To improve OPM's assistance to agencies and management of its dual compensation waiver program, the Director of OPM should analyze dual compensation waivers to identify trends that can inform OPM's human capital management tools.

    Agency: Office of Personnel Management
    Status: Open

    Comments: According to an OPM official, the agency has established and implemented a standard method for captioning dual compensation files. In addition, according to this official, OPM has provided training to staff who routinely create and access these case files within the agency's document management system. We discussed OPM's efforts on this issue several times during 2016 and will continue to monitor OPM's efforts to analyze these waivers.
    Recommendation: To improve OPM's assistance to agencies and management of its dual compensation waiver program, the Director of OPM should establish policies and procedures for documenting the dual compensation waiver review process.

    Agency: Office of Personnel Management
    Status: Open

    Comments: According to an OPM official, the agency has established and implemented a standard method for captioning dual compensation files. In addition, according to this official, OPM has provided training to staff who routinely create and access these case files within the agency's document management system. We discussed OPM's efforts on this issue several times during 2016 and will continue to monitor whether OPM will use the new captioning procedures.
    Director: Jeszeck, Charles A
    Phone: (202) 512-7215

    6 open recommendations
    Recommendation: To increase the accuracy of "potential private pension benefit information" notices that SSA sends to Social Security claimants, Congress should consider legislation shifting responsibility and necessary resources to Labor for (a) electronically collecting form 8955-SSA information on participants' deferred vested benefits, (b) maintaining an accurate federal database of those benefits, and (c) periodically sending SSA accurate information about such benefits for recent Social Security claimants identified by SSA, so that SSA may provide notices to retirees.

    Agency: Congress
    Status: Open

    Comments: As of September 2017, no congressional action has been taken in response to this recommendation.
    Recommendation: To ease the burden on plan sponsors, enhance compliance, and help ensure that disclosures to participants are written in a manner that can be understood by the average participant, Labor, IRS, and PBGC should work together to create and regularly update a comprehensive online tool for plan sponsors to search for the reports and disclosures they are required to provide based on plan type, design, and circumstances.

    Agency: Department of Labor
    Status: Open

    Comments: In November 2013, Labor officials said that they would consult with their colleagues at the Treasury Department/IRS and PBGC regarding creation of one unified online tool for plan adminstrators to search for the reports and disclosures they are required to submit based on a plan's type, design, and circumstances. However, in FY 2014, officials indicated that, although they will continue to consult with their other agency colleagues regarding creation of such a tool, they now tentativley disagree with the recommendation and believe that such a tool could be confusing, especially for small employers. In 2015, Labor raised concerns about this recommendation, continuing to question whether a unified tri-agency online tool would be valuable for sponsors of large pension plans and may be confusing to some plan sponsors, especially small employers. They further noted that they do not believe it would be appropriate for EBSA to adjust its regulatory or guidance priorities at this time or reallocate resources currently dedicated to other priority projects in order to further explore any possible merit of such an online tool. GAO continues to believe just the opposite, that a well-designed comprehensive online tool could be very helpful, especially for small employers. In FY 17, Labor reiterated its opinions from previous years.
    Recommendation: To ease the burden on plan sponsors, enhance compliance, and help ensure that disclosures to participants are written in a manner that can be understood by the average participant, Labor, IRS, and PBGC should work together to create and regularly update a comprehensive online tool for plan sponsors to search for the reports and disclosures they are required to provide based on plan type, design, and circumstances.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS officials initially noted that they are continuing their efforts to ensure that plan sponsors have access to comprehensive and up-to-date online resources. They said they had met with Labor and PBGC officials to discuss the value and feasibility of developing and maintaining a comprehensive online tool. However, with decreased resources, they believe it is unlikely for the agency to create and regularly update such a tool. However, they would continue to confer with Labor and PBGC colleagues to determine if it is possible to cross-reference existing agency resources online. As of September 2017, IRS has not provided an update on its efforts. GAO continues to believe that such a tool would be beneficial to plan sponsors of all sizes.
    Recommendation: To ease the burden on plan sponsors, enhance compliance, and help ensure that disclosures to participants are written in a manner that can be understood by the average participant, Labor, IRS, and PBGC should work together to define criteria for complying with the readability provisions in ERISA and the Internal Revenue Code (IRC), and apply the criteria to agency-generated model notices as well as those developed by plan sponsors. As part of these criteria, consider requiring clear, simple, brief highlights at the beginning of disclosures, reflecting federal plain language guidelines.

    Agency: Department of Labor
    Status: Open

    Comments: Labor officials stated that, while sensitive to plan sponsor concerns regarding liabilities that may result from ambiguities that arise when complex information is summarized using plain English criteria, they will, nevertheless, explore the application of readability standards in this context. Officials indicated they may decide it would be helpful to engage a contractor and undertake a survey or other data collection in order to evaluate this recommendation, but do not have resources budgeted in FY 2014 for such an exercise. In the meantime, they plan to continue to use modern communication techniques (such as focus group testing) to improve the effectiveness of their model notices and other standardized disclosures. In 2015, Labor reported that they need to explore the application of readability standards in light of concerns about liabilities that may result from ambiguities when complex information is summarized or presented using "plain English" criteria. Contracting for data collection would help them make an informed evaluation of this recommendation but they do not have the budgeted resources and believe it would not be appropriate to adjust priorities or reallocate resources. They will use techniques such as focus group testing to improve the effectiveness model notices and other standardized disclosures. GAO continues to believe it is important to implement a requirement to have clear, simple, brief highlights. In FY 17, Labor noted that the agency had not yet made a decision regarding future rulemaking and had suggested that the ERISA advisory counsel look at the effectiveness of disclosures.
    Recommendation: To ease the burden on plan sponsors, enhance compliance, and help ensure that disclosures to participants are written in a manner that can be understood by the average participant, Labor, IRS, and PBGC should work together to define criteria for complying with the readability provisions in ERISA and the Internal Revenue Code (IRC), and apply the criteria to agency-generated model notices as well as those developed by plan sponsors. As part of these criteria, consider requiring clear, simple, brief highlights at the beginning of disclosures, reflecting federal plain language guidelines.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS officials said that they are committed to using the Federal Plain Language Guidelines as a resource in preparing model disclosures and that they will consider including brief highlights at the beginning of model disclosures. They said that it is unclear that imposing defined readability criteria on employer and plan communications is in the best interests of plan participants, administrators, sponsors, and the retirement system as a whole. However, they do see merit in directing employers and plan sponsors to the Guidelines as a resource for developing readable notices and disclosures, and are considering how best to communicate that resource to stakeholders. As of September 2017, IRS has not provided an update on these efforts.
    Recommendation: To better ensure plan participants have access to information about their rights and benefits, as currently in force under their plans, Labor should direct plan sponsors to post to any intranet website maintained by the employer, as soon as determined feasible by Labor, a copy of the most current summary plan description (SPD) and any summary of material modifications issued subsequent to that SPD.

    Agency: Department of Labor
    Status: Open

    Comments: Labor officials said that they generally support implementing such a requirement, subject to a legal determination of their authority absent legislation to issue such a directive. However, rather than addressing the recommendation as a stand-alone item, they believe it would be better to consider the benefits of such an intranet posting requirement in connection with efforts to expand or modify disclosure standards in response to their 2011 Request for Information (RFI) regarding electronic disclosure. Moreover, officials noted that, during FY 2014, Labor was focusing its regulatory resources on other higher priority projects and did not have a specific timeline for any next action on e-disclosure issues. In their 2015 response, Labor reiterated their agreement from agency comments. Based on comments from their RFI, they understand that many plan sponsors, especially those that have intranet websites, already post plan-related information for employees and that input from consumer advocates that have expressed concern about replacing employees? paper disclosure rights under ERISA with internet access. Labor has not added an e-disclosure project to its regulatory agenda but is still focusing its regulatory resources on other higher priority projects. GAO continues to believe that this is an important pursuit. In FY 17, Labor stated that they do not have any specific timeline for actions on e-disclosures.
    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.