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Open Recommendations

401(k) Retirement Plans: Many Participants Do Not Understand Fee Information, but DOL Could Take Additional Steps to Help Them

GAO-21-357
Aug 26, 2021
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5 Open Recommendations
Agency Affected Recommendation Status
Employee Benefits Security Administration The Assistant Secretary of the Employee Benefits Security Administration should require, in a manner deemed effective, that fee disclosures for participant-directed individual retirement accounts use a consistent term for asset-based investment fees (e.g. gross expense ratio). (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Employee Benefits Security Administration The Assistant Secretary of the Employee Benefits Security Administration should require, in a manner deemed effective, that quarterly fee disclosures for participant-directed individual retirement accounts provide participants the actual cost of asset-based investment fees paid. (Recommendation 2)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Employee Benefits Security Administration The Assistant Secretary of the Employee Benefits Security Administration should take steps to provide participants important information concerning the cumulative effect of fees on savings over time. For example, steps could include ensuring disclosures cite a working, specific DOL web address for where such information is shown and requiring that fee disclosures include the agency's graphic illustration on the cumulative effect of fees. (Recommendation 3)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Employee Benefits Security Administration The Assistant Secretary of the Employee Benefits Security Administration should require, in a manner deemed effective, that participant fee disclosures for participant-directed individual retirement accounts include fee benchmarks for in-plan investment options. (Recommendation 4)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Employee Benefits Security Administration The Assistant Secretary of the Employee Benefits Security Administration should require, in a manner deemed effective, that participant fee disclosures for participant-directed individual retirement accounts include ticker information for in-plan investment options, when available. (Recommendation 5)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Retirement Savings: Federal Workers' Portfolios Should Be Evaluated For Possible Financial Risks Related to Climate Change

GAO-21-327
Jun 24, 2021
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1 Open Recommendations
Agency Affected Recommendation Status
Federal Retirement Thrift Investment Board The Executive Director of the Federal Retirement Thrift Investment Board, to better inform the Board's ongoing oversight activities, should evaluate TSP's investment offerings in light of risks related to climate change.
Open
FRTIB did not indicate whether it agreed or disagreed with this recommendation. FRTIB noted that it subscribes to a strict indexing discipline and that the efficient market theory concludes that the market is pricing all risks into its valuation on an on-going basis. FRTIB stated that its next investment consultant review is planned for fiscal year 2022 and that it would review any recommended changes to its fund offerings at that time. FRTIB further stated that it would examine any recommendations made by the U.S. Securities Exchange Commission and the Federal Stability Oversight Commission on climate change-related risks and determine whether and how to apply those lessons to the TSP. GAO recognizes FRTIB's established process for evaluating TSP's investment options. Its 2022 review is an opportunity for FRTIB to conduct a focused evaluation of these risks and clarify what additional steps, if any, are needed. Given the systemic and unprecedented risk that climate change is expected to have on global financial markets, GAO continues to believe that it is important for FRTIB to evaluate TSP's investment offerings for these risks. While FTRIB stated that its upcoming mutual fund window would provide TSP participants with an opportunity to invest beyond the five core funds, the mutual fund window does not address the potential climate change-related risks to TSP's core investment funds. Examining climate change-related risks facing TSP's $700 billion in assets under management would provide FRTIB with a greater understanding of its potential exposure to these risks and enable it to decide if any further actions are necessary to protect the retirement savings of over 6 million federal workers

Defined Contribution Plans: Federal Guidance Could Help Mitigate Cybersecurity Risks in 401(k) and Other Retirement Plans

GAO-21-25
Mar 15, 2021
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2 Open Recommendations
Agency Affected Recommendation Status
Department of Labor The Secretary of Labor should formally state whether cybersecurity for private sector employer-sponsored defined contribution retirement plans is a plan fiduciary responsibility under ERISA. (Recommendation 1)
Open
DOL neither agreed nor disagreed. The agency stated that plan fiduciaries must act prudently and solely in the interest of plan participants and beneficiaries, and that these duties require plan fiduciaries to take appropriate precautions to mitigate risks of malfeasance to their plans, whether cyber or otherwise. DOL also cited existing regulations on electronic records and electronic disclosures that include provisions to ensure systems are safe and personal information is protected. While these regulations are important, we believe making a formal statement will help ensure that plan fiduciaries are clear on their responsibility to mitigate cybersecurity risk in private sector employer-sponsored DC retirement plans to better protect PII and plan assets. Without such a formal statement, retirement plan administrators may not be aware of this fiduciary obligation.
Department of Labor The Secretary of Labor should develop and issue guidance that identifies minimum expectations for mitigating cybersecurity risks that outline the specific requirements that should be taken by all entities involved in administering private sector employer-sponsored defined contribution retirement plans. (Recommendation 2)
Open
DOL agreed that increasing awareness of fiduciaries' duties under ERISA with respect to cybersecurity would be helpful. DOL stated it is drafting compliance assistance materials to help (1) increase awareness among plan fiduciaries of DOL's position on cybersecurity risk mitigation and (2) ensure that fiduciaries satisfy their ERISA obligations when selecting and monitoring service providers. We acknowledge these efforts, however, DOL should also identify minimum expectations for mitigating cybersecurity risks for all entities involved in the administration of DC plans. GAO believes that fully implementing this recommendation will provide assurances to the agency, and to DC plan participants and beneficiaries, that PII and plan asset data are being adequately and consistently protected in DC retirement plans.

Elder Justice: HHS Could Do More to Encourage State Reporting on the Costs of Financial Exploitation

GAO-21-90
Jan 19, 2021
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2 Open Recommendations
Agency Affected Recommendation Status
Administration for Community Living The Administrator of ACL should work with state APS agencies to develop data fields on the costs of financial exploitation to add to NAMRS to encourage more states to collect these data. This could be achieved, for example, during the stakeholder engagement process ACL is undertaking to discuss potential updates for the NAMRS system. (Recommendation 1)
Open
HHS disagreed with this recommendation. HHS stated it could not guarantee that data elements capturing the cost of financial exploitation would be recommended for inclusion in NAMRS during the next renewal process. It noted that NAMRS is a voluntary data system and that HHS must consider the reporting burden on the state agencies of adding data fields to the system. We understand that HHS must consider the reporting burden on state agencies and cannot guarantee the inclusion of cost data elements in NAMRS. However, some state agencies are already collecting these cost data, and by requesting this information in NAMRS, HHS could move states towards collecting this information more routinely and in more standardized ways. The agency plans to begin a stakeholder engagement process for NAMRS renewal in FY21. The agency expects this process could result in updating or adding data elements to NAMRS based on input from stakeholders, balancing what would be valuable for understanding adult maltreatment with what is feasible for APS to collect and report with reasonable burden. This stakeholder engagement process is a valuable opportunity to engage with state APS agencies as well as other important stakeholders to consider whether to add new data elements to NAMRS about the cost of financial exploitation in the coming years. We continue to believe that working with states to add data elements to NAMRS to capture the cost of financial exploitation would help to determine the scope and magnitude of financial exploitation nationwide-currently a critical gap in knowledge about the costs of financial exploitation.
Administration for Community Living The Administrator of ACL should develop a timeframe to share information and tools that state APS agencies have developed to collect cost information with other states, to provide states with strategies they can use to improve data collection on financial exploitation costs. This could be achieved, for example, by leveraging ACL's existing resource centers such as the APS Technical Assistance Resource Center or the National Center on Elder Abuse to disseminate this information to states. (Recommendation 2)
Open
HHS agreed with this recommendation. The agency stated that it would consider ways to conduct these information sharing activities in fiscal year 2022, when it enters into new contracts with its existing resource centers. We will monitor the agency's progress to address this recommendation.
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