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Open Recommendations

401(k) Plans: Additional Federal Actions Would Help Participants Track and Consolidate Their Retirement Savings

GAO-24-103577
Feb 20, 2024
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6 Open Recommendations
Agency Affected Recommendation Status
Pension Benefit Guaranty Corporation The Director of the PBGC should assess and report to Congress on the feasibility of amending current law to allow active 401(k) plans to transfer small inactive account balances subject to forced-transfers to the PBGC's program, currently known as the Missing Participants Program for terminated defined contribution plans. (Recommendation 1)
Open
PBGC agreed with this recommendation and anticipates completing a study before 2025 and would consult with other agencies-including DOL, Treasury, and IRS-specifically on their ongoing work to implement related provisions enacted as a part of the SECURE 2.0 Act. We will monitor the agency's progress on these efforts.
Department of Labor The Secretary of Labor should take action to implement the ERISA Advisory Council's 2016 recommendation by issuing a Request for Information to explore how the agency can encourage and support the adoption of secure electronic data standards to facilitate the processing of plan-to-plan rollovers. (Recommendation 2)
Open
DOL stated that it may be premature to assess whether or how it should act on this recommendation before Treasury issues its guidance on rollovers by January 1, 2025, as required under the SECURE 2.0 Act. We note in our report that Treasury's upcoming guidance can help standardize rollovers. However, if Treasury's guidance does not address the development of a system based on secure electronic data standards to facilitate efficient plan-to-plan rollovers, DOL should take action. DOL also stated that as part of its current work to implement a statutory prohibited transaction exemption for "automatic portability providers" under the SECURE 2.0 Act, it is considering proposing possible standards for such providers of IRA-to-plan rollovers to safeguard portability data and remedy potential security breaches. We commend this approach and believe that an initiative to develop secure standards to safeguard data for automatic IRA-to-plan rollovers would be enhanced if conducted alongside a Request for Information for secure electronic data standards for plan-to-plan rollovers. Without continued progress towards developing secure electronic standards to facilitate efficient plan-to-plan rollovers, participants will likely continue to find the process challenging and may avoid consolidating their savings altogether. We will monitor the agency's progress on this recommendation.
Department of the Treasury The Secretary of the Treasury should take action, such as amending the 402(f) Notice requirements and Model Notice, or providing clarifying information to the Notice to: (1) include clear information about participants' option to leave their savings in their old plan; (2) provide clearer and more concise information on each of the four distribution options and their associated tax consequences; and (3) address the timing requirements for plans to provide the 402(f) Notice, to ensure the Notice is provided to participants when they leave their job and become eligible to take a distribution. (Recommendation 3)
Open
Treasury stated that an update to the 402(f) Notice is currently in process and will reflect legislation and guidance issued since the last update. However, regarding the part of the recommendation that address the timing requirements for plans to provide the 402(f) Notice, Treasury stated that there is no statutory authority to require a notice to a participant upon separation from service. Our recommendation states that Treasury should take action to address the timing issue; and Treasury can seek any venue it deems appropriate, including seeking statutory authority from Congress to address the timing. Without such action, Treasury will continue to miss an opportunity to ensure that participants are receiving easily-understandable information about all distribution options-at the point in time when a participant is facing an important decision about their retirement savings. We will monitor the agency's action.
Department of Labor The Secretary of Labor should ensure that plan participants, at the time they leave their job and become eligible to take a retirement plan distribution, receive easily-understandable information about all four distribution options and their associated tax consequences. Actions that could be taken include implementing the ERISA Advisory Council's 2015 recommendation, exploring a joint-agency effort with Treasury to update the 402(f) Notice, or other steps that would help plans develop clear and concise communications to inform participants. (Recommendation 4)
Open
DOL stated that it would consider two actions to address this recommendation. DOL stated that it is engaged in joint agency efforts and that it would be appropriate for them to consider our recommendation as part of such efforts with Treasury, IRS, and PBGC, as required under the SECURE 2.0 Act. Under the act, the agencies are to study, analyze, and report to Congress on the effectiveness of their reporting and disclosure requirements before the end of 2025. We agree that the forthcoming joint-agency study can lead to improvements in reporting and disclosure requirements for plans and participants across a range of retirement issues and encourage DOL to continue these efforts. In addition, DOL noted that the SECURE 2.0 Act directs them to issue regulations requiring plans to provide advanced notice to participants who are permitted to take lump sum distributions with specified information to help them compare other distribution options and the potential consequences of taking a lump sum. DOL stated that it will consider our recommendation to ensure participants receive easily understandable, timely, and comprehensive information as part of that work. By doing so, DOL can help ensure participants understand all their distribution options and make more informed decisions about their retirement savings after separating from their employer. We will monitor the agency's efforts.
Congress Congress should consider enacting legislation to assign and grant authority to a federal agency to establish and oversee a secure website, commonly known as a pension dashboard, that allows plan participants to view in one place information about all of their employer-sponsored retirement savings plans. (Matter for Consideration 1)
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As of February 2024, Congress has taken no action on this matter.
Congress Congress should consider legislative amendments to assign and grant authority to DOL and IRS to establish an electronic plan-to-plan rollover system that, when an individual changes jobs, automatically transfers the savings from their old employer-sponsored retirement account plan to their new employer's plan (provided that their new plan accepts rollovers and that individuals can opt-out). (Matter for Consideration 2)
Open
As of February 2024, Congress has taken no action on this matter.

Railroad Retirement Board: Agency Could Strengthen Plans to Address Key Management Challenges

GAO-24-105545
Dec 07, 2023
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2 Open Recommendations
Agency Affected Recommendation Status
Railroad Retirement Board The Board should develop a written plan detailing how it will implement the remaining unimplemented and partially implemented essential elements and key practices of its enterprise risk management process. The plan should include measurable goals, a timeline, and milestones for completing the remaining essential elements and key risk management practices. (Recommendation 1)
Open
RRB agreed with this recommendations and stated that it will develop a written plan for completing ERM implementation and update its IT modernization plans, both by June 30, 2024. RRB also said that it would include milestones for the completion of ERM implementation. We will monitor the agency's progress on these efforts.
Railroad Retirement Board The Board should ensure written plans clearly state the intended results of IT modernization, including the future IT self-service capabilities it will create, how it will address any related gaps or interdependencies, and how it will measure the success of its IT modernization effort, including performance metrics and goals. (Recommendation 2)
Open
RRB agreed with this recommendations and stated that it will include ways to measure the success of its IT modernization in its plans. We will monitor the agency's progress on these efforts.

Retirement Plans: Improved Communication Needed on Church Plan Eligibility for Federal Insurance Coverage

GAO-23-105080
Oct 27, 2023
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1 Open Recommendations
Agency Affected Recommendation Status
Pension Benefit Guaranty Corporation The Director of the Pension Benefit Guaranty Corporation should direct the agency to preemptively communicate with any defined benefit plan that appears to be sponsored by a church or controlled by or associated with a church organization and that is reporting on the Form 5500 and paying benefit insurance premiums, to provide the plan sponsor information describing requirements applicable to governing church plans. This could include actions such as informing these sponsors that their plan may be a church plan as described in the Employee Retirement Income and Security Act of 1974, as amended, and that if found to be a church plan, that refunds are only available for 6 years of premium payments. PBGC also could refer these sponsors to the PBGC website's guidance on benefit insurance coverage, and could suggest these sponsors share this information with participants and seek professional advice about the legal status of their plan. (Recommendation 1)
Open
PBGC agreed with this recommendation. PBGC said it would provide letters by January 31, 2024 to the church plans. The letters will: (1) note that this is sent pursuant to this recommendation, (2) advise that, because the plan name contains a key word used by GAO - e.g., "church,", temple", etc., there are concerns the plan may be a church plan, and (3) refer the sponsors to the IRS website providing guidance on church plans and instructions for requesting a church plan ruling. PBGC also said it will annually review new premium filers and provide letters to those who have one of the key words and cannot be eliminated based on one of the six criteria. We will assess PBGC's analysis as part of the agency's response to this recommendation.

Social Security Administration: Remote Service Delivery Increased during COVID-19, but More Could Be Done to Assist Vulnerable Populations

GAO-23-104650
Nov 17, 2022
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5 Open Recommendations
1 Priority
Agency Affected Recommendation Status
Social Security Administration The Commissioner of SSA should develop a plan—with clear steps, goals, metrics, and timelines—to evaluate the feasibility of obtaining additional race and ethnicity data from other state and federal entities in support of its Equity Action Plan goals. (Recommendation 1)
Open
SSA agreed with this recommendation. We await the agency's plans to address it and will monitor their progress.
Social Security Administration
Priority Rec.
The Commissioner of SSA should develop a plan—with clear steps, goals, metrics, and timelines—for enabling claimants to apply for Supplemental Security Income (SSI) benefits online. (Recommendation 2)
Open
SSA agreed with this recommendation. As of May 2023, we await the agency's plans to address it and will monitor its progress.
Social Security Administration The Commissioner of SSA should evaluate the feasibility of making online Spanish applications available again for those SSA benefit programs with existing online applications. (Recommendation 3)
Open
SSA agreed with this recommendation. We await the agency's plans to address it and will monitor their progress.
Social Security Administration The Commissioner of SSA should implement a coordinated process for assessing lessons learned from the COVID-19 pandemic that includes documentation and dissemination, implementation of corrective action, and incorporation into future contingency planning. (Recommendation 4)
Open
SSA agreed with this recommendation. We await the agency's plans to address it and will monitor their progress.
Social Security Administration The Commissioner of SSA should develop an agency-wide plan for managing anticipated increases in SSA's disability workloads. (Recommendation 5)
Open
SSA agreed with this recommendation. We await the agency's plans to address it and will monitor their progress.