GAO Reports on 403(b) Plans
The Government Accountability Office (GAO) has released a report titled “403(b) Retirement Plans: Department of Labor Should Update Educational Materials to Better Inform Plan Sponsors and Participants”. The study was convened to review the extent of federal agencies’ 403(b) plan oversight, actions by selected states that could improve participant outcomes, and options stakeholders and experts have identified that could improve participant outcomes. Findings of the report were directed to ranking member of the House Committee on Education and the Workforce, Representative Bobby Scott (D-VA).
GAO noted in its findings that while the Department of Labor provides guidance and educational materials that help 401(k) plan sponsors and participants make informed decisions, the agency does not provide the same level of detailed information regarding 403(b) plans. GAO recommended that the Secretary of Labor should update educational materials provided on the agency’s 403(b) website to better enable plan sponsors and participants to understand such things as plan fees.
While the lengthy report contemplates various actions by states and stakeholders to improve participant outcomes – such as centralizing administration and limiting service providers, implementing fiduciary duties, standardizing disclosures, expanding investment options, and allowing automatic enrollment in non-ERISA 403(b) plans, no other formal recommendations were made.