Congress’ watchdog agency apparently thinks so. That was one of the recommendations in a newly released report by the Government Accountability Office (GAO).
A “pension dashboard” could be useful in the United States to help participants track their retirement savings when they change jobs, but Congress would need to authorize a federal agency to establish and oversee such a dashboard. It also would have to give the agency the authority to consolidate retirement account information, the GAO stated in its report—“401(k) Plans: Additional Federal Actions Would Help Participants Track and Consolidate Their Retirement Savings.”
GAO was asked to review, among other things, the challenges that 401(k) plan participants have in keeping track of their retirement savings, as well as the challenges they have in rolling over their savings from one plan to another and federal actions that can improve the process.
In fact, this issue is not new, as the dashboard concept was raised in late 2020 in a white paper (A Retirement Dashboard for the United States) by authors David John of the AARP Public Policy Institute, Grace Enda of the Urban-Brookings Tax Policy Center, and William Gale and J. Mark Iwry of the Brookings Institution who called for the creation of a retirement dashboard to help savers better manage and keep track of their savings.
Other Countries Do It
As part of its examination, GAO looked at how six selected countries—Australia, Belgium, Denmark, the Netherlands, Norway and Sweden—help retirement plan participants manage their savings. It found that all six countries use pension dashboards and other approaches to help plan participants track, manage and consolidate their plan savings.
For example, all six countries established a centralized pension dashboard that allows participants to view their retirement savings securely online and at no charge. What’s more, to increase the likelihood that participants' savings will be consolidated after a job change, three of the six selected countries allow automatic savings transfers, according to experts GAO interviewed. For example, Australia, Norway, and the Netherlands allow a participant's inactive retirement plan savings from older workplace plans to be transferred to the participant's current plan without the participant's consent.
In Australia, plan providers must transfer savings from small inactive accounts to a government agency. The agency then holds the savings until the participant claims it, after which the agency transfers the balance to an active account, or the participant is eligible to receive the savings. GAO noted that Australian officials said close to 4.7 million accounts valued at about $4.6 billion have been reunited with participants between late 2019 and the end of 2022.
U.S. Experience
Meanwhile, with 401(k) participants in the U.S. continuing to face challenges tracking and consolidating their accounts, GAO contends that federal action could mitigate these issues. This is a particularly acute issue, as federal data show that more than 92 million Americans participate in and have saved more than $7 trillion in 401(k) plans.
The concept is also of interest to participants. According to a GAO survey of 401(k) participants, two-thirds would find a comprehensive pension dashboard to be a useful resource. However, no federal agency has statutory authority to establish one.
The survey also found that 401(k) participants who recently completed a plan-to-plan rollover faced challenges understanding and complying with their plans' requirements. GAO notes, for example, that 25% of participants indicated that there were too many steps to follow in the process and 22% said they were unclear about questions or information in the rollover form. But like a pension dashboard, GAO similarly notes that no federal agency has the statutory authority to establish a system to facilitate automatic plan-to-plan rollovers.
GAO’s Recommendations
Consequently, GAO recommends that Congress grant authority to a federal agency to develop and oversee a comprehensive pension dashboard that can provide participants’ information to them in one location. GAO notes this “would reduce the burden on plan sponsors and providers, who must otherwise track or manage lost accounts or missing participants.”
The report also suggests that DOL and IRS establish a system to facilitate automatic plan-to-plan rollovers to help participants maintain consolidated savings as they change jobs. GAO also recommended that the government (PBGC, Labor and Treasury) help 401(k) participants by improving the information they receive about options for their plan savings and the process they must undergo to consolidate their savings after changing jobs.
In its written response, DOL stated that it would consider actions related to GAO’s disclosure recommendation to ensure participants “receive easily understandable, timely, and comprehensive information.” DOL also noted that it is engaged in joint agency efforts and that it would be appropriate for them to consider the 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.
To be sure, GAO does acknowledge that provisions in SECURE 2.0 will help “mitigate challenges” facing participants, but not all participants may benefit as the legislation addressed specific issues. For example, the creation of the Retirement Savings Lost and Found should make it easier for participants to claim their benefits from an inactive plan by providing participants with contact information about their plan administrator. Similarly, the Internal Revenue Code exemption for certain automatic portability transactions can help participants with small account balances subject to force-transfer IRAs consolidate their savings into their new plan.
“While the SECURE 2.0 Act will lead to improvements, participants—especially those who are unengaged with their accounts—could benefit from additional mechanisms that could help them grow their savings,” the GAO said in concluding remarks.
