For its report, “Private Pensions: Clarity of Required Reports and Disclosures Could Be Improved,” GAO examined the system of reporting and disclosure that sponsors of private sector pension plans are required to provide to the Department of Labor (DOL), the Internal Revenue Service and the Pension Benefit Guaranty Corporation, as well as numerous disclosures to plan participants.The findings fell into two main areas. First, the clarity of communications to plan sponsors needs to be improved. The findings indicate the Employee Retirement Income Security Act (ERISA) technically asks that at least 130 reports and disclosures be made by plan sponsors to relevant government agencies. In reality, however, plan sponsors are required to submit only some of these reports and disclosures. Even so, determining just what submissions are required can be difficult, since the online resources of these agencies to aid plan sponsors with this task are neither comprehensive nor up to date.
Second, communications to participants need to be clearer. The report shows participant disclosures sent by plan sponsors are numerous and do not always effectively communicate the information. Feedback received by the GAO indicates plan participants often find the content overwhelming and confusing.
As a result of report findings, the GAO recommends that Congress consider shifting responsibility and necessary resources to the DOL for managing the pension benefit data provided to retirees, particularly the data from the Social Security Administration. The GAO also recommends that the ERISA-relevant agencies improve their online tools on reporting requirements and make disclosures easier to understand. According to the GAO, these agencies generally agreed with the findings and are taking steps to address the issues.
More information about the report, including how to download highlights or the full text, can be found here.