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Researchers : Private Pensions: Participants Need Information on Risks They Face in Managing Pension Assets at and during Retirement
Complete Description:In this report, GAO's objectives were to determine: (1) what benefit payout options and accompanying information pension plans make available to participants at retirement, (2) what benefit payouts plan participants receive at retirement, and (3) the actions available to help retiring participants preserve their pension and retirement savings plan assets. GAO found that defined benefit (DB) plans make annuities available to all participants at retirement, while defined contribution (DC) plans make lump sums available to almost all participants. In general, plans provided applicable notices on benefit payouts and saving, but not other relevant risks or considerations. According to GAO’s analysis, while 60 percent of recent retirees received annuities, an increasing percentage from 1992 to 2000 directly rolled over lump sum benefits into an individual retirement account or deferred their receipt by leaving these assets in the plan. Additionally, GAO found that a growing percentage of those retirees who reported having a choice of benefit payouts chose to directly roll over their lump sum benefits or leave benefits in the plan rather than receive annuities. Actions available to help retiring participants range from options that would encourage the receipt of annuities to providing information to help participants make better decisions about managing their pension assets at and during retirement.According to an expert panel GAO used as part of this study, retirees need to be aware of the risk of outliving one’s assets in retirement and the financial risks individuals face in retirement.
Date Published:Tuesday, July 1, 2003
Funding Agency: US General Accountability Office
Type: Report;
Source: Focus groups and/or interviews; Literature review;
Language: English
Audience: Researcher