Retirement Savings: Opportunities to Improve DOL's SAVER Act	 
Campaign (26-JUN-01, GAO-01-634).				 
								 
Many of today's workers may not be financially prepared for	 
retirement when they stop working. Many people are depending on  
Social Security alone, without an additional retirement plan. The
Congress enacted the Savings Are Vital to Everyone's Retirement  
(SAVER) Act of 1997. The act requires the U.S. Department of	 
Labor (DOL) to hold periodic national summits and maintain an	 
outreach program to promote retirement saving. This report (1)	 
identifies major accomplishments of the 1998 summit and issues	 
that might affect future summits, (2) describes DOL's outreach	 
program, and (3) determines what DOL knows about the		 
effectiveness of the summit and outreach program. GAO found that 
(1) the 1998 National Summit made progress in identifying	 
problems that workers face in saving for retirement, (2) DOL's	 
Outreach Program, the Retirement Savings Education Campaign	 
targets owners of small businesses, women, minorities, and youth 
to change the way they think about, and act on, their retirement 
saving needs, and (3) DOL has not attempted to assess the extent 
to which the 1998 National Summit and Pension and Welfare	 
Benefits Administration  outreach efforts have increased the	 
public's knowledge and understanding of retirement savings.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-634 					        
    ACCNO:   A01254						        
  TITLE:     Retirement Savings: Opportunities to Improve DOL's SAVER 
             Act Campaign                                                     
     DATE:   06/26/2001 
  SUBJECT:   Employee retirement plans				 
	     Retirement pensions				 
	     Education or training				 
	     Program evaluation 				 
	     Public relations					 
	     DOL Retirement Savings Education			 
	     Campaign						 
								 

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GAO-01-634
     
GAO United States General Accounting Office

Report to the Ranking Minority Member, Subcommittee on Employer- Employee
Relations, Committee on Education and the Workforce, House of Representative

June 2001 RETIREMENT SAVING

Opportunities to Improve DOL's SAVER Act Campaign

GAO- 01- 634

Page i GAO- 01- 634 DOL's SAVER Act Campaign Letter 1

Appendix I Scope and Methodology 20

Appendix II Comments from the Department of Labor 22

Tables

Table 1: Estimated Direct Obligations and Expenditures for SAVER Act
Outreach Program Activities, Fiscal Years 1998 Through 2000 12 Table 2:
Description of Major PWBA Outreach Activities 13

Abbreviations

ASEC American Savings Education Council DOL Department of Labor GIG
Government Interagency Group PWBA Pension and Welfare Benefits
Administration SAVER Savings Are Vital to Everyone?s Retirement Act of 1997
Contents

Page 1 GAO- 01- 634 DOL's SAVER Act Campaign

June 26, 2001 The Honorable Robert Andrews Ranking Minority Member
Subcommittee on Employer- Employee Relations Committee on Education and the
Workforce House of Representatives

Dear Mr. Andrews: Many of today?s workers may not be financially prepared
for retirement when they stop working. For example, the most recent national
survey data available indicate that 53 percent of workers lacked an employee
pension plan in 1999. 1 Another survey indicates that, while most workers in
their late fifties and early sixties, the age at which they are looking soon
to retire, have financial assets, the median value of those assets was less
than $46,000 in 1998. 2 Workers need to prepare financially for retirement
because, while Social Security will provide some income to most retired
persons, that income alone will likely not be sufficient to provide a
comfortable standard of living. Retirement savings, including employee
pension plans and individual retirement accounts, can provide the additional
income needed to supplement Social Security benefits.

Concerned that people are not saving enough for retirement, the Congress
enacted the Savings Are Vital to Everyone?s Retirement (SAVER) Act of 1997.
3 The act requires the U. S. Department of Labor (DOL) to hold

1 The estimate is based on the March 2000 Current Population Survey, and
includes all members of the civilian, non- institutional population who were
age 16 or older and employed at some time during the year preceding the
survey, except the self- employed. The estimate excludes self- employed
persons because the survey does not collect information on Keogh plans, a
type of pension plan for the self- employed. See appendix I for information
on sampling and nonsampling errors. We analyzed the proportion and
characteristics of workers who lack pensions in our report entitled Pension
Plans: Characteristics of Persons in the Labor Force Without Pension
Coverage

(GAO/ HEHS- 00- 131, Aug. 22, 2000). 2 Arthur B. Kennickell, Martha Starr-
McCluer, and Brian J. Surette, ?Recent Changes in U. S. Family Finances:
Results from the 1998 Survey of Consumer Finances,? Federal Reserve Bulletin
(Jan. 2000). In this analysis of Survey of Consumer Finances data, financial
assets include checking and savings accounts; stocks, bonds, and mutual
funds; and Individual Retirement Accounts, Keogh accounts for the self-
employed, and certain employersponsored accounts, such as 401( k) accounts.
Surveys are conducted every 3 years.

3 P. L. 105- 92, Nov. 19, 1997.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 01- 634 DOL's SAVER Act Campaign

periodic national summits and maintain an outreach program to promote
retirement saving. Because the second national summit is to be held this
year, in 2001, you asked us to provide you with information concerning the
implementation of the act. Specifically, we agreed to (1) identify major
accomplishments of the 1998 summit and issues that might affect future
summits, (2) describe DOL?s outreach program, and (3) determine what DOL
knows about the effectiveness of the summit and outreach program.

To obtain this information, we interviewed officials at DOL?s Pension and
Welfare Benefits Administration (PWBA), other government agencies sponsoring
saving and investment education programs, and other organizations that focus
on saving and retirement issues. We also reviewed documents provided by
these agencies and organizations, including a report to the President and
congressional leadership summarizing activities at the 1998 National Summit.
4 We conducted our work between October 2000 and April 2001 in accordance
with generally accepted government auditing standards. (See app. I for our
scope and methodology.)

The 1998 National Summit made progress in addressing some of the purposes
specified for the summits in the SAVER Act. For example, as required by the
act, the summit identified problems that workers face in saving for
retirement and barriers that employers face in helping workers save for
retirement. Additionally, while observers and attendees agreed that
publicity about the summit may have increased the public?s awareness and
knowledge of retirement saving issues, a summit purpose specified in the
act, they disagreed as to the extent of that increase. The 1998 summit did
not develop recommendations addressing retirement saving issues and
coordinating government education programs, as called for in the act. It
remains for the 2001 and 2005 summits to develop such recommendations. In
March 2001, DOL was in the process of developing a proposed agenda for the
2001 summit, and it was unclear at that time to what extent the proposed
agenda would address the development of recommendations.

DOL?s Retirement Savings Education Campaign, which began 2 years prior to
passage of the SAVER Act, is an outreach program that targets owners of
small businesses, women, minorities, and youth to change the way they

4 Department of Labor, The National Summit on Retirement Savings
(Washington, D. C.: Sep. 3, 1998). Results In Brief

Page 3 GAO- 01- 634 DOL's SAVER Act Campaign

think about, and act on, their retirement saving needs. Since 1998, PWBA has
spent about $850,000 on average in each of the last 3 years- or about 1
percent of its annual obligations and expenditures- to implement its
outreach program, which is now under the authority of the SAVER Act. Most of
those funds have been used to develop and distribute educational materials.
Other outreach activities include creating and distributing radio and print
public service announcements, cosponsoring conferences and attending public
meetings, and maintaining an Internet site. DOL leverages its resources with
in- kind contributions from partner organizations. DOL also coordinates its
outreach activities with other federal agencies that promote retirement
saving but agency officials disagreed on the extent of that coordination.

DOL has not attempted to assess the extent to which the 1998 National Summit
and PWBA outreach efforts have increased the public?s knowledge and
understanding of retirement saving. While DOL collects information on the
number of publications distributed, it does not know the extent to which
materials are useful to the recipients. PWBA officials told us that they
plan to make other efforts to evaluate DOL?s outreach activities in the
future by including questions and surveys in publications and holding focus
groups; however, they have yet to establish a timetable for conducting
evaluations.

This report contains recommendations to the Secretary of Labor concerning
actions needed to evaluate the effectiveness of the major activities of
DOL?s retirement saving outreach program. In its written comments, DOL
concurred with our recommendations to develop and implement a more
systematic method for measuring the effectiveness of its outreach activities
that is commensurate with the size and scope of the retirement saving
outreach program.

In the United States, major sources of retirement income are Social
Security; retirement savings, including employee pension plans and
individual retirement accounts; and to the extent retired persons are
willing and able to continue working, wages and salaries. While Social
Security provides a foundation for retirement income, saving through pension
plans and by individuals on their own behalf contributes substantially to
ensuring a secure retirement. 5

5 National Saving: Answers to Key Questions (GAO- 01- 591SP, June 2001).
Background

Page 4 GAO- 01- 634 DOL's SAVER Act Campaign

U. S. tax policy encourages workers to save for retirement by providing
preferential tax treatment to employee pension plans and individual
retirement accounts. There is some evidence, however, that tax policy alone
may not be sufficient to address some of the causes of low saving. 6 For
example, low saving may result in part from financial illiteracy, and many
individuals may poorly understand their economic vulnerabilities or the
economic incentives that tax policies seek to create. 7 If so, educating the
public about retirement saving may help stimulate saving.

In 1995, recognizing that education might influence saving behavior, DOL
initiated the Retirement Savings Education Campaign to educate individuals
about the importance of saving for retirement. Two years later, the Congress
enacted the SAVER Act to promote retirement saving. Specific purposes of the
act are to

 provide for periodic bipartisan national retirement savings summits to
elevate the issue of retirement saving to national prominence;

 initiate the development of a broad- based, public education program to
encourage and enhance individual commitment to a personal retirement saving
strategy; and

 advance the public?s knowledge and understanding of retirement saving and
its critical importance to the future well- being of American workers and
their families.

Within DOL, PWBA is responsible for planning and conducting national summits
and maintaining an effective outreach program. 8 National

6 B. Douglas Bernheim, ?Rethinking Saving Incentives,? Fiscal Policy:
Lessons from Economic Research (Cambridge, MA: Massachusetts Institute of
Technology, 1997) and Sendhil Mullainathan and Richard H. Thaler, Behavioral
Economics, Working Paper 7948, Cambridge, MA: National Bureau of Economic
Research (Oct. 2000).

7 B. Douglas Bernheim, and Daniel M. Garrett, The Determinants and
Consequences of Financial Education in the Workplace: Evidence from a Survey
of Households, Working Paper 5667, Cambridge, MA: National Bureau of
Economic Research (July 1996).

8 PWBA?s primary mission is to protect the pension, health, and other
employee benefits of the over 150 million participants and beneficiaries in
over 6 million private sector employee benefit plans. Within PWBA, the
Office of Participant Assistance and Communication provides employee benefit
plan participants and the general public with publications and other
information to help them better understand their benefits and rights.

Page 5 GAO- 01- 634 DOL's SAVER Act Campaign

summits are to be convened by the President in 1998, 2001, and 2005. 9 The
first summit was held on June 4- 5, 1998, in Washington, D. C., and was
conducted by DOL with the assistance of the American Savings Education
Council (ASEC). 10 As required by the SAVER Act, the federal government and
the private sector shared the cost of the 1998 National Summit. According to
PWBA, the federal government spent about $177,000, and according to ASEC,
the private sector spent about $498,000. 11 The Congress has appropriated
$500,000 for the 2001 summit. In March 2001, DOL issued a request for
proposals and, at this writing, is in the process of selecting an entity to
assume some of the administrative burdens and share the cost of the 2001
summit.

Other federal agencies, including the Department of the Treasury and the
Social Security Administration, also have or are planning to have programs
to promote financial literacy and retirement saving. For example, in April
2000, the Department of the Treasury launched the National Partners for
Financial Empowerment. The organization is a coalition of consumer,
community, business, and nonprofit groups; corporations; and federal, state,
and local government organizations. The organization?s mission is to
increase the public?s awareness of financial literacy and education issues.
Additionally, the Social Security Administration plans to launch a
nationwide ?Save for Your Future? campaign to, among other things, increase
the public?s knowledge of Social Security programs and awareness of the
importance of saving.

9 The summits are to be convened by the President and cohosted by the
Speaker and Minority Leader of the House of Representatives and the Majority
and Minority Leaders of the Senate. The act provides for a number of
statutory delegates, including the President and majority and minority
congressional leaders. The act also specifies that up to 200 additional
delegates may be appointed: 50 percent by the President and 50 percent by
the congressional leadership from the opposing political party.

10 The SAVER Act requires DOL to consult and coordinate with an organization
made up of private- sector businesses and associations partnered with
government entities to promote long- term financial security in retirement
through saving. ASEC was that organization for the 1998 summit. Formed in
1995, ASEC is a nonprofit coalition of public- and privatesector
organizations that promote retirement saving.

11 ASEC?s costs also included staff expenses.

Page 6 GAO- 01- 634 DOL's SAVER Act Campaign

The 1998 National Summit made progress in addressing some of the purposes
set out for the summits in the SAVER Act; however, delegates and attendees
at the summit sometimes disagreed as to the extent of that progress. For
example, attendees generally agreed that there was publicity about the 1998
summit. Some believe that the publicity was substantial and had a
significant albeit unverified impact on the public?s awareness and
understanding of retirement saving issues. Others believe that the publicity
was too limited to have a significant impact on the public. PWBA, Treasury,
and ASEC officials said that planners did not intend for the delegates of
the first summit to develop recommendations for addressing retirement saving
issues that were called for in the SAVER Act. It remains for the 2001 and
2005 summits to develop such recommendations. However, as of March 2001, it
remained unclear to what extent the agenda for the 2001 summit would address
the purposes for the summits related to developing recommendations.

The purpose of the National Summit 12 shall be to:

 Increase the public awareness of the value of personal saving for
retirement.

 Advance the public's knowledge and understanding of retirement saving and
its critical importance to the future well- being of American workers and
their families.

 Facilitate the development of a broad- based, public education program to
encourage individual commitment to a personal retirement saving strategy.

 Identify problems workers have in setting aside adequate funds for
retirement.

 Identify the barriers that employers, especially small business employers,
face in helping their employees accumulate retirement savings.

 Examine the impact and effectiveness of efforts by individual employers to
promote personal saving for retirement among their workers and promote
participation in company saving options.

 Examine the impact and effectiveness of government programs at the
federal, state, and local levels to educate the public so as to encourage
retirement saving.

 Develop specific and comprehensive recommendations for the legislative and
executive branches of the government and for private sector action as

12 29 U. S. C. 1147( a). 1998 Summit

Addressed Some Mandated Purposes

Page 7 GAO- 01- 634 DOL's SAVER Act Campaign

may be appropriate for promoting private pensions and individual retirement
saving.

 Develop recommendations for the coordination of federal, state, and local
retirement saving initiatives.

The act requires DOL to prepare and distribute a report describing summit
activities not later than 90 days after the summit is adjourned. The final
report describing activities of the 1998 summit was dated September 3, 1998.

Delegates and attendees agreed that the 1998 summit identified many barriers
that make it difficult for workers to save for retirement and for employers
to help workers attain that goal. Among the retirement saving barriers that
were identified at the summit were the workers? lack of knowledge about
financial matters and retirement saving, the perceived lack of sufficient
income for both current needs and saving, and the lack of access to
employer- based pension plans. The summit also identified barriers faced by
employers, including confusing and complicated government regulations that
employers must contend with in setting up and operating pension plans and
the fact that many employees prefer a larger paycheck to having future
retirement benefits withheld from the paycheck.

Government and ASEC officials said that the summit facilitated the
development of a broad- based education program to encourage saving. They
said that the summit brought together a diverse group of government
officials and private- sector representatives and gave examples of
successful partnerships to implement effective education programs to
encourage saving. For example, PWBA officials said that the summit helped
them recruit potential partners for PWBA?s Retirement Savings Education
Campaign activities. Similarly, a Treasury official said that the summit
helped facilitate the launching of the Department of the Treasury?s National
Partners for Financial Empowerment by identifying potential partners. The
summit also reinforced the need to focus on segments of the public such as
minorities and low- income workers who were at greater risk than others of
having inadequate savings and, therefore, might be specifically targeted by
DOL?s program. 1998 Summit Identified

Barriers to Retirement Saving

1998 Summit Facilitated the Development of Public Education Programs

Page 8 GAO- 01- 634 DOL's SAVER Act Campaign

Summit delegates and/ or attendees disagreed as to the extent that the 1998
National Summit increased the public?s awareness of the importance of saving
for retirement and advanced the public?s knowledge and understanding of
retirement saving. PWBA, Treasury, and ASEC officials said that the 1998
summit was widely reported in the media and that, as a result, it probably
increased the level of the public?s awareness and understanding of
retirement saving issues. PWBA officials also said that follow- up regional
summits or related activities occurred in several states, including New York
and Texas, because of the National Summit. PWBA officials told us, however,
that they did not determine whether the publicity or activities surrounding
the summit had a long- term effect on the public?s awareness or knowledge of
saving- related issues. Several union, corporate, and nonprofit
representatives whom we contacted said that the resulting publicity was not
sufficient or that the publicity was geographically too concentrated in the
Washington, D. C., area; therefore, its impact on the public?s awareness and
understanding of retirement saving issues was limited.

With respect to government saving education programs, DOL?s final report
describes efforts by PWBA in its Retirement Savings Education Campaign and
initiatives by the state of Oregon to educate the public concerning
retirement saving issues. PWBA officials said that the 1998 summit
essentially validated its ongoing Retirement Savings Education Campaign.
However, several attendees that we contacted said that the summit did not
address in- depth the effectiveness of government saving education programs.

To some extent, the 1998 summit also examined the impact and effectiveness
of employer programs to promote retirement saving and pension plan
participation. For example, employers were encouraged to increase pension
plan participation by adopting procedures to automatically enroll newly
hired employees in their 401( k) plans. Shortly after the summit, the IRS
published a revenue ruling clarifying that automatic enrollment in 401( k)
plans is permissible for newly hired employees. 13 A union official said
that the 1998 summit focused heavily on defined contribution plans, such as
401( k) plans, and did not adequately

13 Revenue Ruling 98- 30, Internal Revenue Bulletin 1998- 25 (June 22,
1998). 1998 Summit May Have

Increased Public Awareness

1998 Summit Examined to Some Extent Government and Employer Efforts to
Promote Retirement Saving

Page 9 GAO- 01- 634 DOL's SAVER Act Campaign

address the need for defined benefit plans. 14 The official said that people
who do not have enough money to save cannot rely on voluntary savings
approaches like 401( k) plans.

The 1998 summit made no recommendations for the government or the private
sector to promote private pensions or retirement saving and made no
recommendations for the coordination of government retirement saving
initiatives. PWBA, Treasury, and ASEC officials said that planners did not
intend for the delegates of the first summit to develop such
recommendations. According to a Treasury official involved in the planning
process, the decision not to develop recommendations at the 1998 National
Summit was made at the National Economic Council level. 15 According to the
official, planning the first summit focused on areas of agreement, building
on what planners perceived to be clear evidence that education could
contribute to efforts to increase saving. The planners? intentions for the
1998 summit were to bring people together to discuss issues related to
retirement saving and build relationships for future initiatives and to
avoid a potentially divisive debate over what policy changes are needed to
increase saving. Summit planners believed the atmosphere might be more
conducive to addressing the more contentious issues, such as legislative
proposals to promote saving, and developing specific recommendations at the
national summits in 2001 and 2005.

In December 2000, DOL requested comments from the public, to be received by
January 31, 2001, for purposes of developing a comprehensive agenda for the
2001 summit. In March 2001, DOL was in the process of reviewing the
comments. At that time, it was not clear to what extent the draft agenda for
the 2001 summit would reflect the purposes in the act that call for (1)
developing specific and comprehensive recommendations for actions by the
legislative and executive branches of the government, and the private
sector, to promote private pensions and individual retirement saving and (2)
recommendations for the coordination of federal, state, and local government
retirement saving initiatives. According to PWBA?s

14 Pension plans are customarily classified as either defined benefit or
defined contribution plans. Defined benefit plans promise a retirement
benefit that is usually determined by salary level and length of service. A
defined contribution plan specifies contributions to be made, but the
benefit depends on investment performance.

15 The National Economic Council, which included the President, Vice
President, the Secretaries of State, the Treasury, and Labor, among others,
was responsible for coordinating and monitoring the implementation of the
President?s economic policy. 1998 Summit Did Not

Make Recommendations

Page 10 GAO- 01- 634 DOL's SAVER Act Campaign

timeline, an agenda is to be submitted for comment to the White House and
congressional staffs in May 2001 and published in the Federal Register in
July 2001. 16

With its public- and private- sector partners, DOL began promoting
retirement saving education in July 1995, under its Retirement Savings
Education Campaign. The campaign?s outreach efforts- now under the authority
of the SAVER Act of 1997- continue to build upon and reinforce the need to
save for retirement and educate workers and employers about ways to save for
retirement. DOL?s spending ranged from $775, 271 to $892,466 over the last 3
fiscal years- or about 1 percent of PWBA?s total annual obligations and
expenditures- to develop and distribute educational materials, public
service announcements and media outreach, participate at conferences and
public meetings, and establish an Internet site to promote retirement
saving. DOL leverages its resources with inkind contributions from partner
organizations and coordinates its outreach activities with other public and
private organizations that are involved in retirement saving issues.

DOL?s current outreach program is a continuation of its Retirement Savings
Education Campaign, which began 2 years before passage of the SAVER Act. The
campaign was launched in July 1995 in conjunction with the Department of
Treasury and approximately 65 private- and publicsector partners. With DOL
acting as a catalyst, the campaign provided a forum for the partners
involved to provide information on pensions and retirement planning to the
public and employers. The campaign targeted education and outreach
activities at specific groups: small business employees, women, minorities,
and future generations of workers- today?s youth. Under the umbrella of the
Employee Benefit Research Institute, the campaign partners formed ASEC to
undertake initiatives to raise public awareness about the importance of
personal finance and retirement planning. According to an ASEC official,
over 100 private and public institutions participate in the organization?s
activities. DOL and ASEC participate in each other?s retirement saving
campaign efforts. Both entities distribute each other?s publications, and
ASEC provides DOL?s

16 The act states that DOL shall make available for public comment a
proposed agenda for the summit that reflects to the greatest extent possible
the purposes for the summit set out in the act. 29 U. S. C. 1147( f)( 1)(
C). DOL?s Outreach

Activities Continued Under SAVER Act

DOL?s Outreach Program Under the SAVER Act

Page 11 GAO- 01- 634 DOL's SAVER Act Campaign

toll- free telephone number in its publications. In addition, ASEC and DOL
participate separately in retirement saving initiatives with other
organizations.

After 1997, some of the outreach activities and initiatives of the
Retirement Savings Education Campaign were no longer optional; they became
mandated by law. Under the SAVER Act, DOL is to maintain an outreach program
designed to effectively promote retirement saving. The program is to be
carried out by means that ensure effective communication to the public,
including creating educational materials, publishing public service
announcements, attending public meetings, and establishing an Internet site.
The act requires that the information made available by DOL as part of its
outreach program include

 a description of the vehicles currently available to individuals and
employers for retirement saving and

 information regarding matters relevant to establishing retirement savings,
such as the concept of compound interest and the importance of prudence and
diversification in investing.

In fiscal year 2000, DOL?s outreach program was redesigned, and the name was
changed to the ?Saving Matters? Campaign; the program continues to target
small businesses, women, minorities, and youth. DOL has identified the
following goals for its Saving Matters Campaign for fiscal year 2001:

 Educate and motivate American workers about the need to save for
retirement.

 Increase the number of employers who receive information on retirement
saving plans and the number of employers that provide related education for
their workers.

 Serve as a catalyst for other private- and public- sector organizations
that are committed to advancing the level of retirement saving education so
as to increase the amount of retirement saving in America.

 Meet the requirements set out in the SAVER Act of 1997. In addition, DOL?s
outreach strategy for 2001 is to increase grass roots outreach and
education. In prior years, DOL?s national office conducted the vast majority
of the outreach effort with little regional and district involvement. In
2001, DOL?s 15 regional and district offices are to have a key role in
delivering campaign messages and materials to local audiences around the
country. The campaign will continue to promote and distribute materials
developed in the past as well as create new products.

Page 12 GAO- 01- 634 DOL's SAVER Act Campaign

PWBA spending ranged from $775,271 in fiscal year 1997 to $892,466 in fiscal
year 2000- or about 1 percent of its total annual obligations and
expenditures 17 -for its outreach program. Table 1 shows that since the
SAVER Act was passed in November 1997, PWBA has spent most of the funds to
create and distribute educational materials. Other outreach activities were
preparing and distributing radio and television public service announcements
(PSAs), attending conferences and other public meetings, and developing and
maintaining an Internet site. These other activities also served to
advertise and help distribute educational materials developed by PWBA and
others. According to PWBA, 27 PSAs designed for use in print, radio, and
television outlets have been placed in over 20,000 newspapers, magazines,
radio stations, and television stations nationwide since 1998. Table 2
provides additional information about PWBA?s major outreach activities.

Table 1: Estimated Direct Obligations and Expenditures for SAVER Act
Outreach Program Activities, Fiscal Years 1998 Through 2000

Activity 1998 1999 2000 Total

Create and distribute educational materials $665,893 $650,671 $449,906
$1,766,470

Hold conferences and public meetings 25,000 82,000 376,100 b 483,100

Develop and distribute public service announcements and other media outreach
84,078 125,746 53,000 262,824

Develop and maintain an Internet site 30,569 30,569

Travel and other activities 300 978 13,460 14,738 Total $775,271 a $889,964
$892,466 $2,557,701

a In addition, PWBA spent approximately $177,000 out of its existing budget
for the 1998 summit. b This amount included a $350,000 contract with a non-
profit organization to cosponsor a series of conferences on financial issues
for women. Source: PWBA.

Additionally, officials estimated that in 2000 PWBA expended 3 to 4 staff
years to perform outreach activities related to the SAVER Act at an
estimated annual cost of $100,000 per staff year. PWBA personnel in field
offices began working on SAVER Act activities in fiscal year 2000.

17 PWBA annual obligations and expenditures during the same period ranged
from about $82 million to $98.8 million.

Page 13 GAO- 01- 634 DOL's SAVER Act Campaign

Table 2: Description of Major PWBA Outreach Activities Outreach activity
Description

Educational materials During fiscal years 1998 and 2000, DOL focused its
SAVER Act outreach strategy on developing and distributing pamphlets and
other educational materials a Publications include Savings Fitness: A Guide
to Your Money and Your Financial Future, Top 10 Ways to Prepare for
Retirement, Women and Pensions, About Retirement Savings, and Simple
Retirement Solutions for Small Business. SAVER Act publications are
delivered upon request at no cost to the individual. Public service
announcement and media outreach DOL uses print and broadcast (radio and
television) public service announcements (PSAs)

as the primary method for promoting its retirement saving publications. PSAs
are designed to capture the attention of the intended audience, convince
them that they need more information about retirement saving, and motivate
them to call the toll- free publication number. Conferences and public
meetings DOL participates in conferences, workshops, forums, and summits. In
1998, DOL became

a national sponsor of the Everywoman?s Money Conferences. That conference is
designed to provide women of all ages with tools to improve their knowledge
of financial issues- particularly retirement saving. DOL also participates
in public events as an exhibitor or speaker at Securities and Exchange
Commission town hall meetings, the Association for Small Business
Development Centers annual conference, and the National Forum to Encourage
Lower- Income Household Savings. Internet sites PWBA?s Web site containing
SAVER Act materials can be accessed through DOL?s Web

site (http:// www. dol. gov/ dol/ pwba). The PWBA site includes retirement
saving- related publications, tips for consumers about preventing pension
miscalculations, and many other materials, including ASEC?s Ball Park
Estimate, ï¿½ a tool to help estimate how much money an individual will need
at retirement. PWBA?s Web site also contains links to several sites
maintained by other federal agencies to promote saving, including the
Department of the Treasury?s Internet site promoting savings bonds. Working
in cooperation with the U. S. Chamber of Commerce, Merrill Lynch, and the
Small Business Administration; DOL also constructed a small business
retirement saving site (http:// www. selectaretirementplan. org). This site
allows small businesses to review various plan options available to them and
provides a description of the features of each. a DOL received requests for
854,000 publications between 1998 and 2000 via its toll- free publications

hotline established in 1997. The toll- free number (1- 800- 998- 7542) is a
central source for requesting SAVER Act publications. DOL estimates it
distributed about 2 million copies of SAVER Act and publications related to
other PWBA activities through all methods, including its 800 number, the
Federal Consumer Information Center, related conferences and events, and
PWBA field office activities, during that period.

Source: PWBA.

Over the years, DOL has partnered with both private- and public- sector
organizations to leverage its resources to help reach its target audiences.
For example, DOL?s Savings Fitness booklet was prepared and distributed in
collaboration with the Certified Financial Planners Board of Standards. The
booklet explains in simple terms the concept of compound interest and
describes various saving plans and how they work. The Board paid to have the
booklet written, and DOL paid to have the booklet printed and distributed.
The Secretary of Labor introduced the publication to 40 million readers in
the pages of Parade Magazine, and the booklet had the Partnerships and

Coordination With Other Organizations

Page 14 GAO- 01- 634 DOL's SAVER Act Campaign

largest distribution of a SAVER Act publication from DOL?s 800 number
requests in 2000.

In 1999, DOL partnered with the Consumer Information Center and shared the
cost of including promotional cards (? Here Today, Gone Tomorrow?) with 2
million income tax refunds to encourage taxpayers to save a portion of their
money for retirement. Respondents to the cards received DOL brochures on
retirement saving. The Consumer Information Center paid for printing the
cards. DOL paid for printing the brochures and the distribution of the
packages.

The SAVER Act also requires DOL to coordinate its outreach program with
similar efforts undertaken by other public and private entities. Officials
at DOL and other federal agencies said that this coordination takes place
primarily through meetings held by the Government Interagency Group (GIG) of
ASEC. The group- comprised of federal government partners who meet every 2
months- discusses ongoing outreach activities and initiatives. Participating
agencies include the Administration on Aging, Department of the Treasury,
Department of Agriculture, Securities and Exchange Commission, Social
Security Administration, and others. Some officials said that GIG meetings
provide an effective forum for agencies to share ideas and look for ways to
collaborate, but other officials said that the meetings were little more
than recitations of the efforts each agency has to promote savings and that
little real coordination takes place. PWBA officials said that its outreach
activities are also coordinated through oneon- one meetings with the Social
Security Administration and others involved in saving outreach or education
activities. While PWBA officials acknowledged that there is no single
federal entity leading governmentwide efforts, they said that PWBA has
served as a catalyst for many of the activities taken by other federal
agencies to promote retirement saving.

Although assessing the overall contribution of the SAVER Act?s efforts
toward changing the public?s knowledge and understanding about retirement
saving would be difficult, DOL has not attempted to do so. Additionally, DOL
has not assessed the effectiveness of its specific educational materials and
outreach activities but believes that doing more is possible. DOL collects
data on the number of publications distributed and informal comments on the
quality of its publications but has not yet implemented a systematic effort
to assess whether the publications or other outreach activities are
effective in promoting retirement saving. DOL Has Not

Assessed the Effectiveness of Activities to Promote Retirement Saving

Page 15 GAO- 01- 634 DOL's SAVER Act Campaign

An overall goal of the SAVER Act is to advance the public?s knowledge and
understanding of retirement saving and its critical importance to the future
well- being of American workers and their families. Recent studies indicate
the public?s knowledge and understanding of retirement saving might have
changed since the act became law in 1997. The 2001 Retirement Confidence
Survey 18 indicates, for example, that the percentage of workers who had
tried to calculate their retirement saving needs increased between 1997 and
2001. PWBA said, however, that no evidence links the apparent increases to
DOL?s or other saving education efforts. Determining the impact of the
national summit or DOL?s outreach program on the public?s understanding and
knowledge would be difficult because a range of other factors affects saving
attitudes and behavior. Factors that might influence saving attitudes and
behavior include discussions of the future of Social Security, the movement
toward greater reliance on account- type pension plans, and the aging of the
baby boom generation. 19 Similarly, the officials said that determining the
factors that affect a change in pension coverage rates is difficult due to
the myriad economic factors that shape employers? decisions to sponsor
retirement savings plans, as well as the impact of the economy on household
saving decisions.

DOL has little information about the specific effectiveness of individual
publications and other outreach activities. DOL?s program activities
assessment has been largely limited to tracking quantitative data and making
note of the informal feedback it has received on the quality of its
publications. For example, DOL told us that its public service announcements
potentially reached over 180 million people; it distributed over 500,000
SAVER Act publications through toll- free number requests; and it records an
average of about 24,000 visitors per month to its Internet site. DOL
received informal feedback on the usefulness of its publications

18 Retirement Confidence Survey 2001 Summary of Findings, Employee Benefit
Research Institute (Washington, D. C.: May 2001). 19 In general, older
workers may have higher preferences for saving, as opposed to consumption,
than younger workers. The theoretical basis for such preferences is found in
a life- cycle saving and consumption model. According to this model,
expenditures typically exceed earned income early in a person?s career
because of immediate consumption needs like child rearing and mortgage
expenses. Later in life, earned income is more likely to exceed consumption
needs, allowing persons to save for retirement. See Olivia S. Mitchell and
James F. Moore, Retirement Wealth Accumulation and Decumulation: New
Developments and Outstanding Opportunities, Philadelphia: The Pension
Research Council (Apr. 1997). Determining SAVER Act?s

Contribution on Retirement Saving Would Be Difficult

DOL Has Little Information About the Effectiveness of Individual Activities

Page 16 GAO- 01- 634 DOL's SAVER Act Campaign

from representatives of other organizations that have partnered with DOL,
from organizations that have distributed DOL?s publications, and from
individuals who have received DOL publications at conferences or public
events. While tracking qualitative data and informal comments may provide
some useful information, those two indicators alone do not provide a
systematic method to measure and evaluate the effects of specific
activities.

DOL recognizes the need to do more to measure the effectiveness of its
publications and other outreach activities, but officials cite the lack of
funds as the major obstacle. Officials said that funds were spent to develop
and distribute educational materials rather than to develop and implement
measurement activities. However, DOL has taken some steps to improve its
evaluation efforts. For example, DOL awarded a contract to a nonprofit
organization to conduct ?before and after? surveys of the Everywoman?s Money
Conferences that DOL cosponsored. The surveys were to measure changes in the
saving awareness and behavior of conference participants, but the contractor
has not provided the required post- conference results to DOL and is not
expected to fulfill this contract requirement due to its own financial
difficulties. 20 Moreover, DOL has not evaluated the usefulness of its
publications or information provided on its Internet site.

For fiscal year 2001, PWBA requested $500,000 to evaluate the effectiveness
of its combined pension and health benefit advisor activities as part of a
$1.5 million expansion of that program. However, DOL did not approve PWBA?s
request. In a notice that requested information for developing the agenda
for the 2001 National Summit, 21 DOL has also requested information on
measurement techniques that assess the effectiveness of public outreach and
media efforts. PWBA officials told us that they plan to make other efforts
to evaluate DOL?s outreach activities in the future by including questions
and surveys in publications and holding focus groups; however, they have yet
to establish a timetable for conducting evaluations. The officials also
expressed concern that these efforts require time and money that would take
resources away from the activities themselves. Ideally, in their opinion,
DOL would have an

20 However, PWBA officials said that they planned to conduct or make
arrangements with another contractor to follow up with the participants to
evaluate the effect that the conference had on the attendees? knowledge of
retirement saving or their behavior.

21 Federal Register, Vol. 65, No. 232, Dec. 1, 2000, pp. 75578- 75579.

Page 17 GAO- 01- 634 DOL's SAVER Act Campaign

independent organization evaluate the effectiveness of its outreach
activities, but the officials said that no funds exist for such an
evaluation.

Our discussions with financial education researchers indicate that a
systematic follow- up effort to obtain feedback from recipients of the
publications- or educators and trainers who used the publication- is
important to implementing an effective education or outreach program, such
as DOL?s campaign. According to one researcher, such feedback could be
extremely useful not only for improving current products but also for
developing the next generation of products. The researcher also said that
follow- up efforts should be designed to be cost- effective. Accordingly,
the scope and methodology of performance or effectiveness measures should be
appropriately sized for a $900,000 outreach program. However, the researcher
believes that potential partners in the private sector or financial
education community could help design a cost- effective measurement program.
Another researcher said that, depending on the funding level, an evaluation
effort could range from calling recipients or users to solicit their views
about a material?s effectiveness to a more formal effort by researchers to
assess the quality and effectiveness of the entire outreach program.

The SAVER Act summits present a unique opportunity for national leaders and
public- and private- sector organizations to come together to increase
public awareness of the value of saving for retirement and develop ways to
encourage private pensions and individual retirement saving. Summits
scheduled for 2001 and 2005 represent opportunities to make further progress
at achieving the mandated purposes of the summit that were partially
addressed at the 1998 summit. These summits also provide an opportunity to
address those mandated purposes that were not addressed at the 1998 summit:
the development of specific and comprehensive recommendations for government
and private sector actions with respect to retirement saving issues and for
the coordination of government retirement saving education initiatives.
However, achieving these purposes is likely to be difficult. For example,
developing recommendations to promote private pensions and retirement saving
or coordinating federal, state, and local initiatives may require stronger
leadership and cooperation beyond that of the first summit.

The SAVER Act reinforced DOL?s prior outreach efforts under its Retirement
Savings Education Campaign begun in 1995. However, now that the program has
evolved over 6 years, DOL should take steps to refocus its resources and
refine its program by determining how well its Conclusions

Page 18 GAO- 01- 634 DOL's SAVER Act Campaign

activities are succeeding and how the program might be improved. Given the
limited resources for its outreach program, DOL needs to ensure that it has
an effective strategy for reaching people and educating them about the
importance of planning for retirement and encouraging them to save. Without
a systematic effort to measure and evaluate the effects of its outreach
activities, DOL runs the risk of spending its resources on activities that
are not having their intended effect.

DOL should develop and implement a method for measuring the effectiveness of
the major activities of its outreach program. While we recognize the
potential costs and difficulties of measuring the effectiveness of an
outreach program, DOL needs to undertake such an effort so that it has the
information necessary to make the best use of its limited resources.
Therefore, we recommend that the Secretary of Labor direct the Assistant
Secretary of Labor, PWBA, to take the following actions:

 Assess the results of program activities compared to their intended
purpose. For example, DOL could survey individuals on their improved
understanding, changed attitudes, or actions taken as a result of reading
DOL?s educational materials or visiting DOL?s Internet site.

 Appropriately size the scope and methodology of the evaluation effort for
a $900,000 outreach program. Depending on the level of funding, such an
effort could range from calling recipients or users of the materials to
determine their views on its quality or effectiveness to a more formal
effort by researchers to assess the quality and effectiveness of the entire
outreach program.

 In considering the scope of the potential evaluation effort, explore the
potential use of partners in the private sector or the financial education
community that could help design a cost- effective measurement program.

We provided DOL the opportunity to comment on the report, and DOL concurred
with our recommendations in its written comments. DOL also commented further
on the importance of partnerships to its retirement education savings
campaign and the results of its efforts working with other organizations and
agencies, which we incorporated as appropriate. DOL?s letter is included as
appendix II.

We are providing copies of this report to the Honorable Elaine L. Chao,
Secretary of Labor, and appropriate congressional committees. We will
Recommendations for

Executive Action Agency Comments

Page 19 GAO- 01- 634 DOL's SAVER Act Campaign

also make copies available to others on request. The report is also
available on GAO?s home page at http:// www. gao. gov. Please call me at
(202) 512- 7215 or George A. Scott at (202) 512- 5932 if you or any of your
staff have questions. Other major contributors to the report include Daniel
F. Alspaugh, John M. Schaefer, Vernette G. Shaw, and Roger J. Thomas.

Sincerely yours, Barbara D. Bovbjerg, Director Education, Workforce, and

Income Security Issues

Appendix I: Scope and Methodology Page 20 GAO- 01- 634 DOL's SAVER Act
Campaign

To identify major accomplishments of the 1998 National Summit on Retirement
Saving, we reviewed Savings Are Vital to Everyone?s Retirement (SAVER) Act
of 1997 provisions governing national summits and the background material
and the final report for the 1998 summit. We also examined evidence of media
coverage of the 1998 summit proceedings. We discussed the summit with
attendees or delegates representing the Pension and Welfare Benefits
Administration (PWBA), the Department of the Treasury, a union, a
corporation, and the American Savings Education Council and other nonprofit
groups. To identify challenges facing the 2001 and 2005 summits, we
discussed summit planning with PWBA officials and reviewed comments
responding to a Department of Labor (DOL) request for information for the
2001 summit agenda.

To describe DOL?s outreach program, we interviewed PWBA officials and
reviewed various documents- including strategic plans and the SAVER Act- to
document the history of DOL?s program and the strategies used to implement
the outreach program. To document expenditures for outreach activities
related to the SAVER Act, we reviewed budget documents and PWBA estimates of
obligations and expenditures related to the SAVER Act and discussed those
documents with PWBA officials. However, we did not independently verify
PWBA?s estimates. To explain the various elements (activities) of the
program (i. e., educational materials, public service announcements,
conferences and public meetings, and Internet site), we collected and
reviewed educational materials, including brochures and pamphlets and copies
of the public service announcements. We visited the PWBA Web site (http://
www. dol. gov/ dol/ pwba) to view the Internet site containing materials
related to the SAVER Act, and we reviewed documents describing conferences
and public meeting engagements related to the outreach program. In addition,
we reviewed internal documents provided by PWBA on the various activities of
the outreach program. For example, PWBA provided us with a summary document
entitled ?Milestones and Achievements of the Retirement Savings Campaign,?
which highlighted various major milestones and events since the outreach
program began in 1995 through fiscal year 2000. To document DOL?s
partnerships, we interviewed other federal agencies and nonprofit
organizations involved in Saver Act outreach activities and reviewed
documents provided by PWBA describing their current partnership activities.
To document DOL?s coordination efforts, we obtained copies of meeting
minutes from the Government Interagency Group, which is the primary vehicle
used by PWBA to coordinate its efforts with other federal agencies involved
in SAVER Act activities. Appendix I: Scope and Methodology

Appendix I: Scope and Methodology Page 21 GAO- 01- 634 DOL's SAVER Act
Campaign

To determine what DOL knows about the effectiveness of the summit and
outreach program, we reviewed strategic plans for DOL and PWBA and summary
information on the outputs of the PWBA outreach program activities. We also
looked at studies and reports by the Employee Benefits Research Institute
and other results- oriented guidance. We discussed the effectiveness of
SAVER Act activities and other retirement saving education issues with PWBA
officials in headquarters and the field, university researchers, and other
professionals in fields related to retirement saving education.

We also used survey data from the Current Population Survey (CPS) for
background information contained in this report. CPS data contains sampling
and nonsampling errors. The sampling error for the CPS estimate shown in
this report is plus or minus one percentage point at the 95- percent
confidence level. The nonsampling errors can affect the accuracy of the
information presented, but the magnitude of their effects is unknown.
Nonsampling errors may result because persons did not respond to some or all
of the survey questions or the persons in the household who responded were
other than the employee or the employee?s spouse.

Appendix II: Comments from the Department of Labor

Page 22 GAO- 01- 634 DOL's SAVER Act Campaign

Appendix II: Comments from the Department of Labor

Appendix II: Comments from the Department of Labor

Page 23 GAO- 01- 634 DOL's SAVER Act Campaign (130004)

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