Federal Retirement: Key Elements Are Included in Agencies' Education
Programs (Chapter Report, 03/29/99, GAO/GGD-99-27).
Pursuant to a congressional request, GAO reviewed the retirement
education that the Office of Personnel Management (OPM) and agencies
provide to federal civilian employees covered by the Civil Service
Retirement System (CSRS) or the Federal Employees' Retirement System
(FERS).
GAO noted that: (1) OPM and the experts with whom GAO consulted held
generally consistent views regarding the recommended content,
presentation formats, and timing of retirement education programs; (2)
they believed that these programs should provide employees with
information on certain topics, or content such as plan features and
financial planning, and that other agencies should consider using
multiple formats so as to accommodate employees' varying needs; (3) they
also believed that such information should be provided early and
throughout employees' careers; (4) OPM provided guidance to agencies on
the design and implementation of retirement education programs and
supplemented the guidance with educational materials, training, and
technical advice for agencies' benefits staff; (5) agencies had primary
responsibility for designing and implementing their programs according
to their agency-specific needs; (6) the retirement education programs of
the agencies reviewed generally included those topics recommended by OPM
and the experts; (7) in providing retirement education, agencies'
officials said that they made information available on a variety of
topics, including the specific features of CSRS and FERS, the
requirements for maintaining federal health and life insurance benefits
in retirement, and financial planning for retirement; (8) agencies'
officials told GAO that they used a wide variety of presentation formats
to communicate retirement education to their employees; (9) all of the
agencies that GAO reviewed provided employees with written educational
materials that were supplemented with interactive seminars and
one-on-one counseling; (10) agencies provided retirement planning
information, but not advice, regardless of the presentation format used;
(11) agencies' officials also said that they generally provided
retirement education to employees during their initial orientation and
throughout their careers; (12) all of the agencies in GAO's review
sponsored seminars designed for those employees who were nearing
retirement eligibility; (13) some agencies also sponsored additional
seminars that were specifically designed for employees who had
approximately 15 years of federal service to encourage employees to
begin planning for their retirement earlier in their careers; (14)
agencies also provided one-on-one counseling at any time upon request;
and (15) agencies believed that retirement education is a shared
responsibility between agencies and employees, and that employees must
ultimately decide for themselves whether or when to seek retirement
information.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GGD-99-27
TITLE: Federal Retirement: Key Elements Are Included in Agencies'
Education Programs
DATE: 03/29/99
SUBJECT: Employee retirement plans
Federal employees
Federal employee retirement programs
Retirement benefits
IDENTIFIER: Civil Service Retirement System
Federal Employees Retirement System
Federal Thrift Savings Plan
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Microsoft Word - 12$101!.PBF FEDERAL RETIREMENT
Key Elements Are Included in Agencies' Education Programs
United States General Accounting Office
GAO Report to the Honorable Carl Levin U. S. Senate
March 1999
GAO/GGD-99-27
March 1999 GAO/GGD-99-27
United States General Accounting Office Washington, D. C. 20548
Page 1 GAO/GGD-99-27 Agencies' Retirement Education Programs
GAO
General Government Division
B-279463 March 29, 1999 The Honorable Carl Levin United States
Senate
Dear Senator Levin: As you requested in your former capacity as
Ranking Minority Member of the Subcommittee on International
Security, Proliferation and Federal Services, Senate Committee on
Governmental Affairs, this report discusses the retirement
education that the Office of Personnel Management (OPM) and
agencies provide to federal civilian employees covered by the
Civil Service Retirement System or the Federal Employees'
Retirement System. Specifically, it identifies OPM and retirement
experts' views on the key elements of federal retirement education
programs and describes OPM's and agencies' retirement education
roles, responsibilities, and practices in the context of these
recommended elements.
We are sending copies of this report to the Subcommittee's
Chairman, Senator Thad Cochran, and Ranking Minority Member,
Senator Daniel K. Akaka; Senator Fred Thompson, Chairman, and
Senator Joseph I. Lieberman, Ranking Minority Member, Senate
Committee on Governmental Affairs; Representative Dan Burton,
Chairman, and Representative Henry A. Waxman, Ranking Minority
Member, House Committee on Government Reform; and Representative
Joe Scarborough, Chairman, and Representative Elijah E. Cummings,
Ranking Minority Member, Subcommittee on Civil Service, House
Committee on Government Reform. We are also sending copies to the
Honorable Janice R. Lachance, Director, OPM. Copies will also be
made available to others upon request.
If you have any questions, please call me on (202) 512- 8676.
Major contributors to this report are listed in appendix III.
Sincerely yours, Michael Brostek Associate Director Federal
Management
and Workforce Issues
Executive Summary
Page 2 GAO/GGD-99-27 Agencies' Retirement Education Programs
Federal employees who are covered by either of the government's
two major retirement programs could retire with dramatically
different benefits depending on whether and how they plan for
retirement throughout their careers. Agencies' retirement
education programs play an important role in helping federal
employees to make well- informed retirement planning decisions.
However, little is known about how agencies fulfill this role.
Senator Carl Levin, in his former capacity as Ranking Minority
Member of the Subcommittee on International Security,
Proliferation and Federal Services, Senate Committee on
Governmental Affairs, asked GAO to identify Office of Personnel
Management (OPM) and retirement experts' views on the recommended
elements of retirement education programs and describe OPM's and
agencies' retirement education roles, responsibilities, and
practices in the context of these elements.
The Federal Employees' Retirement System Act of 1986 granted OPM
broad authority to design and implement retirement education
programs for federal employees covered by the Civil Service
Retirement System (CSRS) or the Federal Employees' Retirement
System (FERS). The 1986 Act also created the Federal Retirement
Thrift Investment Board to administer the Thrift Savings Plan
(TSP). The Thrift Board provides training and information on TSP;
however, it is not responsible for providing retirement education
for the federal workforce.
At the beginning of fiscal year 1998, CSRS and FERS covered about
2. 7 million federal employees, including U. S. Postal Service
employees. CSRS currently consists of an annuity and, as of 1987,
TSP. Employees with full coverage under CSRS do not receive any
government contributions to their TSP accounts and are not covered
by Social Security. FERS consists of Social Security, an annuity
that is smaller than that provided under CSRS, and TSP with
mandatory federal government and voluntary employee contributions.
In general, FERS covers employees who entered federal service
after 1983, and CSRS covers employees who entered earlier. As of
fiscal year 1995, FERS covered slightly more federal employees
than CSRS.
To collect OPM and expert views on the recommended elements that
is, the content, presentation formats, and timing of a retirement
education program, GAO interviewed OPM officials and consulted
with a group of 15 retirement experts who were experienced with
retirement education issues. To collect information on OPM's and
agencies' roles, responsibilities, and practices regarding
retirement education, GAO interviewed officials at OPM and 12
randomly sampled federal agencies Purpose
Background
Executive Summary Page 3 GAO/GGD-99-27 Agencies' Retirement
Education Programs
that had 1,000 or more employees and whose headquarters were
within the Washington, D. C., metropolitan area.
OPM and the experts with whom GAO consulted held generally
consistent views regarding the recommended content, presentation
formats, and timing of retirement education programs. They
believed that these programs should provide employees with
information on certain topics, or content such as plan features
and financial planning, and that agencies should consider using
multiple formats so as to accommodate employees' varying needs.
They also believed that such information should be provided early
and throughout employees' careers.
OPM provided guidance to agencies on the design and implementation
of retirement education programs and supplemented the guidance
with educational materials, training, and technical advice for
agencies' benefits staff. Agencies, however, had primary
responsibility for designing and implementing their programs
according to their agency- specific needs.
The retirement education programs of the agencies GAO reviewed
generally included those topics recommended by OPM and the
experts. In providing retirement education, agencies' officials
said that they made information available on a variety of topics,
including the specific features of CSRS and FERS, the requirements
for maintaining federal health and life insurance benefits in
retirement, and financial planning for retirement.
Agencies' officials told GAO that they used a variety of
presentation formats to communicate retirement education to their
employees. All of the agencies that GAO reviewed provided
employees with written educational materials (sometimes in
electronic form) that were supplemented with interactive seminars
and one- on- one counseling. Agencies provided retirement planning
information, but not advice, regardless of the presentation format
used.
Agencies' officials also said that they generally provided
retirement education to employees during their initial orientation
and throughout their careers. All of the agencies in GAO's review
sponsored seminars designed for those employees who were nearing
retirement eligibility. Moreover, some agencies also sponsored
additional seminars that were specifically designed for employees
who had approximately 15 years of federal service to encourage
employees to begin planning for their retirement earlier in their
careers. Agencies also provided one- on- one counseling at any
time upon request. Agencies believed that retirement education is
a shared responsibility between agencies and employees, and
Results in Brief
Executive Summary Page 4 GAO/GGD-99-27 Agencies' Retirement
Education Programs
that employees must ultimately decide for themselves whether or
when to seek retirement information.
OPM and the experts with whom GAO consulted recommended that
agencies design and implement their retirement education programs
so as to provide employees with information on certain key topics
using multiple presentation formats early and throughout their
careers. Agencies' programs, including the support provided to
agencies by OPM, were generally consistent with these
recommendations.
As part of its governmentwide responsibility and oversight for
federal retirement systems and related benefits administration
functions, OPM provided general guidance to agencies that included
recommendations on the content, presentation formats, and timing
included in their retirement education programs. OPM also issued
educational materials for agencies' personnel offices as well as
employees, sponsored training for agencies' benefits staff, and
provided agencies with technical support to resolve case- specific
issues. Agencies, however, had the primary responsibility for
designing and implementing their retirement education programs.
Agencies reviewed by GAO generally included information in their
retirement education programs that was consistent with those
topics that OPM and the experts recommended. Specifically,
agencies' officials told GAO that they provided descriptive
information on the features of CSRS and FERS, the steps that
employees must take to continue their health and life insurance
benefits into retirement, and financial planning tools and
information that employees could use to actively plan for their
retirement. Agencies also provided information on how the annuity;
TSP; and, for FERS, Social Security components of employees'
retirement programs were integrated to provide retirement
benefits.
Agencies' officials said that they used a variety of presentation
formats to communicate retirement education information to their
employees. For example, all of the agencies used written materials
that were supplemented by seminars and one- on- one counseling.
Agencies reviewed by GAO commonly distributed materials developed
by OPM or the Thrift Board, and they generally contracted out for
seminars; however, they relied on agencies' staff to provide one-
on- one counseling to employees. Some agencies also adopted more
centralized and/ or automated methods of providing retirement
education to improve the consistency and availability of
information and use resources more efficiently. GAO's Analysis
OPM and Experts Had Generally Consistent Views on Program Design
Dimensions
OPM Provided Guidance and Support to Agencies in Designing and
Implementing Their Programs
Agencies Generally Included Content Recommended by OPM and Experts
Agencies Used Multiple Presentation Formats
Executive Summary Page 5 GAO/GGD-99-27 Agencies' Retirement
Education Programs
Agencies' officials also told GAO that they generally provided
retirement education to employees during their initial orientation
and throughout their careers. Agencies that GAO reviewed
continuously provided written publications to employees by
establishing self- serve libraries or making information
electronically available on Internet Web sites. All of the
agencies sponsored seminars that were designed for those employees
who were within approximately 5 years of retirement eligibility.
To encourage or enable employees to begin planning for retirement
earlier in their careers, many of the agencies either allowed
employees with less service to attend these preretirement seminars
or sponsored additional seminars that were specifically designed
for midcareer employees who had approximately 15 years of federal
service. Agencies also provided one- onone counseling to employees
at any time upon request. Agencies' officials told GAO they
believed that retirement education is a shared responsibility
between agencies and employees. That is, agencies were responsible
for making information readily available; however, employees were
responsible for determining for themselves when and how often to
seek retirement information.
GAO is making no recommendations in this report. OPM and Commerce
provided written comments on a draft of this report, and the
Department of Defense and Internal Revenue Service (IRS) provided
oral comments. Each agency agreed with the report's contents. OPM
added that it is working continually to improve the quality and
comprehensiveness of the benefits information that employees
receive, and that GAO's findings will be very useful in enhancing
the products and services OPM makes available to agencies. OPM's
and IRS' additional comments are at the ends of chapters 2 and 3.
The other agencies reviewed told GAO that they had no comments on
the draft report. Agencies Provided
Retirement Education Early and Throughout Employees' Careers
Recommendations Agency Comments
Page 6 GAO/GGD-99-27 Agencies' Retirement Education Programs
Contents 2 Executive Summary 8 Background 8 Objectives, Scope, and
Methodology 9 Chapter 1
Introduction 13 OPM's Views Regarding Program Design and
Implementation 15
Experts' Views Regarding Program Design 16 Agency Comments 20
Chapter 2
OPM's and Experts' Recommendations for Federal Retirement
Education Programs
21 OPM Provided Retirement Education to Agencies and
Employees 21
Agencies' Retirement Education Programs Generally Included
Information Recommended by OPM and Experts
21 Agencies' Retirement Education Programs Included a
Variety of Presentation Formats 21
Agencies Made Retirement Education Available Throughout Employees'
Careers
21 Agency Comments 21 Chapter 3
Retirement Education Programs Generally Included OPM's and
Experts' Recommendations
Appendix I: Retirement Expert Biographies 28 Appendix II: Comments
From the Office of Personnel
Management 31
Appendix III: Major Contributors to This Report 32 Appendixes
Table 2.1: OPM's and Experts' Views on Recommended Timing and
Content for a Retirement Education Program
14 Tables
Contents Page 7 GAO/GGD-99-27 Agencies' Retirement Education
Programs Abbreviations
AARP American Association of Retired Persons CFP certified
financial planner COLA cost- of- living adjustment CPDF Civilian
Personnel Data File CPP chartered pension professional CSRS Civil
Service Retirement System DOD Department of Defense EBRI Employee
Benefit Research Institute FERS Federal Employees' Retirement
System FERSA Federal Employees' Retirement System Act of 1986 HRSA
Health Resources and Services Administration HUD Department of
Housing and Urban Development IRS Internal Revenue Service NOAA
National Oceanic and Atmospheric Administration OPM Office of
Personnel Management TIAA- CREF Teachers Insurance and Annuity
Association, College Retirement Equities Fund TSP Thrift Savings
Plan UFCW United Food and Commercial Workers International Union
VHA Veterans Health Administration VA Department of Veterans
Affairs
Chapter 1 Introduction
Page 8 GAO/GGD-99-27 Agencies' Retirement Education Programs
As federal employees plan for their eventual retirement from
government service, they often consider many financial and
lifestyle issues. Agencyprovided retirement education is generally
the primary source of the information that employees need to plan
for these issues before they retire. Retirement benefits represent
an important portion of total federal compensation and employees
often cite these benefits as a primary reason for staying in
government service. Thus, agencies also benefit from sponsoring
retirement education programs, which allow them to capitalize on
their comparative advantage in competitive labor markets as well
as invest in the government's human capital.
The Federal Employees' Retirement System Act of 1986 (FERSA)
granted the Office of Personnel Management (OPM) and federal
agencies broad authority to design and implement retirement
education programs for employees covered by the two largest
federal civilian retirement programs the Civil Service Retirement
System (CSRS) and the Federal Employees' Retirement System (FERS).
1 Specifically, FERSA authorizes agencies to designate retirement
counselors who are responsible for providing employees with
benefits information, and mandates that OPM establish a training
program for these agency retirement counselors. 2 FERSA also
created the Federal Retirement Thrift Investment Board to
administer the Thrift Savings Plan (TSP). The Thrift Board
provides training and information on TSP to agency personnel
offices and groups of employees upon agency request; however, it
is not responsible for providing retirement education for the
federal workforce.
CSRS, which was established in 1920, currently includes an annuity
and TSP. 3 CSRS' annuity predates the Social Security system by
several years. When the Social Security system was established,
Congress decided that employees in CSRS would not be covered by
Social Security through their federal employment. Starting in
1987, employees covered by CSRS may also contribute up to 5
percent of their salary to TSP; however, they receive no
government contributions. CSRS was closed to new entrants after
December 31, 1983, and, according to OPM actuaries, is estimated
to end in about 2070, when all covered employees and survivor
annuitants are expected to have died.
1 Approximately 7 percent of federal employees are covered by
specialized retirement programs, such as the foreign service or
judicial retirement systems. 2 Agencies generally referred to
retirement counselors and other retirement education staff as
benefits officers. 3 Employees covered by CSRS may also contribute
to a separate voluntary contribution program, which can be
withdrawn with interest or used to purchase additional annuity
upon retirement. Background
Chapter 1 Introduction
Page 9 GAO/GGD-99-27 Agencies' Retirement Education Programs
FERS was implemented in 1987 and generally covers those employees
who first entered federal service after 1983. The primary impetus
for the new program was the Social Security amendments of 1983,
which required all federal employees hired after December 1983 to
be covered by Social Security. Thus, FERS includes Social
Security, an annuity that is smaller than that provided under
CSRS, and TSP. The government automatically contributes an amount
equal to 1 percent of salary to TSP accounts for all employees
covered by FERS, regardless of whether those employees make any
voluntary contributions to their accounts. In addition, employees
covered by FERS may contribute up to 10 percent of their salaries,
up to the current legal maximum of $10,000, and receive government
matching contributions on the first 5 percent. 4
At the beginning of fiscal year 1998, CSRS and FERS covered about
2. 7 million employees, or 93 percent of the civilian workforce,
including U. S. Postal Service employees. As of fiscal year 1995,
FERS covered slightly more federal employees than CSRS.
In response to the request of Senator Carl Levin, in his former
capacity as Ranking Minority Member of the Subcommittee on
International Security, Proliferation and Federal Services, Senate
Committee on Governmental Affairs, our objectives in preparing
this report were to provide information on
what OPM officials and retirement experts view as the recommended
content, presentation formats, and timing of retirement education
programs and
OPM's and agencies' retirement education roles, responsibilities,
and practices in the context of these recommendations.
Because of time and resource constraints, we limited the scope of
our review to the education provided to employees covered by CSRS
and FERS, who represent the majority of federal civilian
employees.
To identify OPM's views on the recommended content, presentation
formats, and timing of a retirement education program, we
interviewed OPM officials and reviewed OPM's published guidance on
how agencies are to design and implement federal retirement
education programs. To identify retirement experts' views, we
interviewed a judgmentally selected
4 For the first 3 percent of salary that an employee covered by
FERS may contribute, the government contributes $1. 00 for each
$1. 00 the employee contributes. For the next 2 percent of salary,
the government contributes $0. 50 for each $1. 00 the employee
contributes. For the next 5 percent of salary that an employee may
contribute, the government contributes nothing. Objectives, Scope,
and
Methodology
Chapter 1 Introduction
Page 10 GAO/GGD-99-27 Agencies' Retirement Education Programs
group of 15 retirement experts using a structured interview that
had been pretested and provided in advance. The experts also
responded to a closeended questionnaire. We used a summary of the
experts' responses as our principal basis for identifying the
recommended content, presentation formats, and timing of a
retirement education program. In summarizing the experts'
responses to the close- ended questionnaire, we used a
supermajority criterion (i. e., agreement on the part of 10 or
more experts) to classify a list of 21 potential topics, or
content, as (1) essential; (2) recommended, but not essential; or
(3) optional. Specifically, we identified a topic as essential
when 10 or more experts responded that the topic was essential. If
the topic did not meet the criterion for being essential, we
identified it as recommended when 10 or more experts responded
that the topic was either essential or recommended. Similarly, if
the topic did not meet the criteria for being essential or
recommended, we identified it as optional when 10 or more experts
responded that the topic was essential, recommended, or optional.
To identify candidates who had the appropriate background and
experience to serve as retirement experts, we solicited and
received nominations from the following eight associations and
organizations that specialize in retirement and/ or financial
planning issues: the American Association of Retired Persons, the
Employee Benefit Research Institute, the International Association
for Financial Planning, the International Foundation of Employee
Benefit Plans, the National Association of State Retirement
Administrators, the National Conference of Public Employee
Retirement Systems, the Pension Research Council, and the Teachers
Insurance and Annuity Association.
For each candidate nominated, we reviewed the biographical
information provided by the nominating organization( s). We
selected 16 individuals who each had extensive experience with
pension or retirement issues and specific expertise on retirement
education. The selected experts collectively represented a breadth
of professional backgrounds in both the public and private
sectors, including academics, unions, financial planning, pension
administration, advocacy, financial services, and human resource
management consulting. We invited each of the selected candidates
to share their views on retirement education, and 15 agreed to do
so. Appendix I provides more information on the experts with whom
we consulted.
To identify OPM's and agencies' retirement education roles,
responsibilities, and practices in the context of the
recommendations on program content, presentation formats, and
timing, we interviewed
Chapter 1 Introduction
Page 11 GAO/GGD-99-27 Agencies' Retirement Education Programs
officials representing OPM, the Thrift Board, and 12 randomly
selected federal agencies that had 1,000 or more employees and
whose headquarters were located within the Washington, D. C.,
metropolitan area. We used a structured interview that had been
pretested and provided to the 12 agencies in advance. We also
analyzed documents and data provided by the agencies' officials.
We used a summary of the agencies' practices as the principal
basis for comparing the actual practices of the 12 agencies with
the recommended content, presentation formats, and timing
identified by OPM officials and the experts. We did not
independently verify agencies' responses regarding the specifics
of the content, performance formats, and timing of their
retirement education programs. Thus, although we used terms such
as provided and sponsored to describe agencies' practices, we were
generally referring to what agencies told us they did.
To develop the sample of agencies for our review, we used
information from the spring 1997 Central Personnel Data File
(CPDF) an automated information system that contains individual
records for most federal civilian employees and is maintained by
OPM. The list of agencies used in selecting this sample included
68 organizations that represented a total of 1,682,391 federal
employees who were covered by CSRS or FERS. We stratified the 68
organizations according to size (1,000 to 9,999 employees; 10,000
to 99,999 employees; and 100,000 or more employees) and randomly
selected 4 agencies from each group. For the Department of Defense
(DOD), our list of 68 organizations included only the Departments
of the Army, Air Force, and Navy.
On this basis, we selected the following 12 agencies for review:
the International Trade Administration and National Oceanic and
Atmospheric Administration (NOAA) of the Department of Commerce;
the Bureau of Reclamation of the Department of the Interior; the
Internal Revenue Service (IRS), U. S. Customs Service, and U. S.
Secret Service of the Department of the Treasury; the Health
Resources and Services Administration (HRSA) and the National
Institutes of Health of the Department of Health and Human
Services (HHS); the Department of Housing and Urban Development
(HUD); the Veterans Health Administration (VHA) of the Department
of Veterans Affairs (VA); and the Departments of the Navy and Air
Force of DOD. The sampled agencies employed about 42 percent of
the employees covered by CSRS or FERS from our sampling universe.
As agreed, our analysis did not address the effectiveness of OPM's
administration of federal retirement education, agencies'
programs, or the
Chapter 1 Introduction
Page 12 GAO/GGD-99-27 Agencies' Retirement Education Programs
retirement education that individual federal employees might
receive. Also, we did not attempt to independently validate the
information provided to us by OPM and the 12 agencies. Although we
audited the reliability of CPDF data for fiscal year 1996 and
found it sufficiently reliable for most governmentwide analyses,
we did not update that audit. 5 However, we are not aware of
changes in the way that agencies submit or OPM processes CPDF data
that would materially affect the reliability of the data. We used
a random sample to have an objective, unbiased sample. However, as
a consequence of our small sample size, the retirement education
practices described in this report are not generalizable to all
agencies that employ 1,000 or more employees and have headquarters
in the Washington, D. C., metropolitan area. We are reporting
solely on the practices of those agencies we surveyed.
We did our review in Washington, D. C., from January 1998 to
February 1999 in accordance with generally accepted government
auditing standards.
We requested comments on a draft of this report from the Director
of OPM; the Secretaries of the Department of Commerce, DOD, HHS,
HUD, the Interior, the Treasury, and VA; the Commissioner of
Internal Revenue; or their designees. OPM and Commerce provided
written comments. DOD's and IRS' comments were provided orally by
the audit liaison and legislative affairs officer, respectively.
These agencies' comments are presented at the ends of chapters 2
and 3, and OPM's written comments are reprinted in appendix II.
HHS, HUD, the Interior, the Treasury's Customs Service and Secret
Service, and VA said they had no comments on the draft report.
5 See OPM's Central Personnel Data File: Data Appear Sufficiently
Reliable to Meet Most Customer Needs (GAO/GGD-98-199, Sept. 30,
1998).
Chapter 2 OPM's and Experts' Recommendations for Federal
Retirement Education Programs
Page 13 GAO/GGD-99-27 Agencies' Retirement Education Programs
OPM and the experts with whom we consulted held generally
consistent views regarding the recommended content, presentation
formats, and timing of retirement education programs. OPM provided
guidance to federal agencies on CSRS and FERS administration in
its CSRS and FERS Handbook for Personnel and Payroll Offices,
benefits administration letters, and other advisory documents.
OPM's guidance presented various recommendations regarding the
design and implementation of agency retirement education programs.
1 The retirement experts with whom we consulted also provided
recommendations regarding the content, presentation formats, and
timing of a retirement education program. 2
Although the terminology used by OPM and the experts was not
identical, we considered the substance of their recommendations
regarding content, presentation formats, and timing to be
generally consistent. For example, OPM and the experts agreed that
new employees need basic information on their retirement system's
characteristics, all employees need financial planning information
on a periodic basis during their careers, and employees nearing
retirement need transition planning information. Table 2.1
summarizes OPM's and the experts' views regarding the content and
timing of agency- provided retirement education programs.
1 See CSRS and FERS Handbook for Personnel and Payroll Offices,
Chapter 1: Administration and General Provisions, Chapter 40:
Planning and Applying for Retirement, and Chapter 83: Self-
Evaluation Guide for Agency Administration of Employee Benefits
Programs.
2 The experts with whom we consulted told us that their
recommendations apply equally to public and private sector
employers and employees. We did not ask the experts to evaluate or
comment on agencies' specific retirement education practices.
Chapter 2 OPM's and Experts' Recommendations for Federal
Retirement Education Programs
Page 14 GAO/GGD-99-27 Agencies' Retirement Education Programs
OPM Retirement Experts Early career Plan type Plan type a
Eligibility requirements Participation and vesting requirements a
Employee and agency contributions Employee and agency
contributions a Voluntary contribution program b Investment
alternatives and strategies a TSP withdrawal options b Debt
management a Military or prior civilian service deposits
Disability and survivor insurance a Designating a beneficiary
Ongoing education Financial planning b Plan type a Annual
individual benefits statements Participation and vesting
requirements a Periodic updates about changes to benefits Employee
and agency contributions a Military and civilian service deposits
Estimated assets needed to retire Effect of divorce or separation
agreements Investment alternatives and strategies a Voluntary
contribution program b Debt management a Retention of health and
life insurance benefits b Tax considerations
Projected benefit amounts and cost- of- living adjustments (COLA)
Minimum voluntary retirement dates Disability and survivor
insurance a Social Security and Medicare
Preretirement 5 years before eligibility Financial planning b New
career/ Working part- time in retirement
Retention of health and life insurance benefits b Considering/
Planning for relocation Effects of deposits/ redeposits on service
credit b Planning for increased leisure time Social Security
coverage
1 year before eligibility Meeting age and service requirements
Survivor benefit considerations Voluntary contribution program b
Annuity estimates COLAs TSP withdrawal options b Effects of
deposits/ redeposits on service credit b
6 months before retirement Resolving financial indebtedness to the
agency Deciding whether to wave military retired pay Maximum
annuity amounts Medicare eligibility
No consensus on timing Retention of health/ life insurance
benefits Medigap/ Long- term care insurance Early/ Deferred
retirement options Withdrawal options Inheritance planning
Deciding when or whether to retire Health maintenance
Table 2.1: OPM's and Experts' Views on Recommended Timing and
Content for a Retirement Education Program
Chapter 2 OPM's and Experts' Recommendations for Federal
Retirement Education Programs
Page 15 GAO/GGD-99-27 Agencies' Retirement Education Programs
Note: GAO's characterization of OPM's and the experts' views was
not intended to be exhaustive, thus the reader should not
interpret the absence of a topic in one column to mean that OPM
and the experts disagreed on the importance of that topic. a The
experts recommended that this topic be covered at multiple points
in employees' careers.
b OPM recommended that this topic be covered at multiple points in
employees' careers. Source: GAO analysis of data obtained from OPM
and retirement experts.
OPM's views regarding the design and implementation of agencies'
retirement education programs were reflected in the guidance and
support it provided to agencies. While allowing agencies to
exercise broad flexibility in designing and implementing their
retirement education programs, OPM recommended that agencies
include certain key topics or content, present information through
various formats, and educate employees throughout their careers.
The CSRS and FERS Handbook served as the principal vehicle for
communicating OPM's guidance, and OPM updated that guidance on a
periodic basis through handbook revisions and benefits
administration letters sent directly to the agencies.
OPM's guidance recommended that federal agencies consider
including certain content as part of their retirement education
programs. OPM's recommendations were not intended to be exhaustive
and agencies were not required to include them in their retirement
education programs. OPM's recommended topics included the
following:
plan type, including whether an employee is covered by CSRS or
FERS;
eligibility, including minimum age and service requirements for
employees to (1) participate in the plan and (2) retire with full
benefits;
employer and employee contributions allowed or required under
CSRS or FERS;
voluntary contribution program;
financial planning, including various investment strategies;
military or prior civilian service deposits, including whether an
employee has prior service for which a deposit or redeposit is
owed and the effects of payment or nonpayment on an annuity;
TSP withdrawal options, including when a retiree may begin
withdrawing TSP savings as well as the monetary advantages and tax
effects of the various withdrawal options;
annuity estimates;
divorce or separation, including the potential effect of divorce
or separation agreements on retirement benefits;
designating a beneficiary, including the cost and amount of
survivor benefits as well as spousal eligibility for benefits;
retaining health and life insurance benefits in retirement; OPM's
Views
Regarding Program Design and Implementation
OPM Recommended That Agencies Include Certain Topics in Their
Retirement Education Programs
Chapter 2 OPM's and Experts' Recommendations for Federal
Retirement Education Programs
Page 16 GAO/GGD-99-27 Agencies' Retirement Education Programs
cost- of- living adjustments (COLA), including how retirement
benefits will be adjusted periodically for inflation depending on
CSRS or FERS coverage; and
Social Security and Medicare, including whether employees are
covered by these programs and how the programs integrate with
their other benefits.
OPM recommended that agencies include written, interactive, and
electronic formats as part of their retirement education programs.
For example, OPM recommended that agencies use formats such as
pamphlets and brochures, periodic workshops and seminars,
Intranet/ Internet Web sites, and recorded telephonic information
in their retirement education programs. According to OPM, agencies
that use multiple educational formats are likely to increase the
number of employees that they reach through their retirement
education program.
OPM recommended that agencies provide employees with retirement
information at various stages of their career, including: early
career, 5 years before retirement eligibility, 1 year before
retirement eligibility, 6 months before retirement, and 2 months
before retirement. 3 OPM also recommended that agencies cover
certain topics with employees throughout their careers and
periodically update information about any changes occurring to
federal retirement programs or benefits. Table 2.1 summarizes
OPM's recommendations on when agencies may wish to introduce
topics to employees.
OPM recommended that agencies identify and invite employees to
attend a preretirement seminar within about 5 years before their
retirement eligibility and about 1 year before their actual
planned retirement. Moreover, OPM believed that agencies should
contact employees within 1 year of retirement eligibility and
offer those employees one- on- one counseling.
Consistent with OPM's guidance, the retirement experts with whom
we consulted recommended specific content, presentation formats,
and timing that they considered essential for a retirement
education program.
3 OPM's guidance regarding the retirement education recommended
for employees within 2 months of retirement was focused on
procedural guidelines rather than content, presentation formats,
and timing. OPM Recommended That
Agencies Use Multiple Formats in Their Programs
OPM Recommended That Retirement Education Be Provided Throughout
Employees' Careers
Experts' Views Regarding Program Design
Chapter 2 OPM's and Experts' Recommendations for Federal
Retirement Education Programs
Page 17 GAO/GGD-99-27 Agencies' Retirement Education Programs
A super majority (at least 10 of 15) of the experts considered 13
topics to be essential to a retirement education program, while
they identified 6 topics as recommended, but not essential, and 2
topics as optional.
The experts identified the following 13 topics as being essential
to a retirement education program:
plan type, including whether an employee is covered by CSRS or
FERS;
participation and vesting requirements, or the amount of time
that employees must work before they are eligible to (1)
contribute to and (2) own, or become vested in, accrued benefits
of their plan;
employer and employee contributions that are allowed and/ or
required;
estimated assets needed to retire that reflect individual
employee's desired retirement date, income level, and lifestyle;
investment alternatives and strategies, including information on
the association between investment risk and return, the benefits
of saving earlier rather than later, and the importance of
diversification across different types of investment vehicles;
debt management that provides employees with information on how
to manage limited resources efficiently and enhance their ability
to save;
tax considerations, including the benefits of saving with pretax
versus after- tax dollars;
retention of agency- provided health and life insurance benefits;
minimum voluntary retirement dates;
projected benefit amounts and COLA's;
disability and survivor insurance, including how these programs
are integrated with their other retirement benefits and any
associated costs to employees;
Social Security and Medicare, including whether employees are
covered by these programs, how the programs are integrated with
their other retirement benefits, and any associated costs to
employees; and
Medigap and long- term care insurance, that is, insurance
designed to provide coverage for medical costs not covered by
Medicare or other federal health insurance.
The experts also identified the following six topics as
recommended, but not essential, for a retirement education
program:
health maintenance, both before and after retirement;
early or deferred retirement options, including circumstances
under which employees would be eligible to receive reduced
retirement benefits Experts Regarded Certain
Topics as Essential Content for a Retirement Education Program
Chapter 2 OPM's and Experts' Recommendations for Federal
Retirement Education Programs
Page 18 GAO/GGD-99-27 Agencies' Retirement Education Programs
(1) earlier than the minimum voluntary retirement date or (2)
later than the time of actual separation from an agency;
deciding when and whether to retire;
withdrawal options, such as taking accrued benefits as an annuity
versus as a lump- sum payment;
postretirement employment, including information on starting a
new career or working part- time; and
inheritance planning, including the preparation of wills and
other methods of transferring estates to survivors.
Finally, the experts identified the following two topics as
optional components of a retirement education program:
relocation, including whether and where employees might wish to
relocate in retirement, and
planning for increased leisure time. The experts believed that
agencies should avail themselves of a broad range of presentation
formats in their retirement education programs. For example,
agencies could distribute written guidance, such as brochures and
newsletters; present information more interactively by sponsoring
seminars, workshops, or one- on- one counseling sessions; and/ or
provide information upon request by establishing electronic
systems, such as Intranet/ Internet Web sites and recorded
telephonic response systems. The experts believed that each
presentation format has its advantages and disadvantages.
Moreover, no one format would be optimal for communicating with
all employees, because individual learning styles vary.
The experts also believed that each individual employee's need for
information on a specific retirement education topic at any given
point in their career is influenced by multiple demographic
factors, including their age, marital status, knowledge of
financial planning concepts, years until they are eligible or plan
to retire, and health status. Thus, agencies are challenged with
designing a retirement education program that can meet the needs
of all their employees over their entire careers. The experts
recommended that agencies focus on their employees' needs when
selecting which presentation formats to include in their programs.
To address individual employee learning styles and content needs,
the experts recommended that agencies design their retirement
education programs to include multiple and interactive formats to
the extent possible. Specifically, they viewed one- on- one
counseling and seminars as the optimal methods of presenting
retirement education. Although these Experts Recommended
That Agencies Use Multiple and Interactive Presentation Formats
Chapter 2 OPM's and Experts' Recommendations for Federal
Retirement Education Programs
Page 19 GAO/GGD-99-27 Agencies' Retirement Education Programs
options represent the most costly methods of providing such
information, the experts told us that both formats allow agencies
to expose employees to a broad range of topics that employees then
can pursue further on an asneeded basis. Moreover, employees
benefit from being able to get direct and immediate responses to
any questions they may have. The experts told us that one- on- one
counseling represents the most customized source of information
for employees; however, seminars allow for group interactions that
may enrich the information available to employees.
To better meet the individual content needs of different
employees, the experts recommended that agencies choosing to use
seminars or workshops should do so by offering customized sessions
for specific groups, or segments, of their workforce. For example,
agencies might provide seminars that are targeted to employees at
different career stages, such as early career, midcareer, and
preretirement. Agencies then could target their content to include
those topics that are most relevant to the attending group of
employees. This approach would also provide employees with the
opportunity to attend seminars periodically throughout their
careers.
The experts told us that written materials also play an important
role in retirement education. These materials, which can be
provided in paper or on electronic Web sites, allow agencies to
provide consistent and detailed information to all employees in a
cost- efficient way. Employees can use such reference materials as
often as they like and at their convenience. However, many of the
experts with whom we consulted did not recommend that agencies
rely on written materials as their primary presentation format
because employees may too readily ignore, file, or throw away such
materials. In particular, the experts said that younger employees
may regard information on retirement planning as something to
which they need not devote much attention.
The experts recommended that agencies introduce many of the topics
identified as essential early within employees' careers. The
experts also recommended that agencies update their employees on
this information on a regular basis throughout their careers
approximately once every 1 to 5 years. The table at the beginning
of this chapter (see table 2.1) summarizes the experts'
recommendations regarding the content that agencies may wish to
present at various times in employees' careers.
The experts recommended that agencies introduce basic plan
information to employees within their first year of employment.
Additionally, the experts recommended that agencies update
employees regularly (i. e., Experts Recommended
That Agencies Introduce Retirement Education Early and Often in
Employees' Careers
Chapter 2 OPM's and Experts' Recommendations for Federal
Retirement Education Programs
Page 20 GAO/GGD-99-27 Agencies' Retirement Education Programs
continuously or at least once a year) on many of the topics that
the experts identified as essential, recommended, or optional
after the topics have first been introduced. The experts also
recommended that agencies introduce information on minimum
retirement dates to employees more than 5 years before they are
eligible for full retirement benefits and information on
postretirement employment, relocation, and planning for increased
leisure time late in employees' careers.
The experts told us that all employees need information early and
often during their careers, regardless of whether they are covered
by CSRS or FERS. However, the focus or content of agency- provided
information to employees may need to be tailored to address the
unique aspects of each retirement system. For example, the experts
told us that it is particularly important for employees covered by
FERS to understand the level of allowed contributions to their TSP
accounts, the amounts of agency matching contributions that are
available, the risk and investment returns associated with each
available investment alternative, and the benefits generally
associated with beginning to contribute to TSP early in one's
career. While employees' decisions have a limited impact on the
amount of their future annuities from CSRS and FERS, employees may
benefit from receiving information early in their careers on such
topics as the future projected value of their annuities, vesting
requirements, and available withdrawal options. Employee decisions
made with or without information on such topics could affect the
amount of an employee's future retirement benefits.
OPM, Commerce, DOD, and IRS agreed with our findings. In its
written comments (see app. II), OPM added that it was gratified
that there is agreement among our retirement experts, OPM, and
agencies on the makeup of retirement education programs. OPM said
it was working continually to improve the quality and
comprehensiveness of benefits information employees receive and
that our findings would be very useful in its efforts to enhance
the products and services it makes available to agencies. IRS
similarly indicated agreement with OPM's and our experts'
recommendations and said that it would consider them in
contemplating whether improvements could be made regarding the
education provided early within employees' careers. Agency
Comments
Chapter 3 Retirement Education Programs Generally Included OPM's
and Experts' Recommendations
Page 21 GAO/GGD-99-27 Agencies' Retirement Education Programs
OPM and the agencies we surveyed both played a role in providing
retirement education to federal employees covered by CSRS and
FERS. As part of its governmentwide responsibility for federal
retirement systems, OPM supplemented the guidance it provided to
agencies on the design and implementation of retirement education
programs by developing educational materials, sponsoring training,
and providing technical advice to agencies' benefits personnel.
Agencies, which had primary responsibility for developing
retirement education programs, generally provided information to
employees on topics such as the basic features of CSRS and FERS
and financial planning issues for retirement, which were
recommended by OPM and the retirement experts with whom we
consulted. The agencies distributed this information to employees
using a variety of written, interactive, and electronic
presentation formats that were available throughout employees'
careers, also as recommended by OPM and the experts.
In addition to providing agencies with guidance on how to design
and implement their retirement education programs (see ch. 2), OPM
also provided educational materials and other support to agencies'
benefits officers and federal employees. Specifically, OPM
developed educational materials that updated agencies on any
changes in the law or regulations affecting retirement programs
and that agencies could distribute directly to federal employees
as part of their programs. OPM also supported agencies by
sponsoring training and providing technical assistance to resolve
case- specific issues for benefits staff.
OPM published retirement education materials that agencies could
distribute to federal employees or use as guidance in developing
their own customized program materials. These materials included
brochures and pamphlets as well as videos and CD- ROM programs
that provided detailed information on federal retirement programs,
such as retirement eligibility requirements, annuity formulas, TSP
contribution limits, requirements for maintaining health and life
insurance in retirement, and survivor benefits. Agencies and
employees could also access OPM's Web site for retirement
information and links to other related Web sites, such as the
Thrift Board's site for TSP participants.
Although OPM indicated in its guidance that supplying retirement
education to employees is primarily an agency role, officials told
us that they supported agencies' efforts in these ways to help
agencies cope with increased workloads and to allow agencies'
staff to devote more time to such activities as providing one- on-
one counseling. For example, during OPM Provided
Retirement Education to Agencies and Employees
Chapter 3 Retirement Education Programs Generally Included OPM's
and Experts' Recommendations
Page 22 GAO/GGD-99-27 Agencies' Retirement Education Programs
the 1998 open season, when employees covered by CSRS could elect
to transfer to FERS, OPM provided agencies with detailed
information on the specifics of each retirement program,
frequently asked questions and answers for individuals considering
whether to transfer to FERS, and a computer model that allowed
agencies to project what an individual's benefits might be, given
different scenarios.
Consistent with statutory requirements, OPM also supported
agencies' retirement education programs by providing training for
benefits officers on a periodic basis. Specifically, OPM sponsored
quarterly meetings of the interagency network for retirement and
insurance, an annual Fall Festival of Training, an annual benefits
officer conference, and other training courses on an as- needed
basis throughout the year, all of which provided agencies'
personnel with both training and networking opportunities.
In support of agencies' retirement counseling services, OPM
provided expert advice and assistance on specific technical issues
or cases. OPM officials told us that they have also provided
direct support to certain agencies during times of unusual
requirements, such as when OPM staff helped to facilitate the
delivery of federal retirement and insurance benefits to those
employees and survivors affected by the Oklahoma City bombing in
1995. At the time of our review, officials told us that OPM was
developing a benefits service center that would augment agencies'
retirement education programs by providing benefits officers and
individual employees with customized benefits and retirement
information and counseling.
Most of the agencies that we surveyed indicated that OPM was
effective and timely in communicating retirement information and
benefits changes to a great or very great extent. Moreover, OPM
officials told us that they conducted a customer satisfaction
survey in fiscal year 1998 that included all agencies' human
resources directors and a sample of agencies' benefits officers.
They told us that the results of this survey indicated that
agencies generally rated OPM guidance materials as excellent and
were highly satisfied with OPM's efforts to share information and
provide technical assistance.
Chapter 3 Retirement Education Programs Generally Included OPM's
and Experts' Recommendations
Page 23 GAO/GGD-99-27 Agencies' Retirement Education Programs
The retirement education programs of the agencies we surveyed
generally included those topics recommended by OPM and the experts
with whom we consulted. For example, agencies' officials told us
that they included information on the basic features of CSRS and
FERS, financial planning for retirement, and maintaining federal
health and life insurance in retirement. Agencies also provided
information to employees on whether and/ or how Social Security
would contribute to their retirement benefits, particularly for
those employees who were covered by FERS. Officials said that
agencies provided retirement planning information, but not advice,
regardless of the topics included.
Agencies we surveyed provided their employees with information on
a variety of topics related to the basic features of CSRS and
FERS. For example, agency materials that we reviewed typically
included information on participation and vesting requirements for
both the annuity and TSP components of each retirement system,
required and voluntary contributions made by agencies and/ or
employees, minimum age and service requirements for full
retirement benefits, as well as survivor and disability insurance
benefits.
In addition to this descriptive information on federal retirement
benefits, the agencies also typically provided information that
their employees could use to plan for their future retirements.
For example, agencies commonly provided employees with information
on their projected future benefits, tools for determining what
level of assets might be needed in retirement, and general
investment strategies for accumulating additional assets if
desired.
Because federal employees covered by CSRS and FERS are eligible
for continued health and life insurance benefits in retirement,
agencies we surveyed emphasized the importance of maintaining
these benefits in their retirement education programs. For
example, the agencies informed employees that they generally must
be enrolled in the federal health and life insurance benefits
programs for the full 5 years immediately preceding their
retirement to qualify for these benefits. The agencies also
provided information on how employees could provide these benefits
for their survivors if they so choose.
Agencies' officials told us that they also included information in
their retirement education programs on how Social Security is
integrated with federal annuity and TSP benefits. This information
is particularly important to those employees covered by FERS,
because Social Security represents one of the three components of
their retirement plan. Agencies Agencies' Retirement
Education Programs Generally Included Information Recommended by
OPM and Experts
Chapter 3 Retirement Education Programs Generally Included OPM's
and Experts' Recommendations
Page 24 GAO/GGD-99-27 Agencies' Retirement Education Programs
likewise provided information on Social Security to employees
covered by CSRS, because a portion of these employees may also be
eligible for full or reduced Social Security benefits on the basis
of their spouses' work histories, work they did before joining the
federal workforce, and/ or work they plan on doing following their
retirement from federal service.
Consistent with OPM and expert recommendations, the officials
representing the agencies we surveyed told us that they used a
variety of presentation formats in their retirement education
programs, including written publications, interactive formats such
as seminars and one- on- one counseling, and electronic formats
such as Web sites and automated systems.
Agencies we surveyed used numerous publications, such as brochures
and newsletters, to provide detailed information to employees on
their retirement plans and issues to consider in planning for
their retirement. Although a few agencies generated some of their
own customized materials, the agencies we surveyed generally used
written materials made available by OPM or the Thrift Board.
According to the agencies' officials, these materials were
convenient and high- quality sources of information for employees.
Agencies also used Web sites to make many of these publications
more readily available.
Agencies' officials said that they supplemented their written
reference materials by using more interactive formats, in
particular, seminars and one- on- one counseling. Agencies offered
seminars to expose employees to information on a wide variety of
topics, which employees could then individually pursue in more
detail as needed or desired. When employees requested one- on- one
counseling sessions, agencies provided employees with highly
customized retirement planning information, including benefits
decisions that needed to be made at retirement and the specific
steps needed to apply for retirement. To ensure that employees
received expert information on a wide range of topics, agencies we
surveyed generally contracted out for seminars. However, the
agencies did not contract for one- on- one counseling. Agencies'
officials told us that their staff were best able to provide
counseling to employees, because they had access to employees'
personnel records, were well- informed on the inherent
complexities of the federal retirement programs, and were in a
position to take personnel actions on behalf of employees, if
necessary.
Agencies we surveyed also used a variety of electronic media to
further distribute retirement education to their employees,
including videos, telephone response systems, Intranet/ Internet
Web sites, and computer Agencies' Retirement
Education Programs Included a Variety of Presentation Formats
Chapter 3 Retirement Education Programs Generally Included OPM's
and Experts' Recommendations
Page 25 GAO/GGD-99-27 Agencies' Retirement Education Programs
simulation models. For example, several agencies' officials told
us that they videotaped their retirement seminars (1) to make
these sessions available to geographically dispersed employees who
might otherwise be unable to attend and/ or (2) allow employees to
view the seminars multiple times at their convenience. The
agencies also commonly provided retirement information using Web
sites that included links to other federal sources of retirement
information, including OPM, the Thrift Board, and the Social
Security Administration.
The Air Force, IRS, and HUD also used a centralized and automated
call center to provide retirement information to geographically
dispersed employees in a manner that they considered to be
consistent and cost efficient. Each of these agencies used an
interactive system that allowed employees to access a variety of
personnel information, including retirement education, by calling
a toll- free telephone number. In addition to prerecorded
information, employees could reach a benefits counselor who had
access to individual personnel records and could provide answers
to specific questions. Agencies' officials said that these
centralized and more automated systems were developed in response
to downsizing that resulted in the agencies having fewer personnel
staff available to provide retirement education to employees.
Other agencies, including HRSA and VHA, told us that they were
considering adopting a similar approach. OPM officials believed
that such systems are likely to become more common across the
federal service.
Consistent with OPM and expert recommendations, the agencies we
surveyed made retirement education available continuously
throughout employees' careers. Agencies' officials told us that
they view retirement education as a shared responsibility between
the agencies and employees. That is, agencies were responsible for
making such information readily available; however, employees were
also responsible for determining when and how often to seek this
information.
Agencies' officials told us that they provided brochures and other
written retirement education materials to employees early in their
careers as a part of new employee orientations. Written materials
were then provided periodically on an as- needed basis. For
example, agencies' officials told us that they provided their
employees with revised publications during the 1998 CSRS to FERS
open season. The agencies' officials also told us that their
payroll offices mail annual benefits statements to employees that
contain information on benefits earned to- date and their
projected future value at the time of retirement eligibility.
Agencies also provided publications on a self- serve basis using
centralized benefits resource Agencies Made
Retirement Education Available Throughout Employees' Careers
Chapter 3 Retirement Education Programs Generally Included OPM's
and Experts' Recommendations
Page 26 GAO/GGD-99-27 Agencies' Retirement Education Programs
centers/ libraries and/ or posting these documents on their
retirement Web sites.
All of the agencies we surveyed sponsored retirement seminars that
were designed for employees who were approximately within 5 years
of being eligible to retire. However, several agencies' officials
told us that employees who had more than 5 years before becoming
eligible were also allowed to attend these seminars, space
permitting. Moreover, five of the surveyed agencies (i. e., the
Air Force, NOAA, the Bureau of Reclamation, HRSA, and Customs)
sponsored separate midcareer seminars that were designed to
address topics most relevant to employees with approximately 15
years of federal service. These agencies' officials told us that
they provided these additional seminars because they felt that
attending a seminar for the first time at 5 years before
retirement might be too late to allow some employees to fully
prepare for retirement when they first become eligible. Thus, many
federal employees had the option of taking more than one
retirement seminar during their careers.
Finally, the agencies we surveyed made retirement education
available to employees throughout their careers using a variety of
other formats, including the Web sites and automated information
systems we previously discussed. All of the agencies we surveyed
told us that one- on- one counseling was available to employees at
any point in their careers upon request.
OPM, Commerce, DOD, and IRS agreed with our findings. In its
written comments (see app. II), OPM said it believes very strongly
that employees should receive information about their benefits
regularly throughout their careers so that retirement is simply
the culmination of a long planning process. OPM also commented
that it is very important to make information available in a
variety of ways to meet the varying needs of both employing
agencies and their employees. IRS said that it is currently
delivering preretirement and ongoing education programs that
generally include the information recommended by OPM and our
retirement experts, and that it may consider whether improvements
could be made to the education provided to employees early in
their careers. Agency Comments
Page 27 GAO/GGD-99-27 Agencies' Retirement Education Programs
Appendix I Retirement Expert Biographies
Page 28 GAO/GGD-99-27 Agencies' Retirement Education Programs
David Blitzstein is the Director of the Office of Negotiated
Benefits at the
United Food and Commercial Workers International Union (UFCW). He
is also a Trustee of the UFCW Industry Pension Fund and the UFCW
National Health and Welfare Fund. Mr. Blitzstein serves as a
member of the National Coordinating Committee for Multiemployer
Plans and the Employee Benefit Research Institute and as Director
of the National Commission for Quality Assurance.
Madeleine d'Ambrosio is Vice President of Education and Financial
Support Services at Teachers Insurance and Annuity Association,
College Retirement Equities Fund (TIAA- CREF). Ms. d'Ambrosio is a
Certified Employee Benefit Specialist whose responsibilities at
TIAA- CREF have included training, financial guidance and advice,
and the development of educational seminars. She is a member of
both the National Association of Women in Education and the
Financial Women's Association.
Rick Garnitz is President of LifeSpan Services, Inc. Mr. Garnitz
works directly with corporations, multiemployer plans, unions, and
the public sector in the development of employee midlife planning
and preretirement planning. He has also taught marketing and
management at Georgia State University in Atlanta.
Patricia P. Houlihan is a Certified Financial Planner (CFP) at
Cavill and Company. Ms. Houlihan serves on the Board of Governors
of the CFP Board of Standards and is a member of the International
Association for Financial Planning. She has also served as an
adjunct professor in the College for Financial Planning at George
Washington University.
John E. Lawson has been the Executive Director of the Houston
Police Officers Pension System since 1994. Mr. Lawson is a retired
police sergeant who has previously worked as a financial
consultant for Merrill Lynch. He is currently a member of the
Texas Association of Public Employee Retirement Systems, the
National Conference on Employee Retirement Systems, and the
Association for Investment Management and Research. Mr. Lawson is
a CFP and a Chartered Pension Professional (CPP).
Olivia S. Mitchell is the Executive Director of the Pension
Research Council at the Wharton School of the University of
Pennsylvania. Also at the Wharton School, Ms. Mitchell is a
Professor of Insurance and Risk Management and a Senior Fellow at
the Wharton Financial Institutions Center and the Leonard Davis
Institute. Ms. Mitchell is a Research Associate at the National
Bureau of Economic Research as well.
Appendix I Retirement Expert Biographies
Page 29 GAO/GGD-99-27 Agencies' Retirement Education Programs
Diane Oakley is Vice President of Associations and Government
Relations at TIAA- CREF. Ms. Oakley has spent much of her career
directly counseling colleges and universities on all aspects of
their employee benefit programs. She is the Chair of the Education
Committee of the American Savings Education Council, a member of
the Working in Employee Benefits, and a member of the Secure
Retirement Coalition. Ms. Oakley holds a M. B. A. in Finance from
Fordham University.
Martha Priddy Patterson is Director of Employee Benefits Policy
and Analysis at KPMG Peat Marwick. Ms. Patterson conducts and
authors the annual survey Retirement Benefits in the 1990s. She is
also the author of the book entitled The Working Woman's Guide to
Retirement Planning: Saving and Investing Now for a Secure Future.
Ms. Patterson is a member of the District of Columbia, Texas, and
Virginia state bars, as well as the U. S. Supreme Court bar and
local federal bars.
Louise Piazza is a Senior Program Specialist for Economic
Security/ Work Issues at the American Association of Retired
Persons (AARP). In this capacity, Ms. Piazza manages and develops
program materials for retirement planning and financial planning
programs. Additionally, Ms. Piazza has led AARP research efforts
on retirement savings behavior.
Carlos Resendez is the CEO of the Resendez Group. Mr. Resendez has
served as the Executive Director of the National Conference on
Public Employee Retirement Systems, the Executive Director of the
Texas Permanent School Fund, the Executive Director of the San
Antonio Fire and Police Pension Fund, and the Chairman of the
Public Pension Coordinating Council.
Dallas L. Salisbury is President and CEO of the Employee Benefit
Research Institute (EBRI) a nonprofit organization that conducts
independent public policy research and education on economic
security and employee benefits. Mr. Salisbury's past experience
includes work as the Assistant Executive Director for policy at
the Pension Benefit Guaranty Corporation and the Assistant
Administrator for Policy and Research at the Pension and Welfare
Benefits Administration of the U. S. Department of Labor.
Donald H. Sauvigne is the Program Director of IBM Corporation's
Retirement and Capital Accumulation Program. As program director,
he manages the design and administration of IBM's retirement
programs. Mr. Sauvigne is a member of the ERISA Industry
Committee's Board of Directors, a Trustee of EBRI, a member of the
Board of Trustees for the
Appendix I Retirement Expert Biographies
Page 30 GAO/GGD-99-27 Agencies' Retirement Education Programs
Council on Employee Benefits, and a founding member of the
American Savings Education Council.
Robert C. Toomey has been the Director of the South Carolina
Retirement Systems since 1996. Mr. Toomey is Chairman of the
Deferred Compensation Commission, a member of the Executive
Committee of the State Quality Network, and a member of the Board
of Regents of the South Carolina Executive Institute. He earned
his M. B. A. from Cornell University and his Ph. D. in Finance
from the University of South Carolina.
Mary Most Vanek has served as the Executive Director of the Public
Employees Retirement Association of Minnesota since 1997. Ms.
Vanek has spent her career working on pension policy development
and analysis, plan design, and retirement education and
counseling. Ms. Vanek is a member of the National Preretirement
Education Association.
James O. Wood, Esq., is Executive Director of the Louisiana State
Employees' Retirement Systems. Mr. Wood is a Certified
Compensation Professional, Senior Professional of Human Resources,
and Certified Public Manager. He also serves on the U. S.
Department of Labor ERISA Advisory Council. Mr. Wood holds a J. D.
in ERISA studies from Loyola University.
Appendix II Comments From the Office of Personnel Management
Page 31 GAO/GGD-99-27 Agencies' Retirement Education Programs
Appendix III Major Contributors to This Report
Page 32 GAO/GGD-99-27 Agencies' Retirement Education Programs
Larry H. Endy, Assistant Director, Federal Management and
Workforce Issues Jennifer S. Cruise, Assistant Director,
Federal Management and Workforce Issues Jeffery A. Bass,
Evaluator- in- Charge Gregory H. Wilmoth, Supervisory Social
Science Analyst Charlesetta M. Bailey, Senior Evaluator Thomas C.
Fox, Evaluator Rebecca Shea, Social Science Analyst
Alan N. Belkin, Assistant General Counsel Robert J. Heitzman,
Senior Attorney
Margaret T. Wrightson, currently GGD's Associate Director of Tax
Policy and Administration Issues, and Stephen M. Schmal, GAO's
Chief of Personnel's Employee Relations and Retirement Branch,
also contributed to this report. General Government
Division, Washington, D. C.
Office of the General Counsel, Washington, D. C.
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