Status of GAO 401(k) Reports

January 17, 2007

The Government Accountability Office released a report stating that private defined contribution savings will not be adequate for many workers, particularly low income workers. The report’s projections show almost 37 percent of workers reaching retirement have no plan savings and workers in the lowest income quartile have only have replacement rates of 10.3 percent on average, with 63 percent of these workers having no plan savings at retirement. By contrast it projects that the highest-income workers will have average replacement rates of 34 percent. GAO Report: Low Defined Contribution Plan Savings May Pose Challenges to Retirement Security, Especially for Many Low-Income Workers

The next Government Accountability Office study of 401(k) plans, expected to be released in February, will now likely be issued in May, according to GAO.

Published accounts quoted a GAO spokesperson citing staff diverted to other projects as the reason for the delay. House Education and Labor Committee Chairman George Miller (D-CA), requested GAO do a series of reports on 401(k) fees and practices and has been the most active legislator calling for fee disclosure legislation. The upcoming report will be called "Plan Sponsor Practices and their Oversight by the Department of Labor," according to GAO officials.