GAO report says American retirement system not providing adequate security

Agency recommends Congress establish a retirement security commission

Oct 18, 2017 @ 2:55 pm

By Hazel Bradford

The three pillars of the American retirement system — Social Security, workplace retirement plans and individual savings — will not provide adequate retirement security for a growing number of people, according to a report issued Wednesday by the U.S. Government Accountability Office.

Part of the risk, the report said, comes from federal programs like Social Security, which is projected to be unable to pay full benefits by 2035, and "substantial liabilities" of the Pension Benefit Guaranty Corp.' multiemployer program.

In addition, "the federal government is on an unsustainable fiscal path, largely due to spending increases driven largely by health-care programs, demographic changes and net interest on government debt," said Gene Dodaro, head of the GAO head and comptroller general of the United States.

Other factors are a "marked shift" to defined contribution plans instead of defined benefit plans offered to employees, who have increased risk and responsibility for their retirement security. Increased debt and health-care costs further compound that risk, the report found.

Mr. Dodaro noted that the last comprehensive federal evaluation of retirement security was 40 years ago, from the 1979 Commission on Pension Policy. The GAO report recommends that Congress establish an independent commission to recommend policy goals and ways to improve the system.

The report, "The Nation's Retirement System: A Comprehensive Re-evaluation Is Needed to Better Promote Future Retirement Security," was sent to Congress and will be on the GAO website.

Hazel Bradford is a reporter for InvestmentNews' sister publication Pensions & Investments.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

INTV

Children of AI, and when they are coming to financial advice

Technology reporter Ryan Neal talks about the tremendous progress in artificial intelligence in other industries, and how its applications are slowly making headway in the advice sector.

Latest news & opinion

SEC advice rule: Here's what you need to know

We sifted through the nearly 1,000-page proposal and picked out some of the most important points.

Cadaret Grant acquired by private-equity-backed Atria

75-year-old owner Arthur Grant positions the IBD for the 'next 33 years.'

SEC advice rule seeks to tighten reins on brokers

The proposed rule puts new restrictions on brokers, but it is still unclear how strongly the SEC is clamping down.

SEC advice rule hearing updates

Commission says a lot of work ahead, public will have 90 days to comment.

SEC advice proposal unveiling: Here's what to expect

Chairman Jay Clayton will initiate momentous action Wednesday, as the commission meets to debate a rule on broker and adviser standards.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print