oversight

Retirement Income Data: Improvements Could Better Support Analysis of Future Retirees' Prospects

Published by the Government Accountability Office on 2003-03-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             United States General Accounting Office


GAO          Report to the Ranking Minority
             Member, Subcommittee on Employer-
             Employee Relations, Committee on
             Education and the Workforce, House of
             Representatives
March 2003
             RETIREMENT
             INCOME DATA

             Improvements Could
             Better Support
             Analysis of Future
             Retirees’ Prospects




GAO-03-337
                                               March 2003


                                               RETIREMENT INCOME DATA

                                               Improvements Could Better Support
Highlights of GAO-03-337, a report to          Analysis of Future Retirees' Prospects
Ranking Minority Member, Subcommittee
on Employer-Employee Relations,
Committee on Education and the
Workforce, House of Representatives




Future demographic trends include              Experts consulted by GAO cited priorities for improving retirement data that
a doubling of the nation’s retiree             fit into two broad categories: (1) obtaining better data from employers on
population and only modest labor               employee benefits and (2) obtaining better data by linking more individual
force growth, leading to concerns              and household surveys with administrative data (such as employer records,
about retirement income adequacy               and Social Security earnings history records). Information from employers,
for future generations. Credible
projections of the effects of policy
                                               such as documents describing the features of their pension plans, would
proposals on federal spending and              enable analysts to forecast future retirement income of pension holders,
future retirees’ income are                    based on the specific features of their pension plans and the likely
necessary. Because adequate data               distribution of pension income and wealth for different segments of the
is critical to the analysis of                 population. Linking individual and household surveys with administrative
retirement income and wealth,                  data creates new information, such as the demographic characteristics of
GAO was asked to identify data                 employees whose pensions are affected by the formulas that employers use
improvements that experts say are              to calculate contributions or pension payments.
a priority for the study of
retirement income and wealth, as               Analysts attribute the shortcomings in retirement income data primarily to
well as factors limiting efforts to            fragmentation of the responsibility for data collection and analysis, the
obtain the needed information.
                                               burden of data collection on respondents, and confidentiality considerations
                                               that restrict access to these data. Fragmentation of responsibility occurs, in
                                               their view, because no single agency has a statutory mandate to collect or to
The Congress should consider                   analyze all the data needed to support a more comprehensive study of
directing Labor to obtain from plan            retirement income and wealth. With regard to respondent burden, some
administrators electronic filings of           information on pension plans is no longer collected, in part, out of concern
SPDs and summaries of material                 that it was an unnecessary burden on the firms having to submit it. Finally,
modifications and make them                    certain kinds of data needed to make projections are not widely available to
publicly available.                            all analysts because of the confidentiality laws that authorize their
In addition, GAO recommends that               collection.
the Secretary of Labor
• direct the Bureau of Labor
    Statistics to prepare a plan to
    improve data for analyzing
    retirement income and wealth
    in coordination with other
    agencies and
• obtain copies of summary plan
    descriptions in cases where
    analysts working on federally-
    conducted or sponsored
    research seek them for
    statistical purposes.
GAO recommends that the Internal
Revenue Service publish
tabulations of information filed in
IRS forms 5498, 1099R and W-2.
www.gao.gov/cgi-bin/getrpt?GAO-03-337

To view the full report, including the scope
and methodology, click on the link above.
For more information, contact Barbara
Bovbjerg (202) 512-7215 or Robert Parker
(202) 512-9750.
Contents



Letter                                                                                    1
               Results in Brief                                                           2
               Background                                                                 4
               Experts Cited Need for Better Data and Better Data Set Linkage             7
               Many Factors Limit Needed Retirement Income and Wealth Data               15
               Conclusions                                                               21
               Matter for Congressional Consideration                                    23
               Recommendations                                                           23
               Agency Comments                                                           23

Appendix I     Scope and Methodology                                                     27



Appendix II    Status of Recommendations from the 1997 Report
               of the Panel on Retirement Income Modeling                                29



Appendix III   GAO Survey on Retirement Income Data Needs and
               List of Respondents                                                       40
               List of Respondents to the Survey                                         51

Appendix IV    Views of GAO’s Expert Panel on Retirement Income Data
               Needs                                                                     65
               Need for Better Matched Data                                              66
               More Employer Information Needed on the Value and Provisions of
                 Employer Provided Pensions                                              69

Appendix V     Characteristics of Selected Surveys for Analysis of
               Retirement Income and Wealth                                              72



Appendix VI    Comments from the Department of Commerce                                  76



Appendix VII   Comments from the Department of Labor                                     77




               Page i                                   GAO-03-337   Retirement Income Data
Appendix VIII   GAO Contacts and Staff Acknowledgments                                                       81


                GAO Contacts                                                                                 81
                Staff Acknowledgments                                                                        81



Tables
                Table 1: Examples of Federal Agency Retirement Income-Related Data
                          Collection                                                                         16
                Table 2: Federal Outlays for Selected Longitudinal Studies—Fiscal Years
                          1997-2001                                                                          29
                Table 3: Summary Table of Selected Survey Data Sources                                       72




                Abbreviations

                BLS                Bureau of Labor Statistics
                CPS                Current Population Survey
                EBRI               Employee Benefit Research Institute
                EBSA               Employee Benefits Security Administration
                ERISA              Employee Retirement Income Security Act of 1974
                HRS                Health and Retirement Study
                IRA                Individual Retirement Account
                IRS                Internal Revenue Service
                OMB                Office of Management and Budget
                PBGC               Pension Benefit Guaranty Corporation
                PSID               Panel Study of Income Dynamics
                SCF                Survey of Consumer Finances
                SIPP               Survey of Income and Program Participation
                SPD                summary plan description
                SOI                Statistics of Income

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                Page ii                                           GAO-03-337   Retirement Income Data
United States General Accounting Office
Washington, DC 20548




                                          March 21, 2003

                                          The Honorable Robert E. Andrews
                                          Ranking Minority Member
                                          Subcommittee on Employer-Employee Relations
                                          Committee on Education and the Workforce
                                          House of Representatives

                                          Dear Mr. Andrews:

                                          The nation’s retiree population will double within the next few decades,
                                          while at the same time the labor force will grow only modestly, potentially
                                          stressing the national economy. In light of these demographic trends,
                                          policymakers have been moved to consider how the future economy can
                                          support the large retiree population, and whether retirement income levels
                                          will be adequate in the future.1 To increase their understanding about
                                          issues related to retirement, policymakers need credible projections of the
                                          effects of their proposals on federal spending and on future retirees’
                                          income. Analysts will be better able to develop accurate projections if they
                                          have relevant, reliable, and timely data on patterns of saving and actual
                                          retirement income and wealth.

                                          Because adequate data will be so important to analysis of retirement
                                          income and wealth for future retirees, including people in the “baby boom”
                                          generation and later generations, you asked us to assess the adequacy of
                                          data available for making such projections. In response to your request, as
                                          agreed, we identified (1) data improvements that experts say are a priority
                                          for the study of retirement income and wealth and (2) factors limiting
                                          efforts to obtain the needed information.

                                          To address these topics, we conducted a Web based survey of nearly 200
                                          individuals with retirement income expertise, held a daylong meeting with
                                          a diverse group of 11 retirement income experts, and interviewed
                                          retirement income analysts and officials of the Departments of Labor
                                          (Labor), Commerce, and Treasury. We conducted our work between



                                          1
                                            For a discussion of standards for evaluating retirement income adequacy, see U.S. General
                                          Accounting Office, Social Security: Program’s Role in Helping Ensure Income Adequacy,
                                          GAO-02-62 (Washington, D.C.: Nov. 30, 2001).



                                          Page 1                                            GAO-03-337   Retirement Income Data
                   February and December 2002 in accordance with generally accepted
                   government auditing standards. (For more details about our scope and
                   methodology, see app. I.)



Results in Brief   Acknowledging that there is a great deal of missing data related to
                   retirement income, experts we consulted cited priorities for data
                   improvements that fit into two broad categories: (1) obtaining better data
                   from employers on employee benefits and (2) obtaining better data by
                   linking more individual and household surveys with administrative data
                   (such as employer records and Social Security earnings history records).
                   The kinds of information from employers that analysts indicated are
                   missing included the documents employers provide to employees
                   describing the features of their pension plans, such as the plan’s normal
                   retirement age and reductions for early retirement. This information
                   would help analysts to forecast future retirement income of pension
                   holders, based on the specific features of their pension plans and the likely
                   distribution of pension income and wealth for different segments of the
                   population. With regard to linking datasets, currently linkages between
                   individual and household survey data and administrative data are limited.
                   Linking data creates new information by matching survey data about
                   individuals (using names, or taxpayer identification numbers) to a second
                   set of records, such as administrative records on pension plans. There is
                   inadequate information, for example, about which demographic groups
                   have different types of pensions. Thus, while analysts may know the
                   prevalence of certain formulas used to calculate employer contributions or
                   pension payments, they generally lack reliable information about the
                   demographic characteristics of the employees whose pensions are
                   affected by these formulas.

                   Analysts attribute the shortcomings in retirement income data primarily to
                   fragmentation of the responsibility for data collection and analysis, the
                   burden of data collection on respondents, and confidentiality
                   considerations that restrict access to these data. Fragmentation of
                   responsibility occurs, in their view, because no single agency has a
                   statutory mandate to collect or to analyze all the data needed to support a
                   more comprehensive study of retirement income and wealth. For example,
                   while the Department of Labor’s Bureau of Labor Statistics (BLS) collects
                   data on pensions, and the Census Bureau collects data on individuals’ and
                   households’ income, neither agency is responsible for all of the data
                   needed to project future retirement income and wealth. Other agencies
                   such as the Department of Labor’s Employee Benefits Security
                   Administration (EBSA)—formerly called the Pension Welfare and Benefits


                   Page 2                                  GAO-03-337   Retirement Income Data
Administration—and the Social Security Administration also collect data,
but the extent to which these agencies share data is limited. With regard to
respondent burden, some information on pension plans is no longer
collected out of concern that it was an unnecessary burden on the firms
having to submit it, as well as concern about the Department of Labor’s
costs for storing the information. For example, the 1997 Taxpayer Relief
Act (P.L. 105-34) ended the requirement that employers file with the
Department of Labor copies of documents summarizing the features of the
pension plans they offer. Finally, certain kinds of data needed to make
projections are not widely available to all analysts because of the
confidentiality laws that authorize their collection. The Census Bureau and
others are exploring options for expanding access without compromising
the confidentiality of the data. For example, the Census Bureau has
established additional research data centers throughout the country where
approved researchers with approved projects can work with confidential
data and produce statistical summaries that meet strict disclosure
requirements.

We are offering a Matter for Congressional Consideration and making
recommendations to the Department of Labor and the Department of the
Treasury that seek cost-effective approaches to help fill some of the data
needs while taking into account respondent concerns about increased
reporting burdens and agency concerns about maintaining confidentiality.

We provided a draft of this report to the Departments of Commerce,
Labor, the Treasury and the Internal Revenue Service (IRS). We received
technical comments from all four and incorporated their suggestions as
appropriate. We also provided a draft of this report to the 11 members of
our expert panel and modified the draft as appropriate in response to their
comments. Commerce had no major comments on the report (see app. VI).
Labor agreed on the need for access to accurate data but did not agree
with our recommendations to the Secretary of Labor (see app. VII). Labor
indicated that it did not have authority to require that summary plan
descriptions (SPD) be filed electronically. Accordingly, we changed one
of our draft recommendations to the Secretary of Labor into a Matter for
Congressional Consideration. Labor also had concerns about the burdens
our recommendations might pose. Although we acknowledge their
concerns, nonetheless, we conclude that the need for improvements in
retirement income data outweighs the likely costs involved. We therefore
continue to address two recommendations to the Secretary of Labor and
one to the IRS.




Page 3                                 GAO-03-337   Retirement Income Data
Background   Forecasting future retirement income needs—and how well they will be
             met through current savings, pension plans, and Social Security benefits—
             is a challenge, in part because of the many variables involved. Although
             Social Security is the primary source of income for many retirees, private
             pensions and other sources of income serve as key supplements and help
             retirees receive adequate income in retirement. In order to measure a
             person’s current income and wealth, information is needed about many
             items, including the person’s wage and nonwage income, home equity,
             pension, and nonfinancial assets and liabilities. In addition, to project a
             person’s future income and wealth, researchers need information such as
             a person’s earnings history, whether he or she chooses to participate in the
             pension plan offered by an employer, and how the person might respond
             to changing incentives for saving and investing for retirement. Other
             factors include whether the person chooses to accumulate savings apart
             from retirement plans, how long the person remains in one job, whether
             the person decides to cash out his or her retirement plan when changing
             employment, level of indebtedness, and the availability of health insurance
             during retirement. In addition, individuals’ retirement funds depend on
             employer decisions, such as what kinds of pension plans and the
             availability and cost of retiree medical and long-term care insurance. To
             make estimates for people in different demographic groups, not just
             aggregate estimates for entire generations, analysts need to know how
             these factors vary based on individuals’ demographic characteristics.
             Estimates of future income adequacy also rely heavily on projections of
             macroeconomic factors, including estimates of future rates of inflation,
             and rates of return on stocks and bonds and changes in home values.
             Furthermore, retirement income data needs keep changing, in part, as a
             result of trends in the pension industry and the labor force. The pension
             industry provides a growing variety of pension products with different
             features and legal structures. Forecasting pension income becomes more
             complicated with, for example, firms’ converting of traditional pension
             plans into new pension hybrid products such as cash balance plans. These
             plans combine features of both defined benefit2 and defined contribution3



             2
               A defined benefit plan is a type of plan where the sponsor provides a guaranteed benefit
             generally expressed as monthly benefit based on a formula that generally combines salary and
             years of service to the company.
             3
              A defined contribution plan is a type of pension that establishes individual accounts for
             employees to which the employer, participants, or both make periodic contributions. The
             benefits are based on employer and participant contributions to and investment returns (gains
             and losses) on the individual accounts.




             Page 4                                            GAO-03-337   Retirement Income Data
plans, which adds to their complexity.4 Changes in employment patterns,
such as the decrease in the length of time employees spend in a single job,
will also have an effect on pension income.

The federal government collects a great deal of data pertinent to the
analysis of retirement income and wealth. Surveys of individuals and
households collected by or sponsored by the Census Bureau, the Federal
Reserve Board, BLS, and the National Institute on Aging are important
sources of information. Similarly, surveys of businesses by BLS provide
information about the pension and health care benefits firms offer their
employees. A great deal more information pertinent to the analysis of
retirement income and wealth is contained in the administrative
documents that businesses and individuals must provide to state and
federal agencies that administer governmental programs and enforce
regulations. For example, many private employers must file, on a Form
5500, annual reports concerning their employee benefit plans for the IRS,
Labor’s EBSA, and the Pension Benefit Guaranty Corporation (PBGC).5
Many pieces of information concerning pensions and retirement savings
are also provided on forms that employers and financial institutions file
with the IRS.

In addition to the federal government’s collection of retirement income
related data, several private entities also conduct surveys that provide
useful information concerning retirement income. For example, the Health
and Retirement Study (HRS) conducted by the University of Michigan’s
Institute for Social Research, is a longitudinal survey of adults over the age
of 50. The information collected includes such topics as respondents’
physical and mental health, insurance coverage, financial status, family
support systems, labor market status, and retirement planning. The HRS is
supported primarily by the National Institute on Aging, with additional
funding over the years from the Social Security Administration, Labor’s
EBSA, the Department of Health and Human Services Assistant Secretary
for Planning and Evaluation, and the state of Florida. Also, private benefit
consulting firms and organizations, such as the Employee Benefit


4
  U.S. General Accounting Office, Cash Balance Plans: Implications for Retirement Income,
GAO/HEHS-00-207 (Washington, D.C.: Sept. 29, 2000) and Private Pensions: Implications of
Conversions to Cash Balance Plans, GAO/HEHS-00-185 (Washington, D.C.: Sept. 29, 2000).
5
 The IRS administers and enforces tax code provisions concerning private pension plans. EBSA
enforces Employee Retirement Income Security Act (ERISA) pension requirements, and the
PBGC insures the benefits of participants in defined benefit pension plans that are eligible for
preferential tax treatment.




Page 5                                             GAO-03-337   Retirement Income Data
Research Institute (EBRI), conduct surveys of employers concerning
pension plans.

Retirement income analysts currently use available retirement income and
wealth data to project future retirement income needs. For example, the
Social Security Administration has developed a forecasting model,
Modeling Income in the Near Term (MINT), to project demographic
changes, retirement income, and Social Security benefits generally for
persons born between 1931 and 1960. The Congressional Budget Office
has also developed the Congressional Budget Office Long-Term model to
study the range of possible outcomes for the balance of the Social Security
trust fund.6

In a 1997 report, the National Research Council’s Panel on Retirement
Income Modeling reviewed the available sources of data on retirement
income and recommended several improvements.7 While the individual
recommendations covered various topics, many involved the collection of
additional information, as well as the establishment of an interagency task
force for coordination purposes. While some of the panel’s
recommendations have been adopted, others have not. For example, as
the panel recommended, the federal government has continued to support
longitudinal studies. However, Labor has not acted on the panel’s
recommendation that it establish an interagency task force on employer
data to plan collection of retirement income related data. In some
respects, less data are available than was the case when the report was
prepared. (See app. II for details.)




6
 For additional information on the Congressional Budget Office’s model, see Congress of the
United States, Congressional Budget Office, Uncertainty in Social Security’s Long-Term
Finances: A Stochastic Analysis (Washington, D.C.: Dec. 2001). The Social Security
Administration and others such as EBRI have supported the development of other simulation
models, such as the Social Security Policy Simulation Model (SSASIM) to study the effect of
changes in the Social Security program and pension law. More recently the Social Security
Administration and others have supported the development of the GEMINI model, a policy
microsimulation model developed by the Policy Simulation Group. EBRI has developed its own
model, the EBRI Retirement Income Projection Model.
7
  Constance F. Citro and Eric A. Hanushek, eds., Assessing Policies for Retirement Income:
Needs for Data, Research and Models (Washington, D.C.: National Academy Press, 1997). The
panel was sponsored by Labor’s EBSA, the National Institute on Aging, PBGC, the Social
Security Administration, and the Teachers Insurance and Annuity Association-College
Retirement Equities Fund (TIAA-CREF) Institute.




Page 6                                          GAO-03-337   Retirement Income Data
                            Much of the data needed to assess retirement income and wealth are
                            subject to federal laws protecting the confidentiality of information
                            reported to the federal government. Laws limit the access to this
                            information. Without access, it is not possible to pull together data from
                            different sources to provide more complete information about individuals
                            or organizations. The success of data gathering efforts by federal agencies
                            and others relies on widespread trust that personal data will be kept
                            confidential, protected from disclosure, and used only for specified
                            purposes.8



Experts Cited Need for      Experts we consulted cited priorities for improving retirement data that fit
                            into two broad categories: (1) obtaining better data from employers on
Better Data and Better      employee benefits and (2) obtaining better data from individual and
Data Set Linkage            household surveys by linking them with administrative data. The kinds of
                            information concerning employers and employer-sponsored benefit plans
                            that analysts sought included the features of their pension plans, such as
                            minimum and maximum allowable contributions, or formulas for
                            calculating benefits from defined benefit pension plans. Retirement
                            income experts believed these data would allow them to more accurately
                            measure or project retirement income and wealth now and in the future
                            and estimate effects of potential retirement policy changes. Linkage of
                            data from different sources creates new information by providing data
                            about individuals matched to other data about the individuals from a
                            second set of records, such as administrative records on pension plans.
                            Analysts are able to use general data on some employer-sponsored
                            pension plans and data on households and individuals. However, without
                            linkages between these types of data it is difficult to obtain information
                            about retirement offerings for specific households. As a result, analysis of
                            pension offerings by demographic groups is limited.


Experts Place Priority on   Most of the experts responding to our survey on retirement income data
Improvement in Data from    needs assigned better retirement income-related data from employers to
Employers                   the high or highest priority category. (See app. III for results of the
                            survey.) In addition, the experts asserted that employers, rather than
                            employees, could provide more accurate information about pension plans.



                            8
                             Among other things, the E-Government Act of 2002 (P.L. 103-347) permits the sharing of
                            information concerning businesses among designated statistical agencies and provides for
                            additional safeguards to protect the confidentiality of statistical data collected by all agencies.




                            Page 7                                               GAO-03-337    Retirement Income Data
                            Participants on our expert panel expressed interest in improving access to
                            the mandatory pension plan disclosure reports, such as summary plan
                            descriptions (SPD). (See app. IV for a summary of the expert panel’s
                            discussion.) Employers must provide these documents to employees who
                            participate in a plan (such as a pension plan) in order to provide them with
                            an understandably written description of their rights and benefits under
                            the plan. To improve projections of future retirement income and the
                            effects of policy options, panelists also expressed interest in data provided
                            to the IRS on forms such as 1099-R and 5498.9


Employer Documents Are an   Analysts responding to our survey, reported as their highest or high
Important Source of         priority, the kind of information reported on some employer-submitted
Information on Retirement   forms. Because pension plans vary widely, panel experts said they
                            especially needed details of employee pension plans, such as the type of
Plans                       pension plan (defined benefit, defined contribution, or other), eligibility
                            for participation and benefits, the plan’s early retirement age, sources of
                            contributions to the plan, and the method by which the amount of the
                            contributions and benefits are calculated. Panelists believed this
                            information would help analysts project future private pension benefits
                            and the effects of proposed policy changes. Panel members also
                            recommended that such pension data be obtained directly from
                            employers, citing the need for accuracy as an important factor.

                            Inconsistencies have been found between employee and employer
                            provided data. One study, for example, compared employees’ reports
                            concerning the employer-sponsored pension plans they were participating
                            in, or that were available to them, with the information about those
                            pension plans obtained directly from the employers.10 It found significant
                            discrepancies between the two sets of data, large enough for the authors
                            to urge a great deal of caution in using the household survey data for
                            reliable information about the actual characteristics of employer-
                            sponsored pension plans. For example, among employees whose


                            9
                             The IRS form titled “Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans,
                            IRAs, Insurance Contracts, etc.” is identified as IRS Form 1099-R. The IRS form titled “IRA and
                            Coverdell ESA Contribution Information” is identified as IRS Form 5498.
                            10
                             Alan L. Gustman and Thomas L. Steinmeier, What People Don’t Know About Their Pensions
                            and Social Security: An Analysis Using Linked Data from the Health and Retirement Study
                            (Cambridge, Mass.: National Bureau of Economic Research, 1999). This paper discusses in detail
                            some of the problems associated with having respondents provide details of their own pensions,
                            as opposed to employers directly providing information.




                            Page 8                                             GAO-03-337   Retirement Income Data
employers reported that they were covered by a defined benefit plan, only
56 percent of the employees thought that they had such a plan. Likewise,
there seemed to be high levels of error in other basic details about pension
plans, such as the eligibility date for early retirement.

Using employer-submitted forms as a source of information was suggested
as one way to increase the accuracy of pension data. Retirement income
experts agreed that the Form 5500 is an important source of pension
information available in government administrative records.11 Sponsors or
administrators of employee benefit plans subject to ERISA12 must file this
form annually. The Form 5500 was intended, in part, to measure
employers’ compliance with both the fiduciary and funding provisions laid
out in ERISA legislation. The Form 5500 filed for pension plans contains
useful aggregate information about plans. It provides information about
the financial condition of the plan, annual amounts contributed by
participants, and the plan’s income on investments. The form also provides
information on plan characteristics, such as plan type (defined benefit or
defined contribution), method of funding, and numbers of employees,
participants, and employees who are excluded from the plan for various
reasons.

While the Form 5500 provides aggregate data about plans, it does not
contain information useful for calculating individual’s contributions or
benefits. For example, it does not provide information on formulas for
calculating employer contributions to plans or for calculating retirees’
benefits.13 In addition, it does not provide any data for pension plans
outside the reporting requirements of ERISA, such as those for
governmental employers, certain nonqualified plans for highly




11
 Form 5500 is a disclosure form that private employers with qualified pension plans are required
to file with the IRS, Labor’s EBSA, and the PBGC. Schedule SSA to the Form 5500, which is not
publicly disclosable, identifies individuals who leave employment with deferred vested benefits.
The Social Security Administration uses this information.
12
 The ERISA of 1974 is a federal law that set minimum standards for pension plans sponsored by
private employers. These standards govern the management, operation, and funding of the plan.
Labor’s EBSA enforces these ERISA provisions.
13
 U.S. Department of Labor. Pension and Welfare Benefits Administration, Private Pension Plan
Bulletin: Abstract of 1998 Form 5500 Annual Reports, No. 11, Winter 2001-02.




Page 9                                            GAO-03-337   Retirement Income Data
compensated people,14 simplified employee pension (SEP) 15 plans, or
savings incentive match plans for employees (SIMPLE).16 Reporting and
processing requirements also mean that data from Form 5500 reports may
not be available to researchers for up to 3 years after the plan year. Finally,
Labor officials find frequent errors in information submitted on the
forms.17

Partly because of the limitations surrounding the Form 5500s, retirement
income experts are increasingly interested in access to the SPDs, which
are summaries of employers’ pension offerings. The requirements of
ERISA call for SPDs to include specific details about employee pension
plans, including the type of pension plan, eligibility requirements, normal
retirement age, vesting18 and disqualification rules, sources of
contributions to the plan, and method by which the amount of the
contribution is calculated. ERISA required employers to file SPDs and
documents, called “summaries of material modifications,” describing
changes to the plans with Labor. These were made publicly available at
Labor’s public disclosure room in Washington, D.C. The SPDs served many
purposes: (1) they were a source of information to employees about the
offerings included in their own pension plans, (2) they were a means of
informing Labor about what types of plans a company was offering so
Labor could perform monitoring and enforcement, (3) they also provided
researchers with a high level of detail on pension offerings. EBSA officials
noted, however, that the SPDs received by Labor were often out of date
and that it was costly to store them. In 1993 we agreed that Labor should


14
 A qualified pension plan is an employer pension plan that receives preferential tax treatment in
exchange for satisfying certain requirements established in the Internal Revenue Code of 1986.
Employers or employees receive tax benefits for contributions they make to qualified plans
within certain limits. A nonqualified pension plan is an employer-sponsored pension plan that
does not meet these requirements.
15
 A SEP (402(h) plan is a deferred compensation type retirement plan that allows employers and
employees to make deductible contributions toward an employee’s retirement fund. There are
specific rules about contribution and deduction limits, which make the plan easier for a smaller
employer to administer, but less attractive for a larger employer.
16
 A SIMPLE plan (401(k)(11)) is a deferred compensation type retirement plan that certain small
employers (including self-employed individuals) can set up for the benefit of their employees.
17
 U.S. General Accounting Office, Pension and Welfare Benefits Administration: Opportunities
Exist for Improving Management of the Enforcement Program, GAO-02-232 (Washington, D.C.:
Mar. 3, 2002).
18
 Vesting refers to when a plan participant has earned a right to a benefit that cannot be taken
away (i.e., a nonforfeitable right to the participant’s accrued benefit).




Page 10                                            GAO-03-337   Retirement Income Data
                              stop collecting paper copies of SPDs, and instead provide access to
                              electronic versions.19

                              Labor no longer collects SPDs and public access to them has become
                              much more limited in the last 5 years. The Taxpayer Relief Act of 1997
                              (P.L. 105-34) amended ERISA so that employers no longer need to file
                              SPDs with Labor. Instead, Labor was authorized to request SPDs from
                              employers as needed, and uses this authority primarily to assist plan
                              participants and beneficiaries in obtaining copies, though it has authority
                              to request them for other purposes. However, since the law, Labor no
                              longer requires that SPDs be filed, and SPDs prepared after the Taxpayer
                              Relief Act are not publicly accessible, either for the general public or for
                              researchers looking to model pension behavior.


Tax Information Returns Are   Our expert panelists noted that some of the pension details they need can
a Source of Information on    be found in the administrative data provided by employers and others to
Retirement Plans              the IRS. In addition to its collection of income tax returns, the IRS also
                              collects “information” returns, such as the W-2, which contain details of
                              employee information that provides valuable details relevant to future
                              retirement income, such as wages, tax-deferred retirement contributions,
                              lump sum distributions, rollovers, and retirement asset balances. In
                              discussing pension data that the IRS has access to from its tax forms,
                              experts from our panel reported that information from the Forms W-2,
                              5498, or 1099-R could provide important pension details. These forms
                              provide detail on the extent of investments in retirement plans, such as the
                              amount of contributions made to an Individual Retirement Account (IRA)
                              or the amount of money contributed by the employee to deferred
                              compensation plans.20

                              Form W-2 is a valuable source of pension data because it provides
                              information on whether the employer provides some form of qualified
                              retirement plan. The W-2 also includes amounts deducted from wages for
                              contributions to pension plans, as well as codes that provide more detail
                              on the different kinds of plans to which the contribution was made, such
                              as whether the plan is a SIMPLE, SEP, or some other kind of deferred


                              19
                                U.S. General Accounting Office, Management Reform: GAO’s Comments on the National
                              Performance Review’s Recommendations, GAO/OCG-94-1 (Washington, D.C.: Dec. 3, 1993).
                              20
                               IRAs authorized by ERISA allow workers to make tax-deductible and nondeductible
                              contributions to an individual account for retirement savings.




                              Page 11                                        GAO-03-337   Retirement Income Data
compensation plan. Besides giving more detailed information on deferred
compensation, the W-2 has another advantage in terms of the pension
information it provides: employers are required to submit one for every
employee. This requirement covers all workers for whom federal income
tax or Social Security tax is withheld, including those who do not earn
enough to be required to file individual income tax returns and those who
are not covered by any pension plan.

Form 5498 is a form that financial institutions are required to file for all
participants to report all contributions and the fair market value of their
IRA accounts. It includes valuable pension information, including IRA
contributions; rollover contributions;21 and SEP, SIMPLE, and Roth IRA
contributions.22 Experts from the panel stated that the pension information
from Form 5498 could be important in tracking an individual’s retirement
income balance with a specific custodial financial institution because it
provides information on the fair market value of those assets held by the
individual. While it does not give information on whether an employee
who has separated from an employer converts the IRA into another tax
protected IRA or pension account, this information should be reflected in
the employee’s federal income tax return.

Form 1099-R is another source of information for pension experts, which
could provide additional information on pension resources. Form 1099-R
is a statement filed by trustees concerning distributions to individuals
from pensions, annuities, retirement or Profit-Sharing Plans, and IRAs.
However, in many cases the form does not indicate whether the
distributions are lump-sum distributions or rollovers into IRAs or other
qualified plans.

The IRS makes some tax information publicly available through its
Statistics of Income (SOI) program, which provides numerous tabulations
and articles from its analysis of tax return data. From a sample of Form
1040s, the SOI currently provides aggregate tabulations of information,
including taxable IRA distributions, deductible payments to an IRA,
payments to a self-employed retirement (Keogh) plan, and taxable



21
 A rollover contribution is a direct transfer of pension benefits received as a lump-sum payment
to another tax-qualified retirement plan or an IRA free of taxes. In many cases, however, the IRS
forms do not indicate whether or not distributions were rolled over.
22
 A Roth IRA is a type of individual retirement plan that is similar to a traditional IRA except that
contributions are not tax deductible, and that qualified distributions are tax free.




Page 12                                             GAO-03-337    Retirement Income Data
                              pensions and annuities.23 This information is provided as a sum total of
                              amounts accrued for the entire U.S. population that filed income tax
                              returns, and is also broken out in detail by income level. For example, for
                              the year 2000, the SOI provides taxable IRA distributions for about 9
                              million returns, with distributions totaling about $100 billion. While SOI
                              breaks down these totals by income brackets, the tables do not provide
                              other useful pension information such as pension accrual amounts by race
                              or ethnicity. These demographic characteristics could be added to the data
                              if individual tax return records were linked to the Census Bureau’s
                              detailed household survey records.

                              The SOI staff are preparing an article on retirement related data available
                              from the IRS and, in doing so, will make some retirement related aggregate
                              data, including information from Forms 5498 and W-2, publicly available
                              for the first time. They told us that they are considering making this
                              information available as a part of regular SOI releases, but they currently
                              have no formal plans to do so. The SOI tabulations being prepared include
                              the fair market value of pension plans, broken down by 10-year cohorts.
                              Our expert panelists said that these kinds of aggregate data from IRS
                              forms could help them ensure that their analyses reflect accurate
                              information about retirement assets, such as the fair market value of IRA
                              accounts.


Experts Place Priority on     Given different possible options for improving retirement income data,
Linking Data on Individuals   retirement experts showed the greatest interest in increasing the
to Administrative Data        availability of, and expanding researchers’ access to, data sets on
                              individuals or households linked to administrative data sets. (For
                              characteristics of selected survey data sources, see table 3.) Eighty-one
                              percent of respondents assigned this as a high or highest priority. Data
                              linkage creates new information by matching data about individuals (using
                              names or taxpayer identification numbers) to a second set of records, such
                              as administrative records on pension plans, which provide additional
                              information. The linked data are then preserved as a new data set, with
                              personal identification information removed, that can generate new, fuller
                              information on the population. Linking existing sources of data can
                              provide detailed information with no additional respondent burden and at
                              a much lower cost than is associated with collecting new survey data.



                              23
                               Keogh plans are retirement plans for self-employed workers, authorized by the Self-Employed
                              Individuals Retirement Plan Act of 1962 (P.L. 87-792).




                              Page 13                                          GAO-03-337   Retirement Income Data
Our expert panelists made several suggestions for linking individual and
household survey data with administrative data sources to help improve
the analysis of retirement income and projections of the effects of policy
changes on future retirement income. For example, they suggested
expanding linkage between the Survey of Income and Program
Participation (SIPP) and administrative data sources.24 SIPP is a survey of
households conducted by the Census Bureau providing wide-ranging
demographic information, including different age cohorts, which makes it
an attractive source of information when linked to administrative records.
It provides, for example, information about benefits households receive
from government programs. One component of this survey deals with
retirement and pension plan coverage, in which several pension and
retirement related questions are asked. However, it lacks definitive
information on features of respondents’ pension plans. Linking SIPP
information to administrative data sets is a powerful way to expand
information about how different groups will be covered in retirement. For
example, linked data sets can indicate the extent to which the availability
of various pension features differ for people in different age and
demographic groups. Such linkage can also indicate how much knowledge
respondents have about their pension plans and their retirement savings
options. Panelists said that linkage to SPDs, Form 5500 data, and Social
Security earnings and benefit histories would be especially valuable for
projecting retirement income for different demographic groups.

Survey data on individuals have already been linked to administrative data
sources in order to improve retirement income data. The Census Bureau is
already linking SIPP records with administrative data related to retirement
income, including Social Security earnings and benefit records. However,
many potential linkages are hampered by lack of access to needed
administrative data. For example, the University of Michigan Institute for
Social Research has linked information gathered from HRS survey
participants to SPDs gathered either from the employers or by Labor prior
to 1997. Unfortunately, this process was made more difficult, and the
information less satisfactory, because the HRS researchers could only
obtain about 50 percent of the SPDs they were seeking, in part, because
employers chose not to provide the SPDs. HRS researchers have also
experimented with linking respondent surveys to Social Security earning



24
 The SIPP data have, for example, been linked with Social Security earnings records except in
cases where respondents were unwilling to provide their Social Security numbers to the Census
Bureau.




Page 14                                          GAO-03-337   Retirement Income Data
                               histories for two-thirds of the respondents who permitted SSA to provide
                               the records.



Many Factors Limit             Experts we consulted believed that data needed for the study of
                               retirement income are not collected or made available because of factors
Needed Retirement              that include the fragmentation of data collection responsibility, the burden
Income and Wealth Data         of data collection on respondents, and confidentiality considerations that
                               restrict access. Fragmentation stems from no single agency having a
                               statutory mandate to collect and analyze all the data needed to support a
                               more comprehensive study of retirement income and wealth. Some
                               information is no longer collected out of concern that it was an
                               unnecessary burden on the firms having to submit it and because it was
                               only being used to a limited extent by the government. Finally, certain
                               kinds of data needed to make retirement income projections are not made
                               available because they contain information that must by law be carefully
                               protected against unauthorized disclosure and misuse.


Fragmented Retirement Data     Although many federal agencies are involved in collecting and analyzing
Responsibilities Contributes   retirement income and wealth data for a variety of different purposes, no
to Data Shortcomings           single agency is responsible for these activities. Instead, some agencies—
                               including the Bureau of the Census, Labor, Federal Reserve Board, IRS,
                               and SSA—collect data needed for their specific purposes. For example,
                               the Census Bureau collects retirement income and wealth information on
                               individuals and households using the Current Population Survey (CPS)
                               and SIPP. Labor collects data on pensions for both ERISA enforcement
                               purposes and to track pensions for statistical purposes. The IRS collects
                               data from individuals and firms for tax enforcement purposes. Table 1
                               shows the major agencies involved in retirement income and wealth data
                               collection, the purpose of their data collection, and a brief description of
                               the information collected. None of these agencies is charged with
                               coordinating all retirement income data collection efforts or planning
                               improvements needed in data collection and analysis.




                               Page 15                                 GAO-03-337   Retirement Income Data
Table 1: Examples of Federal Agency Retirement Income-Related Data Collection

                                                              Data collection
  Agency                                                      program                                  Purpose of data collection                              Examples of data collected
  Census Bureau                                               Survey of Income and                     Provide information about income                        -Work experience
  (Department of Commerce)                                    Program Participation                    and government program                                  -Earnings
                                                              (SIPP)                                   participation                                           -Program participation
                                                                                                                                                               -Benefits received
                                                                                                                                                               -Property Income
                                                                                                                                                               -Demographic characteristics
  Bureau of Labor Statistics                                  National Compensation                    Provide information on wages                            -Occupational earnings
  (Department of Labor)                                       Survey                                   salaries and benefits                                   -Compensation trends
                                                                                                                                                               -Benefits offered
                                                                                                                                                               -Benefit participation
                                                                                                                                                               -Detailed plan provisions
  Employee Benefits Security                                  Form 5500                                Enforce ERISA pension                                   -Type of plan
  Administration                                                                                       requirements                                            -Number of employees
  (Department of Labor)                                                                                                                                        -Number of participants
                                                                                                                                                               -Plan amendments
                                                                                                                                                               -Plan financial position
                                                                                                                                                               -Actuarial assumptions
                                                                                                                                                               -Employer & employee contributions
  Social Security Administration                              SSA earnings and                         Administer the Social Security                          -Earnings histories
                                                              benefit records                          benefit programs                                        -Social Security benefit histories
                                                                                                                                                               -Supplemental Security Income
                                                                                                                                                               benefit histories
  Internal Revenue Service                                    IRS tax records                          Administer/enforce the tax code                         -IRS individual 1040 returns
  (Department of the Treasury)                                                                                                                                 -IRS Information returns
                                                                                                                                                               -Account balances
                                                                                                                                                               -Withdrawals
Source: GAO’s analysis of data from the U .S. Census Bureau, the U.S. Department of Labor, Social Security Administration, and the U.S. Treasury Department.




                                                                       Agencies involved in the analysis of retirement income and wealth data
                                                                       often limit their analysis to a portion of the retirement income and wealth
                                                                       information. Panel members noted that many of the agencies place little or
                                                                       no priority on a comprehensive analysis of retirement income and wealth
                                                                       data. Instead, agencies focus their data collection and analysis on data
                                                                       needed to address their mission. For example, Labor’s EBSA collects
                                                                       information on compliance with ERISA regulations, including Form 5500
                                                                       submissions. Although EBSA’s strategic plan includes retirement income
                                                                       data analysis efforts, its principal focus is on enforcement of ERISA.
                                                                       Similarly, the Bureau of the Census collects retirement related information
                                                                       in the SIPP and other surveys but its analysis of this information is
                                                                       primarily in the context of its income and poverty measurement mission.
                                                                       The SSA’s MINT model uses an estimate of workers’ pensions based on
                                                                       SIPP data from the Census Bureau, which generally relies on survey
                                                                       responses, has been criticized for using inaccurate estimates of


                                                                       Page 16                                                                     GAO-03-337      Retirement Income Data
                       nonearnings income, including retirement income. Because the Census
                       Bureau data provided to the SSA for the MINT was not gathered with it in
                       mind or coordinated for its use, the MINT model has had to use
                       simplifications and assumptions of these data which makes its final model
                       less useful for policy makers.25

                       Despite this fragmentation, some agencies have attempted to increase
                       communication between federal agencies concerning data collection
                       efforts related to retirement income. For example, the BLS’ strategic goals
                       include improving the accuracy, efficiency, and relevancy of U.S.
                       economic statistics and enhancing coordination with other agencies. The
                       Census Bureau’s strategic goals likewise include an emphasis on providing
                       accurate, timely, and accessible information on the U.S. population and
                       economy, and to maintain relationships with agencies compiling
                       administrative record data. Both the Census Bureau and the BLS are
                       members of the Federal Interagency Forum on Aging Related Statistics,26
                       which has a goal of improving both the quality and the use of aging related
                       data. In addition, BLS is one of three agencies that share responsibility for
                       leading the Inter-Departmental Committee on Employment-Related Health
                       Insurance Surveys. This committee of a dozen members was created in
                       1998 to improve coordination and reduce respondent burden by reducing
                       redundant requests for information.


Respondent Burden      Members of our expert panel reported that respondent burden, as well as
Considerations Limit   requirements set up to limit respondent burden, could hinder agencies’
Available Data         efforts to obtain retirement-related information. Panel members noted that
                       answering survey questions about retirement income and wealth could be
                       a substantial burden on respondents. They acknowledged that asking for
                       too much information could result in partial responses, erroneous
                       responses, or, in some cases, a reduction in the overall response rate.




                       25
                        SSA statistically matched defined benefit pension plan characteristics from the Pension Benefit
                       Guarantee Corporation to the survey responses.
                       26
                        The Federal Interagency Forum on Aging Related Statistics was established in 1986, with the
                       goal of bringing together federal agencies that share a common interest in improving aging
                       related data. Member agencies include: National Institute of Aging, National Center for Health
                       Statistics, Census Bureau, Administration on Aging, Agency for Healthcare Research and
                       Quality, BLS, Centers for Medicare and Medicaid Services, Department of Veterans Affairs,
                       Office of Management and Budget (OMB), Office of the Assistant Secretary for Planning and
                       Evaluation in the Health and Human Services Administration, and SSA.




                       Page 17                                           GAO-03-337   Retirement Income Data
                              However, efforts to reduce respondent burden may also limit the
                              collection of retirement information. Legislation requires OMB to review
                              surveys before they are used to collect data. The Paperwork Reduction
                              Act of 1995 (P.L. 104-13) and similar previous legislation27 is designed to
                              minimize the paperwork burden on the public while at the same time
                              recognize the importance of information to the successful completion of
                              agency missions. The act requires OMB to approve all existing and new
                              collections of information by federal agencies. In approving agency
                              collection efforts, OMB must weigh the burden to the public against the
                              practical utility of the information to the agency. Panel members noted
                              that agencies were reluctant to propose additional data collection unless
                              they could clearly establish that the benefit outweighed the perceived
                              burden. Panel members noted that efforts to reduce existing data
                              collection requirements sometimes result in a loss of information. For
                              example, the 1997 elimination of the requirement that firms routinely
                              submit SPDs was connected to an effort to reduce the respondent burden
                              on employers.


Privacy and Confidentiality   While restrictions on the collection and use of retirement data are critical
Concerns Limit the            for the protection of personal information, some panel members noted
Collection and Use of         that these restrictions also limit the availability of such information.
                              Several laws exist to protect individuals’ rights to privacy and protect the
Retirement Data               confidentiality of personal and proprietary information held by federal
                              agencies. For example, laws set strict requirements to protect data
                              collected by the Census Bureau and to limit the use of taxpayer data.28

                              Implementing such laws requires federal agencies to restrict access to data
                              they collect. For example, the Census Bureau’s data set that links the SIPP
                              with earnings and benefit records from SSA is not available to the public.
                              Protecting the confidentiality of such linked data sets is particularly
                              crucial because linked data sets may be more detailed or more sensitive
                              than the component data sets were before they were linked. Agency
                              officials must remove personal identifiers such as Social Security
                              numbers, names, and addresses. Even without these personal identifiers,



                              27
                               Previous legislation includes the Paperwork Reduction Act of 1980 (P.L. 96-511) and the
                              Paperwork Reduction Reauthorization Act of 1986 (P.L. 99-500).
                              28
                               See 13 U.S.C. 9 and 26 U.S.C. 6103. An exception in 26 U.S.C. 6103(j) authorizes the furnishing
                              of return information to Census “for the purpose, but only to the extent necessary in the
                              structuring, of censuses and…conducting related statistical activities authorized by law.”




                              Page 18                                            GAO-03-337   Retirement Income Data
as more and more information is linked, the risks that individuals could be
identified increases. The computer files for these nonpublic data sets are
available only at a limited number of secure research data centers to
approved analysts working on approved projects.29 Outside analysts
working with these data sets must be sworn Census Bureau officers and
their work must serve, at least in part, to support the Census Bureau’s
mission. If analysts permitted to use these data combine any other data
with the restricted data, the combined data are subject to the Title 13
protections. Analysts are not allowed to make copies of the data or
remove data from the secure data center.30 Before taking any of the results
of their work from the center, Census Bureau staff must review the results
to ensure that they meet the agency’s requirements for confidentiality
protection. Thus, the results that can be taken out of the center are limited
to statistical results that do not disclose data for specific individuals. Also,
the external researchers must agree that the results of their work will be
available in the public domain and not maintained as proprietary
information.

However, despite the government’s efforts to protect the information they
collect from misuse, surveys of the public and Census Bureau interviewers
indicate that people are apprehensive about the government’s use of
personal information. In a survey conducted both before and after (or just
prior to) the 2000 Census of Population and Housing, about half of the
respondents (51 percent before and 50 percent during) indicated they
thought the Census Bureau’s promise of confidentiality could be trusted,
down from about 79 percent in 1990. A smaller, but still substantial
proportion of the workers conducting census interviews and providing
those promises to respondents also indicated a lack of trust in the Census
Bureau’s assurances. A 1998 study indicated that 16.7 percent of Census
Bureau interviewers and 32.2 percent of non-Census Bureau interviewers
believed that the Bureau would give individual survey data to government
agencies such as the Federal Bureau of Investigation, the Central
Intelligence Agency, the Immigration and Naturalization Service, and the
IRS. Federal law prohibits the Census Bureau from sharing information
about individuals with these agencies. Census Bureau information about



29
 The Census Bureau’s research data centers are located in Washington, D.C.; Boston,
Massachusetts; Pittsburgh, Pennsylvania; Los Angeles, California; Berkeley, California; Durham,
North Carolina; Ann Arbor, Michigan; and Chicago, Illinois.
30
 Individuals with access are subject to penalties, including fine and imprisonment if they
disclose any confidential information.




Page 19                                            GAO-03-337   Retirement Income Data
particular individuals or businesses is only available for statistical
purposes, not for law enforcement purposes.

Public distrust of federal agencies’ use of their personal information can
undermine people’s willingness to participate in federal surveys,
potentially making the information collected less reliable.31 An article in
the Journal of Official Statistics noted that in the 1990s the rate at which
people refused to participate had risen for six surveys conducted by the
Census Bureau.32 For questions about types of income in the March 1999
CPS survey, for example, the percentage of respondents providing data for
particular items ranged from 33 percent to 78 percent. Low response rates
can undermine analysts’ statistical projections if the individuals who
choose not to respond differ in important respects from those who provide
data. If the remaining respondents are dissimilar to the population being
surveyed, conclusions about the population may not be reliable. For
example, if those who chose not to respond have higher incomes,
estimates of the populations’ income may not be reliable. Statisticians
make adjustments that can mitigate this problem, but the lower response
rates are, the more uncertainties remain.

Federal agencies and researchers continue to explore options to maximize
data usefulness without compromising respondent privacy and
confidentiality.33 For example, the Census Bureau has received permission
from the IRS to link the survey records to additional items from IRS and
SSA records.34 In addition, the Census Bureau has recently increased the



31
  See Eleanor Singer’s study “Public Perceptions of Confidentiality and Attitudes Toward Data
Sharing By Federal Agencies” in Confidentiality, Disclosure, and Data Access: Theory and
Practical Applications for Statistical Agencies, Pat Doyle, et al., (Amsterdam: Elsevier Science
B.V., 2001). In some cases after controlling for other factors associated with response rates, such
as respondents’ age, the length of the form, race, and education, privacy concerns were not
significant predictors of response rates.
32
 B.K. Atrostic et al., “Nonresponse in U.S. Government Household Surveys: Consistent
Measures, Recent Trends, and New Insights,” Journal of Official Statistics, vol. 17 no. 2, 2001,
209-226.
33
   We have discussed options for protecting privacy and confidentiality while conducting record
linkage in U.S. General Accounting Office, Record Linkage and Privacy: Issues in Creating
New Federal Research and Statistical Information, GAO-01-126SP (Washington, D.C.: April
2001).
34
 26 CFR Part 301, Federal Register vol. 68, no. 13, January 21, 2003, p. 2691.The IRS shares
responsibility with SSA for protecting the confidentiality of Social Security earnings records
compiled from W-2 forms submitted to the IRS.




Page 20                                            GAO-03-337    Retirement Income Data
              number of its research data centers where approved analysts working on
              approved projects can access confidential data.

              Researchers continue to explore statistical techniques for providing more
              information from survey data sets while reducing the risks that
              confidential information will be compromised. One well-known technique
              for doing this, “top coding,” involves reporting in data files only that an
              individual respondent’s income, for example, exceeds the “top code”
              amount, not the actual value. In this way, so many individuals are included
              in the high-income group that their identities cannot be determined. More
              sophisticated techniques include the use of methods to substitute artificial
              records containing estimated values based on knowledge of the real data.
              These simulated subjects are assigned number values selected to ensure
              that relationships between important variables are preserved. This allows
              people to remain anonymous to the researchers using the data. However,
              pension experts state that this method can only accommodate certain
              kinds of variables and, therefore, complex relationships between variables
              may not be maintained. 35

              Recent legislation may enable the Census Bureau and BLS to link their
              data on businesses for statistical purposes. In December 2002, the
              Congress enacted the Confidential Information Protection and Statistical
              Efficiency Act of 2002 as part of the E-Government Act of 2002 (P.L. 107-
              347). This act permits designated statistical agencies to share information
              concerning businesses for statistical purposes, but not information
              concerning individuals or households. It authorizes three agencies—the
              Census Bureau, the Bureau of Economic Analysis, and BLS—to share data
              on businesses with one another for statistical purposes.



Conclusions   With the proportion of retirees to workers expected to increase
              dramatically over the next couple of decades, important decisions lie
              ahead. Access to retirement income data needed to inform those decisions
              has actually decreased in some respects, despite the recommendations of



              35
               Critics of these efforts say that these techniques cannot preserve all the relationships between
              variables in a data set. Moreover, the techniques are not workable for variables, such as the age
              of retirement, that do not conform to a simple mathematical pattern. The frequency at which
              people retire, for example, is spiked at certain ages, such as 60, 62, and 65 years of age, which
              makes it difficult to summarize the data using a statistical formula. One of our panelists noted,
              however, that if only one variable has such characteristics, the actual data for that variable could
              be left as long as other variables were masked.




              Page 21                                             GAO-03-337   Retirement Income Data
the 1997 National Research Council’s Panel on Retirement Income
Modeling. Although many sources of useful retirement income data
remain, retirement analysts we consulted cited shortcomings. They noted,
for example, that data shortcomings persist when no one federal agency is
responsible for coordinating efforts to fill retirement income data needs.

Indeed, several such data needs could be met with information the federal
government already possesses or to which it already has access. For
example, Labor has the authority to obtain existing documents describing
the features of private pension plans. However, though it has this
authority, it gives employers in its National Compensation Survey a choice
about whether to provide them to support Labor’s BLS statistical studies
of pension plans. To encourage voluntary participation in the survey,
Labor does not make them available to other agencies, outside analysts or
the general public. The Census Bureau gathers or collects information
about some general features of private pension plans through surveys of
households and individuals but has not yet had the opportunity to
corroborate and supplement this data using information from respondents’
employers available through Labor. While information on pension and
individual retirement accounts is gathered through forms collected by the
IRS, the data are not regularly tabulated or linked to survey data, and thus,
are not available for the study of pensions.

While improvements in data are essential for more reliable forecasts of
retirement income, protecting respondents’ information and minimizing
the burden data collection efforts impose on firms and individuals are also
crucial. To sustain programs for compiling statistics about firms and
individuals, respondents must be able to trust that their personal
information will not be misused. Finding an appropriate balance between
providing wider access to data to support policy analysis and keeping data
secure is a persistent and evolving challenge that policymakers must
continually address. In addition, federal agencies need to consider both
the federal cost of these efforts and the financial and nonfinancial costs
imposed on respondents in comparison with the benefits expected from
improvements in data. While taking into account these cost
considerations, respondent concerns about increased reporting burden,
and agency concerns about maintaining confidentiality, the Congress, and
the Departments of Labor and the Treasury could take the next steps to
help fill some of the data needs.




Page 22                                 GAO-03-337   Retirement Income Data
Matter for        To facilitate plan participants’, beneficiaries’, and analysts’ timely access
                  to information about employer-provided pension plans, the Congress
Congressional     should consider directing the Secretary of Labor to obtain from plan
Consideration     administrators electronic filings of all SPDs and summaries of material
                  modifications required by ERISA and make them publicly available in
                  electronic form.



Recommendations   To help provide the data needed to inform important policy decisions
                  concerning retirement programs, the Secretary of Labor should direct the
                  Bureau of Labor Statistics to prepare a plan to improve data for analyzing
                  retirement income and wealth in coordination with OMB, the Federal
                  Reserve Board, IRS, and the agencies represented in the Federal
                  Interagency Forum on Aging Related Statistics, including the Census
                  Bureau, SSA, and the National Institute on Aging. The plan should include
                  cost-effective strategies to

                  •   make better use of existing statistics by linking survey and administrative
                      data,
                  •   improve access to linked data consistent with privacy and confidentiality
                      legislation, and
                  •   improve data collected from employers related to retirement income and
                      wealth.

                  For plans in place before these new filing requirements go into effect, and
                  where it is cost-effective, the Secretary of Labor should use existing
                  authority to obtain copies of summary plan descriptions and summaries of
                  material modifications in cases where analysts working on federally
                  conducted or federally sponsored research seek SPDs for statistical
                  purposes. This should assist analysts of retirement income in obtaining
                  information about the features of employer-sponsored benefit plans that
                  are not electronically available.

                  To help analysts improve analyses of retirement plan finances, the Internal
                  Revenue Service should publish on an annual basis aggregate tabulations,
                  such as those prepared in the Statistics of Income Bulletin, of information
                  filed on IRS Forms 5498, 1099-R, and W-2.



Agency Comments   We provided a draft of this report to the Departments of Commerce,
                  Labor, the Treasury, and the IRS and received technical comments from all
                  four. In response we modified the draft as appropriate. We also provided a
                  draft of this report to the 11 members of our expert panel and modified the



                  Page 23                                     GAO-03-337   Retirement Income Data
draft as appropriate in response to their comments. Commerce had no
major comments on the report (see app. VI). Labor agreed on the need for
access to accurate data but did not agree with our recommendations to the
Secretary of Labor (see app. VII).

Regarding our recommendation to collect electronic copies of SPDs,
Labor concluded that this is at odds with the Taxpayer Relief Act of 1997,
which eliminated requirements that SPDs be regularly filed with Labor.
Although Labor still has authority to request SPDs, it had indicated in final
regulations concerning SPDs that it generally intended to limit the
exercise of its authority to requesting SPDs on behalf of participants and
beneficiaries. Labor also indicated that there was little public interest in
the SPDs. Although there was not substantial public demand for paper
copies of SPD’s in Labor’s Public Disclosure Room in Washington, D.C., in
the last decade there has been a great increase in policymakers’ demand
for better data on retirement income in light of the rapid future increase in
the retiree population. Although in both 1993 and 1995 we supported
elimination of paper filing requirements, we also endorsed electronic
access to SPDs. We continue to believe that it is time to phase in a
requirement that SPDs be filed electronically. The costs involved should
be considerably less than those incurred filing and storing paper copies of
the documents. The burden imposed on plan administrators would not be
unreasonable. Labor estimated in 1998, for example, that it would cost an
average of $1.55 to provide SPDs for health benefit plans to each plan
participant, of which $1.00 was the estimated cost of materials and
postage.36 Cognizant of the shortcomings of many SPDs, experts we
consulted nonetheless indicated that better access to SPDs is a top priority
for improving retirement income data. Accordingly, we changed our
recommendation to a Matter for Consideration for the Congress to direct
the Secretary of Labor to obtain from plan administrators electronic filings
of all SPDs and summaries of material modifications required by ERISA
and make them publicly available in electronic form.

Regarding our recommendation that BLS prepare a plan to improve data
for analyzing retirement income and wealth, Labor indicated that past
efforts to coordinate improvements in retirement income data have not
been successful due to privacy concerns, and other issues. They stated
that the type of planning and coordination we envisioned usually is the



36
 U.S. Department of Labor, “Proposed Amendments to Summary Plan Description Regulations,”
Federal Register, vol. 63, no. 174, September 9, 1998, p. 48384.




Page 24                                       GAO-03-337   Retirement Income Data
purview of OMB’s Office of Statistical Policy, and that BLS could
participate in that coordination. Furthermore, the extra demands placed
on staff would not be negligible. In our view, the need for improvements in
retirement income data warrants renewed efforts to address the priorities
identified by the experts we consulted. The recommendations of these
experts focused primarily on improved use of existing data to support
policy analysis, and not on additional data collection. We recognize OMB’s
role overseeing information collection and developing policies to improve
government statistics. However, this does not preclude efforts by other
agencies to take the lead in developing plans for improvements focused on
data within specific subject areas such as retirement income. Because
OMB does not have the retirement income focus needed to coordinate in
this way, we have retained our original recommendation. That
recommendation specifically identifies OMB as one of the agencies that
should be involved in the development of a plan, and the plan should be
developed in a manner consistent with OMB’s policy.

With respect to our recommendation regarding provision of SPDs before
new electronic filing requirements go into effect, Labor stated that the
need to protect the confidentiality of survey data may hamper wider
access to SPDs. BLS, for example, assures respondents to its National
Compensation Survey that their identities will be kept confidential. The
Secretary’s authority to request SPDs is delegated to EBSA. If BLS were to
obtain SPDs from EBSA it would have to reveal the identity of its
respondents and therefore would have to obtain their consent. We
conclude that the need for improvements in retirement income data
warrants Labor’s use of its existing authority to obtain SPDs for analysts
engaged in federally conducted or federally sponsored research.
Arrangements could be developed through which BLS and other statistical
agencies could both obtain SPDs and protect the identity of respondents.
They could, for example, request SPDs from a larger number of employers
without identifying which employers were being surveyed. This is the kind
of improved access to data that we envisioned BLS could take the lead in
identifying in coordination with other agencies.


We are sending copies of this report to the Secretary of Labor, the
Secretary of the Treasury, the Secretary of Commerce, and the
Commissioner of the Internal Revenue Service. We will also make copies
available to others on request. In addition, the report will be available at
no charge on GAO’s Web site at http://www.gao.gov/.




Page 25                                 GAO-03-337   Retirement Income Data
If you have any questions concerning this report, please contact Barbara
Bovbjerg at (202) 512-7215, Robert Parker at (202) 512-9750. See appendix
VIII for other contacts and staff acknowledgments.

Sincerely yours,




Barbara D. Bovbjerg
Director, Education, Workforce
 and Income Security Issues




Robert P. Parker
Chief Statistician




Page 26                               GAO-03-337   Retirement Income Data
               Appendix I: Scope and Methodology
Appendix I: Scope and Methodology



               To identify information that experts say is a priority for improving data for
               the study of retirement income and wealth, we conducted a Web based
               survey of experts in the field and convened an 11 member panel of experts
               to discuss opportunities for improving these data. We used the Web based
               survey instrument to survey 276 experts in retirement income data.1 Before
               implementing the survey, we contacted respondents via email and asked
               them to participate. Out of our initial list of 326 experts, 27 declined to
               participate, with the majority citing busy schedules or lack of sufficient
               expertise as their reasons. In addition, we concluded that we had
               inaccurate or out-of-date E-mail addresses for 23 of the experts.

               We studied available research and interviewed experts in order to develop
               a questionnaire of options to improve retirement income. The
               questionnaire asked respondents to indicate the priority (from highest to
               lowest) they would place on 22 actions to improve retirement income
               data. Respondents were asked to rate each action independently, without
               making comparisons between the actions. We pretested the content and
               format of the questionnaire with 6 experts in the area of retirement
               income. The questionnaire was then refined and posted on our Web site
               and an E-mail message informed participants of its availability. This E-mail
               message also contained a unique user name and password that allowed
               each respondent to log on and fill out his or her own questionnaire.

               As of December 12, 2002, 190 of the experts responded to the survey (a
               69% response rate). Eighteen percent of respondents indicated that they
               were affiliated with federal agencies, about half were affiliated with
               colleges and universities, 24 percent were affiliated with other nonprofit
               organizations, and the remaining 9 percent were affiliated with for profit
               or other organizations.

               Our preliminary results of the survey identified two areas for improvement
               that respondents most often cited as having the highest priority: (1)
               matching survey and administrative data and (2) employer data. We used
               these areas to serve as the principal topics at a 1-day expert panel meeting
               at our headquarters on September 10, 2002. The 11 panelists included 5
               federal officials with responsibilities related to retirement income data, 3
               university based analysts, and 3 from private not-for-profit agencies.



               1
                 We identified these people through literature searches on topics related to retirement income
               data and by asking members of our Retirement Advisory Panel for suggested names and in turn
               asking them for additional names.




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Appendix I: Scope and Methodology




Barbara Bovbjerg, Director, Education, Workforce, and Income Security
Issues, and Robert Parker, Chief Statistician, moderated the discussion.
(For a summary of the panel’s discussion and a list of panelists, see app.
IV.)

To identify factors limiting the availability of information needed for the
study of retirement income and wealth, we reviewed documents obtained
from and interviewed officials at the Department of Labor’s (Labor)
Employee Benefit Security Administration (EBSA), and Bureau of Labor
Statistics (BLS), the Census Bureau, the Treasury Department’s Office of
Tax Analysis, the Internal Revenue Service’s (IRS) Statistics of Income
Division, the National Institute of Health’s National Institute on Aging, and
the Social Security Administration’s (SSA) Office of Research, Evaluation,
and Statistics. We also attended conferences related to retirement income
analysis sponsored by the Retirement Research Consortium and the
Society of Actuaries and interviewed analysts at the Urban Institute, The
Brookings Institution, the Employee Benefit Research Institute, and the
National Research Council.

The scope of our work did not include an evaluation of estimated costs
and benefits of specific proposals for improving retirement income data.
We did not independently verify the federal funding figures provided to us
by longitudinal survey administrators or agencies sponsoring the surveys.




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               Appendix II: Status of Recommendations From
Appendix II: Status of Recommendations From
               the 1997 Report of the Panel on Retirement
               Income Modeling


the 1997 Report of the Panel on Retirement
Income Modeling
               Below are recommendations concerning retirement income data needs
               excerpted from the 1997 report of the National Research Council’s Panel
               on Retirement Income Modeling followed by summaries on the status of
               each as of December 2002.1

               1. Continue support of longitudinal studies

               Recommendation: Existing panel surveys of middle-aged and older
               people should receive continued government support. Longitudinal data
               from these surveys are essential to analyze retirement and savings
               decisions and determine behavioral responses to changes in public and
               private sector policies. Such analyses in turn are essential to develop
               better models for forecasting the likely effects of alternative policy
               proposals on retirement income security. In particular, the Health and
               Retirement Study (HRS) and Asset and Home Dynamics Among the Oldest
               Old (AHEAD) surveys should receive continued support. These surveys
               should be refreshed periodically with new cohorts in order to offer insight
               into how behavior changes over time.

               Status: As shown in table 2, the amounts of federal support for three
               major longitudinal surveys have been sustained. The HRS and AHEAD
               studies, which are now jointly funded, have increased after taking the
               effects of inflation in account.

               Table 2: Federal Outlays for Selected Longitudinal Studies—Fiscal Years 1997-2001
                                                                                   a
                   Millions of constant fiscal year 2001 dollars
                                                                                       1997          1998          1999           2000         2001       2002
                   HRS and AHEAD                                                        $6.8          $7.0          $7.4           $9.0            $9.4   $10.1
                                                              b
                   National Longitudinal Studies                                        14.0          11.8          13.2           12.8            12.8    12.4
                                                                    c
                   Panel Study of Income Dynamics                                        2.5          2.5           3.7            3.7          3.6         2.8
                   Total                                                               $23.3        $21.3         $24.3          $25.5        $25.8       $25.3
               Source: GAO analysis of data from the National Institute of Aging and the University of Michigan’s Institute for Social Research.

               a
                These figures are adjusted for inflation using the Bureau of Economic Analysis’s gross domestic product
               price index.
               b
                   NLS
               c
                   PSID




               1
               Constance F. Citro and Eric A. Hanushek, eds., Assessing Policies for Retirement Income:
               Needs for Data, Research and Models (Washington, D.C.: National Academy Press, 1997).




               Page 29                                                                       GAO-03-337          Retirement Income Data
Appendix II: Status of Recommendations From
the 1997 Report of the Panel on Retirement
Income Modeling




The National Institute on Aging continues to fund the HRS and AHEAD
studies. Supplemental funding also comes from SSA. Both the AHEAD and
HRS studies have been refreshed with new cohorts. In 1998, interviews
began for a cohort of people born from 1924 to 1930 and a cohort of
people born from 1942 to 1947.

The National Science Foundation continues to fund the PSID. Additional
support comes from the National Institute on Aging, the National Institute
on Child Health and Human Development, and the Departments of Health
and Human Services, Agriculture, Housing and Urban Development
(HUD), and Labor.

Labor sponsors the National Longitudinal Survey (NLS) through BLS. The
NLS is conducted under contract with researchers at Ohio State
University, the University of Chicago, the Census Bureau and the
University of Wisconsin. In addition to Labor funding, financial support
has come from agencies including the National Institute of Child Health
and Human Development, the National Institute on Aging, the National
Institute on Drug Abuse, the National Institute on Alcohol Abuse and
Alcoholism, and the Departments of Defense, Justice, and Education.

2. Measure expenditures

Recommendation: Panel surveys of middle-aged and older people should
experiment with methods to develop measures of families’ total
expenditures and expenditures on housing and medical care. Such
consumption measures are important for projections of economic well
being in retirement.

Status: The HRS and AHEAD surveys provide on a longitudinal basis
respondents’ estimates of many categories of expenditures including
housing expenditures, total out-of-pocket medical expenditures, and total
expenditures, total expenditures relative to income, as well as information
on savings preferences. Labor’s Consumer Expenditure Survey provides
cross-sectional rather than longitudinal data on many types of
expenditures, including housing expenditures, and medical expenditures,
and total expenditures and related income. The American Housing Survey,
sponsored by HUD, provides detail on housing expenditures . The
proposed American Community Survey also would provide limited detail
on housing expenditures. The Medical Expenditure Panel Survey (MEPS)
provides extensive data on medical expenditures.




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Income Modeling




3. Gather more data on younger people

Recommendation: Panel surveys of younger people, such as the National
Longitudinal Survey of Youth (NLSY), should include detailed
questionnaire modules on pension coverage, wealth, health status, and
retirement- and savings-related expectations. Such information is needed
to fully understand life-cycle behavior and to track the disparities in
income and wealth that are evident by middle age.

Status: The NLSY asks about the total amount of retirement savings,
amounts contributed, and amounts withdrawn, and pension coverage. It
also provides information about assets and debt and limited information
about health (height, weight, and general evaluation of health), but not
retirement or savings expectations.

In 1995-99 interviews, the National Longitudinal Survey of Young Women
(NLSYW) asked respondents the extent to which they agreed or disagree
with statements such as “Work is the most meaningful part of life” and
“People who don’t retire when they can afford to are foolish.” The NLSYW
also asked respondents about the availability of a retirement or pension
plans in 1978 and in each round from 1978, 1983, through 1999. The 1991
and 1995-99 rounds of the survey included more detailed questions on
amounts in retirement plans, formula for calculating benefits for defined
benefit plans provided by current and previous employers, vesting status,
and expectations about retirement, such as expected amounts of benefits.

4. Collaborate to improve data quality and utility

Recommendation: Agencies and researchers involved in retirement
income-related panel surveys of individuals, and other surveys as
appropriate (such as the Survey of Consumer Finances (SCF) and the
Survey of Income and Program Participation (SIPP)), should collaborate
regularly in reviewing questionnaire content and data collection practices
to identify ways to improve data quality and utility. For example, the
bracketing technique used in HRS and AHEAD that has been
demonstrated to reduce nonresponse to important items should be
adopted in other surveys. Also, such surveys might include a common core
of questions on specific topics. The National Institute on Aging should
facilitate such collaborative efforts.

Status: Federal agencies collaborate through entities such as (1) the
Federal Interagency Forum on Aging-Related Statistics, originally
established by the National Institute on Aging, National Center for Health


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Appendix II: Status of Recommendations From
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Income Modeling




Statistics, and Census Bureau and (2) the Inter-Departmental Committee
on Employment-Related Health Insurance Surveys, headed by the BLS,
National Center for Health Statistics, and the Agency for Healthcare
Research and Quality. The Federal Committee on Statistical Methodology
and the Interagency Committee on Confidentiality and Data Access have
coordinated research on techniques such as the bracketing technique are
now widely used and researchers do collaborate on questionnaire design.
In addition, the Census Bureau and other statistical agencies seek
comments from a wide range of researchers on the content of questions
before fielding survey instruments. For example, the Interagency
Committee on the SIPP, which consists of representatives of interested
federal agencies, and the American Statistical Association’s Survey
Research Methods Section SIPP Working Group, which consists of federal
and non-federal analysts, both advise the Census Bureau on that survey.

5. Establish interagency task force on employer data

Recommendation: Labor should establish an interagency task force on
employer data to specify an integrated plan for collecting retirement
income-related information. The plan should specify short-term and long-
term goals that consider user needs, resource constraints, and the
problems of obtaining information from employers due to such factors as
low response rates, locating the appropriate respondents, and
confidentiality concerns. The task force should involve researchers,
private benefit consultants, and representatives of public and private
employers in its work.

Status: According to officials at the Department’s EBSA, Labor has not
made this a priority because its resources are limited.

6. Gather more data on benefit plan offerings

Recommendation: The employer data collection plan should include
short-term and long-term goals for obtaining improved information on the
distribution across employers of all benefit plan offerings (including
pensions, health insurance, disability insurance, retiree health insurance,
life insurance). Comprehensive baseline information is a priority need,
along with a plan for regular updating. Needed data elements include
benefit plan characteristics and costs, employer characteristics (e.g.,
number of employees, financial characteristics, wage structure), and
workforce characteristics (e.g., age structure) for public and private
employers and the self-employed.



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Income Modeling




Status: Labor’s BLS has increased the amount of information gathered
through its National Compensation Survey, which includes components
that had been gathered through the Employee Benefits Survey, the
Employment Cost Index survey, and the Occupational Compensation
Survey. The Employee Benefits Survey did not provide tabulations of the
estimated percentage of establishments providing specified types of
benefits, but the National Compensation Survey does. The survey includes
components for state and local government employers, medium and large
private employers, and small private employers, but not federal employers
or the self-employed. The survey provides data on number of employees,
employer and employee costs, wage structure, and the characteristics of
retirement benefit plans. It does provide data on the employer’s cost of
providing defined benefit and defined contribution retirement programs. It
does not provide information on financial characteristics of plans (such as
assets and liabilities) and does not provide information on the age
structure of the workforce.

In addition, the MEPS, sponsored by the Agency for Healthcare Research
and Quality, provides additional data on health insurance plans.

7. Redesign and enhance employee benefits survey.

Recommendation: The employer data collection task force should give
priority to redesigning and enhancing existing data collection systems on
employer benefit offerings and related topics. Such systems include the
Employee Benefits Survey, which currently provides information for broad
categories of employe[rs] but not for employe[es], and the Form 5500 data
series, which serves regulatory purposes and currently has limited
research use. Consideration should be given to improving the Form 5500
series, including:

•   making the data more timely and accessible (e.g., on-line);
•   linking records over time to provide panel data;
•   merging the Form 5500 benefit plan information with the kind of employer
    financial characteristics found in the Compustat database;
•   working to standardize the reporting for health care and disability plans, so
    that they can be added to the Form 5500 database; and
•   finding ways to add information about benefit plan features to the database,
    perhaps by abstracting analytically useful information from the narrative plan
    descriptions that are filed with the Form 5500.

Status: The Employee Benefits Survey (now part of the National
Compensation Survey) continues to provide data for categories of
employers, not categories of employees. It provides data by employer


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Income Modeling




industry group, employer employment size group, employee union status,
employee occupational group, and employer geographic location. BLS has
begun providing aggregate estimates for all private employers, rather than
only providing data separately for small private employers, and large
private employers, as it did in the past. However, the survey does not
cover federal, military, agricultural, fishing, forestry, or private household
employers.

Data from IRS Form 5500 continues to become available well after the end
of the reporting year. (Data for 1998 or the 1998-99 reporting year became
available in 2002.) In part, this is because the IRS deadline for submitting
the forms is 7 months after the end of the reporting year. For example, for
a firm with a 1998 reporting year beginning December 15, 1998, and ending
December 14, 1999, the Form 5500 was due July 31, 2000. In addition,
Labor takes several months to review and edit the returns before making
them publicly available. Labor makes Form 5500 data files available to
researchers and policy analysts, but its Web site does not include links to
the data. A private firm provides a Web site with images of the completed
forms, but not compiled data sets. Labor does not link Form 5500 reports
by firm to facilitate longitudinal analysis. Linking these consolidated
reports of publicly held companies with Form 5500 data is difficult
because these reports can cover only parts of a company, more than one
company, or privately held companies. Some researchers have linked
these data for selected firms.

Labor no longer requires that it receives the summary plan descriptions
regularly, and as a result the public no longer has access rights to new or
revised versions. Labor does, however, incorporate some data from these
plans in its National Compensation Survey data. This includes, for
example, information on normal retirement ages and formulas for
calculating employer contributions to pension plans.

8. Gather more data on labor demand for older workers

Recommendation: The employer data collection plan should include
short-term and long-term goals for obtaining information on labor demand
for older workers and the factors that may affect that demand. Needed
data elements include employment patterns of older workers,
compensation and benefit costs by age, and worker productivity by age.
Very little information on these topics is currently available, and some
raise difficult measurement issues. A reasonable short-term goal is to
sponsor case studies of employers that can help identify important
variables and feasible means of collecting them on a larger scale.


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Income Modeling




Status: The Health and Retirement Study and other surveys provide much
data on employment patterns and salary and wages of older workers. Little
has been done, however, concerning compensation and benefits costs or
productivity by age.

9. Conduct longitudinal survey of employers and their workers

Recommendation: The employer data collection task force should
consider the feasibility and cost-effectiveness of a panel survey, which is
periodically refreshed that collects detailed information on employers and
their workers. Such a survey should cover the full universe, including
private for profit, nonprofit, and government employers, and the self-
employed. Longitudinal data from an employer-based survey are needed to
analyze the factors that affect employer decisions about recruitment and
retention of older workers and benefit plan offerings and how these
decisions, in turn, affect workers.

Status: Such a task force has not been formed and no survey like the one
the panel recommended has been undertaken. BLS has developed a
longitudinal database of business establishments, the “LDB”, based on
data from states’ unemployment insurance programs, and the Census
Bureau continues to maintain a longitudinal establishment database
covering all private nonagricultural establishments. Neither of these
databases includes data on pensions or other retirement plans. The BLS
database provides data on employees’ hours and wages. The Census
Bureau database also provides data on employment and wages, and
periodically includes data on employer contributions to pension plans and
health insurance. To some extent the HRS links data from individuals and
their employers on a longitudinal basis, but it tracks the individuals, not
the firms over time. The E-Government Act of 2002 (P.L. 107-347) may
facilitate collaboration between the Census Bureau and BLS and could
provide for linking National Compensation Survey (NCS) data on
retirement plans to the Census Bureau’s data on business establishments.

10. Gather more data from employers of HRS/AHEAD
    sample members

Recommendation: HRS and AHEAD should develop and implement a
plan for obtaining information on a continuing basis on the pension and
health insurance offerings of the employers of the HRS/AHEAD sample
members.




Page 35                                       GAO-03-337   Retirement Income Data
Appendix II: Status of Recommendations From
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Income Modeling




Status: Data from HRS sample members’ employers is available. Similar
efforts have been undertaken with other surveys, such as the National
Longitudinal Study of Mature Women.

11. Match panel survey responses and key administrative records

Recommendation: Matched files of panel survey responses and key
administrative records should be regularly produced for retirement-
income-related policy analysis and projection purposes. Examples include
exact matches of survey records and Social Security earnings histories and
benefit records, Medicare and Medicaid records, and the National Death
Index. The added information in matched files is obtainable at low
marginal cost and is essential for analysis of retirement and savings
decisions and the effect of medical care use and expenditures on
retirement security.

Status: Some matches between administrative data and panel survey data
have been achieved. HRS investigators have completed matches between
HRS and Social Security earnings and benefit record data, National Death
Index data, and Medicare records. These are available on a restricted basis
to selected researchers and policy analysts.

The Census Bureau has matched SIPP data with Social Security earnings
records and extracts from individuals’ IRS tax return data. The Census
Bureau’s Longitudinal Employer Household Dynamics (LEHD) project is
exploring options for more extensive matches between Form 5500 data
from employers and Census Bureau survey data on establishments.2
Recently finalized Treasury regulations give the Census Bureau access to




2
  The LEHD program, which was started in 1998, is designed to evaluate and improve the quality
of data collected in the Census Bureau’s demographic and economic censuses and surveys
through longitudinal analysis. The program combines longitudinal micro data from federal and
state administrative data on employers and employees with these census and survey data. In
addition to its use to improve its census and surveys, the Census Bureau conducts policy-
relevant research on labor force and employment issues and creates new data products.
Currently, the LEHD program provides quarterly workforce indicators for a number of
participating states. The linkage of Form 5500 data and Census Bureau establishment data is
described in Julia Lane, et al., “New Uses of Health and Pension Information: The 5500 file at the
Census Bureau, LEHD Technical Paper No. TP-2002-03” (Washington, D.C.: U.S. Bureau of the
Census, January 2002).




Page 36                                            GAO-03-337   Retirement Income Data
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Income Modeling




specified IRS tax return records to support SIPP and LEHD data linkage
efforts.3

Also, researchers at the Employee Benefit Research Institute (EBRI)
linked survey data to state Medicaid records in order to develop state
specific projections of Medicaid expenditures.

12. Increase researchers’ access to exact match files safeguarding
    confidentiality

Recommendation: Agencies should collaborate on the development and
oversight of matched data sets for individuals and employers, with input
from researchers on content. They should also vigorously explore creative
solutions for providing research access to exact match files that safeguard
the confidentiality of individual responses. Possible solutions include: (1)
developing public use files that contain summary variables derived from
the administrative records portion of the matched file (2) requiring
researchers to sign nondisclosure agreements with significant penalties for
violations; and (3) providing researchers with access to matched files on
site at secure data centers.

Status: Access to linked data sets remains quite limited. Access to HRS
linked data for example, is typically made available via a rigorous
application process resulting in a data use agreement with the University
of Michigan. To date, none of the linked data sets are available in
encrypted public use files. However, according to HRS researchers, “The
HRS, in conjunction with several other funded projects, has established a
secure data facility to broaden access to the restricted datasets. We are
exploring ways to eventually implement a system for encrypted online
delivery of sensitive data files, as well as extend access to our restricted
data.” (One such method is the further use of data centers, which provide
access to restricted information, including linked data sets, for approved
researchers working on data sets. For more information on data centers,
see page 19).




3
  Final regulation, “Disclosure of Return Information to the Bureau of the Census, Department of
the Treasury, Internal Revenue Service, 26 CFR Part 301,” Federal Register vol. 68, no. 13,
January 21, 2003, p. 2691.




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13. Fund regular evaluation of data quality

Recommendation: Budgets for retirement income-related surveys should
include sufficient resources for regular evaluation of data quality.
Evaluation methods include reinterviewing sub-samples of respondents to
measure consistency of reporting; experimentation with alternative
question wording to identify possible reporting problems; and comparing
survey estimates with administrative records to determine the
completeness and accuracy of survey reporting, taking care to adjust for
differences in definitions and other aspects of the two sources.

Status: Several studies using the recommended methods have been
conducted, with mixed results. The Census Bureau conducted a study
comparing estimates of various types of 1990-96 incomes in SIPP and CPS
to benchmark data estimated by the Census Bureau from the personal
income estimates in the National Income and Product Accounts. The study
found disparities between the survey based Census estimates and the
administrative record based personal income estimates that could not be
explained by differences in definitions.4 For 1996, the aggregate wages and
salary estimate based on CPS survey data was 102 percent of the
benchmark based on administrative records and the CPS social security
and railroad retirement benefit payments data were 92 percent of the
benchmark. In contrast, the study found more substantial disparities for
several other types of income. The aggregate CPS data for property
income was 71 percent of the benchmark, and CPS data for pension
income was 77 percent of the benchmark. The study is being replicated
with data for 1999. Other studies have noted definitional and quality
differences between estimates of personal savings from the Flow of Funds
Accounts and National Income and Product Accounts.5 Another study
compared estimates of wealth from the SCF, PSID, and SIPP.6



4
 Marc I. Roemer, Assessing the Quality of the March Current Population Survey and the
Survey of Income and Program Participation Income Estimates, 1990-1996, Income Surveys
Branch Housing and Household Economics Statistics Division, U.S. Census Bureau (Washington,
D.C.: June 16, 2000).
5
 U.S. Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2004-13,
(Washington, D.C., January 2003), p. 33.
6
 See for example, R. Curtin, F.T. Juster and J. Morgan, “Survey Estimates of Wealth: An
Assessment of Quality” in The Measurement of Saving, Investment and Wealth, R.E. Lipsey and
H.S. Tice, editors, National Bureau of Economic Research, Studies in Income and Wealth, 52
(Chicago: University of Chicago Press, 1989).




Page 38                                         GAO-03-337   Retirement Income Data
Appendix II: Status of Recommendations From
the 1997 Report of the Panel on Retirement
Income Modeling




The Department of Treasury’s Office of Tax Analysis has compared
estimates of pension plan participation and contributions with estimates
from the Census Bureau survey data. The Office of Tax Analysis linked W-
2 data with Statement of Income (SOI) data from Form 1040. The results
from this data set matched results from Census Bureau surveys, except for
low-income households. The tax records obviously don’t include nonfilers,
but in addition, by design, the SOI sample includes relatively few low-
income filers (in the order of 1 in 5,000 filers), but all filers in the highest
income brackets. The Census Bureau surveys such as the SIPP over
sample low income households and have much less data for the highest
income households. For most income brackets, however, the data match
quite well, according to Treasury officials.

The Census Bureau periodically assesses the quality of CPS data by
reinterviewing a subsample of respondents, but none of the reinterviewing
has covered questions on income for at least the last 4 years, according to
the Census Bureau quality assurance staff.

The Census Bureau has also studied the accuracy of respondent data by
matching income data in the March CPS with selected income detail on
individual IRS income tax returns and SSA earnings and benefit records. A
similar effort is underway using 1999 data.

One of the components of the BLS’s National Compensation Survey is a
program of re-interviews of a sub-sample of respondents to verify and
clarify survey data, including data on retirement plans.

HRS investigators have compared employee responses about retirement
income to employer provided data and Social Security records and found
wide discrepancies. It is unclear to what extent these result from
respondents’ limited knowledge of their pensions or data errors.




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               Appendix III: GAO Survey on Retirement Income
Appendix III: GAO Survey on Retirement Income
               Data Needs and List of Respondents



Data Needs and List of Respondents


               Questionnaire




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                                               Appendix III: GAO Survey on Retirement Income
                                               Data Needs and List of Respondents




Survey Results

1. Data on households and individuals: Please indicate the priority you would place on taking the following actions to improve
retirement income data.

                                                          Highest           High     Medium           Low       Lowest            No Number
                                                           priority      priority     priority     priority     priority     opinion     of
                                                         (percent)     (percent)    (percent)    (percent)    (percent)    (percent)  cases
 Increase support for longitudinal studies of
 individuals over 50 years of age, such as the HRS            27.6          40.0         23.8          5.9          2.2         0.5     185
 Expand longitudinal studies of retirement savings of
 younger individuals (age 50 or below)                        26.9          39.2         24.2          7.5          1.6         0.5     186
 Increase support for other studies of households
 and individuals' retirement and wealth, such as the
 SIPP, and the SCF                                            18.2          28.3         40.6         10.7          1.1         1.1     187
 Improve measurement of family and household
 consumption expenditures in surveys such as the
 CEX and in panel surveys such as HRS                         15.2          33.2         32.1         12.0          6.0         1.6     184


2. Data on employers and employee benefits: Please indicate the priority you would place on taking the following actions to improve
retirement income data.

                                                           Highest          High     Medium           Low       Lowest            No Number
                                                            priority     priority     priority     priority     priority     opinion     of
                                                          (percent)    (percent)    (percent)    (percent)    (percent)    (percent)  cases
 Improve the design and reporting of retirement
 income-related data from employers, such as
 mandatory pension plan disclosures and surveys on
 benefit plan offerings                                        33.0          31.4         25.0          8.0         1.6         1.1     188
 Conduct research on labor demand for older workers
 and the factors that may affect that demand                   13.8          28.2         31.9        19.1          6.4         0.5     188
 Conduct a longitudinal survey of employers and their
 workers                                                       14.0          25.3         33.9        21.5          3.2         2.2     186
 Improve data from the employers of respondents in
 surveys such as the HRS, and the AHEAD                        30.1          35.5         21.9          7.1         2.2         3.3     183




                                               Page 47                                           GAO-03-337   Retirement Income Data
                                               Appendix III: GAO Survey on Retirement Income
                                               Data Needs and List of Respondents




3. Other areas for improvement: Please indicate the priority you would place on taking the following actions to improve retirement
income data.

                                                           Highest          High     Medium           Low       Lowest            No Number
                                                            priority     priority     priority     priority     priority     opinion     of
                                                          (percent)    (percent)    (percent)    (percent)    (percent)    (percent)  cases
 Improve national data on aggregate retirement and
 non retirement assets such as Flow of Funds, and
 National Income and Product Accounts                           9.2          20.0         30.3        28.6          8.1         3.8     185
 Improve matching of survey respondents with key
 administrative records, while protecting
 confidentiality                                               45.2          30.1         14.5          5.4         2.2         2.7     186
 Increase researchers' access to datasets on
 individuals or households matched with
 administrative data sets                                      56.8          25.1          9.8          4.4         2.7         1.1     183
 Improve collaboration between agencies and
 researchers to improve questionnaires and data
 collection and dissemination practices                        24.1          40.1         27.3          7.0         0.5         1.1     187


4. Crosscutting actions: Please indicate the priority you would place on taking the following actions to improve retirement income
data.

                                                          Highest           High     Medium           Low       Lowest            No Number
                                                           priority      priority     priority     priority     priority     opinion     of
                                                         (percent)     (percent)    (percent)    (percent)    (percent)    (percent)  cases
 Collect additional data in existing surveys                  23.0          36.1         31.1          6.6          0.5          2.7    183
 Begin new surveys                                             4.0          14.7         29.9         35.0         13.6          2.8    177
 Improve the quality of existing surveys                      25.7          44.3         22.4          2.7          2.2          2.7    183
 Improve the timeliness of existing data                      21.6          33.0         24.9         14.1          4.3          2.2    185
 Improve researchers' access to existing
 administrative data, such as Social Security
 earnings records or Medicare records                         50.8          28.6         13.5          3.8          2.2         1.1     185
 Improve techniques for protecting the privacy of
 respondents' survey and administrative data                  20.5          22.2         34.1         16.2          3.2         3.8     185
 Fund research on retirement income and wealth                28.1          38.9         22.7          7.6          1.6         1.1     185
 Fund expanded data collection efforts                        18.4          45.3         27.4          5.0          1.7         2.2     179
 Fund increased or improved matching of data                  31.1          37.3         22.0          5.6          1.7         2.3     177
 Fund new or improved modeling efforts                        11.7          18.4         40.8         20.7          6.1         2.2     179




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Data Needs and List of Respondents




5. Are there other types of actions that are important for improving the availability,
timeliness, or quality of retirement income and wealth data?

Percent writing comments                                                  Number of cases
43.2                                                                                  190


6. Which of the following describe the way that you work with retirement income and
wealth data? (Check all that apply.)

                                                                  Percent          Number
                                                                 checking          of cases
Data collection and/or data management                               26.7               187
Primary data analysis                                                53.5               187
Secondary data analysis                                              58.8               187
Policy analysis or development                                       74.3               187
Other                                                                 9.1               187


                                                                   Percent
                                                                 explaining         Number
                                                                      other         of cases
6a. If you checked 'other' (above), please specify the way
you work with retirement income data in the text box
below.                                                                  100              17


7. Which of the following describes your affiliation?

                                                                   Percent          Number
                                                                  checking          of cases
Federal government                                                    18.0               189
State or local government                                              0.0               189
University or college                                                 48.7               189
Other not-for-profit organization                                     24.3               189
Private for profit organization                                        7.4               189
Other                                                                  1.6               189


                                                                   Percent
                                                                 explaining         Number
                                                                      other         of cases
7a. If you checked "other" (above), please
specify your affiliation in the text
 box below.                                                            66.7                3




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Data Needs and List of Respondents




8. Which of the following data sets have you used in your work during the past 5 years?
(Check all that apply.)

                                                               Percent           Number
                                                              checking           of cases
AHEAD                                                             20.1                184
CEX                                                               35.9                184
CPS                                                               76.6                184
Flow of funds data                                                30.4                184
HRS                                                               63.6                184
IRS Form 5500 data                                                38.0                184
NCS (incorporating the Employee Benefits Survey                   17.9                184
National Income and Product Accounts data                         35.9                184
PSID                                                              35.9                184
SSA administrative files                                          36.4                184
SCF                                                               47.3                184
SIPP                                                              51.1                184
Other                                                             21.7                184


                                                               Percent
                                                             explaining          Number
                                                                  other          of cases
8a. If you checked "other" (above), please
specify the data sets in the text box below.                       100                40


Additional comments: If you would like to make additional comments concerning any
topic covered in this questionnaire, please enter them in the textbox below.

Percent writing comments                                                  Number of cases
14.7                                                                                  190




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                      Appendix III: GAO Survey on Retirement Income
                      Data Needs and List of Respondents




List of Respondents   Henry J. Aaron
                      The Brookings Institution
to the Survey
                      Julie Agnew
                      College of William and Mary

                      John Ameriks
                      TIAA-CREF Institute

                      Joseph M. Anderson
                      Capital Research Associates

                      Kenneth Apfel
                      University of Texas at Austin

                      Katherine Baicker
                      Dartmouth College

                      Vickie Bajtelsmit
                      Colorado State University

                      Dean Baker
                      Center for Economic and Policy Research

                      Laurel Beedon
                      Public Policy Institute, AARP

                      Dan Beller
                      Employee Benefits Security Administration

                      Department of Labor

                      Keith A. Bender
                      University of Wisconsin-Milwaukee

                      Mark C. Berger
                      University of Kentucky

                      B. Douglas Bernheim
                      Stanford University

                      Merton C. Bernstein
                      Washington University


                      Page 51                                         GAO-03-337   Retirement Income Data
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Joydeep Bhattacharya
Iowa State University

Andrew Biggs
Cato Institute

Emily Blank
Howard University

Robert B. Blancato
Matz, Blancato & Associates, Inc.

Henning Bohn
University of California - Santa Barbara

Christopher M. Bone
Actuarial Science Associates

Barry P. Bosworth
The Brookings Institution

Linda Smith Brothers
University of Wisconsin - Madison

Charlie Brown
University of Michigan

Jeffrey Brown
Harvard University

Richard V. Burkhauser
Cornell University

Gary Burtless
The Brookings Institution

John Y. Campbell
Harvard University

William J. Carrington
Welch Consulting




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Yung-Ping Chen
University of Massachusetts Boston

Constance F. Citro
National Research Council

Robert L. Clark
North Carolina State University

Denise M. Clark
Feder Semo Clark & Bard, P.C.

Joao Cocco
London Business School

Lee Cohen
Social Security Administration

Steven B. Cohen
Agency for Healthcare Research and Quality|
Department of Health and Human Services

Courtney C. Coile
Wellesley College

Craig Copeland
EBRI

Christopher Cornwell
University of Georgia

Julia Lynn Coronado
Federal Reserve Board

David Cutler
Harvard University

Kimberly Darling
SAG Corporation

Angus Deaton
Princeton University



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Jeff Dominitz
Carnegie Mellon University

Stuart Dorsey
Baker University

Karen Dynan
Federal Reserve Board

Ryan D. Edwards
Stanford University

Douglas W. Elmendorf
Federal Reserve Board

Gary V. Engelhardt
Syracuse University

Eric M. Engen
American Enterprise Institute

William E. Even
Miami University

Jeff Faux
Economic Policy Institute

Melissa Favreault
Urban Institute

Karen W. Ferguson
Pension Rights Center

Douglas Fore
TIAA-CREF Institute

Jonathan Barry Forman
University of Oklahoma

Leora Friedberg
University of Virginia




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Data Needs and List of Respondents




Robert B. Friedland
Georgetown University

Don Fullerton
University of Texas at Austin

William G. Gale
The Brookings Institution

Ron Gebhardtsbauer
American Academy of Actuaries

Thomas Glass
Glass & Co. CPAs

Jagdeesh Gokhale
Federal Reserve Bank of Cleveland

Carol Gold
Internal Revenue Service

Nancy M. Gordon
Census Bureau, Department of Commerce

Pierre-Olivier Gourinchas
Princeton University

Brian Graff
American Capital Strategies

Matthew Greenwald
Matthew Greenwald & Associates, Inc.

Lijia Guo
University of Central Florida

Alan L. Gustman
Dartmouth College

Steven Haider
RAND




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Eric Hanushek
Stanford University

Brian Headd
Small Business Administration

Joni Hersch
Harvard University

Roger Hickey
Institute for America’s Future

Catherine Hill
National Academy of Social Insurance

Richard Hinz
World Bank (formerly, Department of Labor)

Lorrie L. Hoffman
University of Central Florida

Karen C. Holden
University of Wisconsin-Madison

Sarah Holden
Investment Company Institute

Kevin M. Hollenbeck
W.E. Upjohn Institute

Martin Holmer
Policy Simulation Group

Marjorie Honig
City University of New York

M. Cindy Hounsell
Women’s Institute for a Secure Retirement

Warren Hrung
Department of the Treasury




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Data Needs and List of Respondents




Michael D. Hurd
RAND

Edwin C. Hustead
The Hay Group

Robert M. Hutchens
Cornell University

Howard M. Iams
Social Security Administration

Estelle James
Consultant

David C. John
Heritage Foundation

Richard W. Johnson
Urban Institute

David Joulfaian
Department of the Treasury

F. Thomas Juster
University of Michigan

Arthur B. Kennickell
Federal Reserve Board

Surachai Khitatrakun
University of Wisconsin-Madison

Kilolo Kijakazi
Center on Budget and Policy Priorities

Geoffrey Kollmann
Congressional Research Service

Sophie M. Korczyk
Analytical Services




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Marvin H. Kosters
American Enterprise Institute

Douglas L. Kruse
Rutgers University

Julia Lane
Urban Institute

Annamaria Lasardi
Dartmouth College

Ronald Lee
University of California, Berkeley

Jules Lichtenstein
AARP

Jeffrey B. Liebman
Harvard University

Dennis Logue
Price College

Robin Lumsdaine
Brown University

David A. Macpherson
Florida State University

Brigitte C. Madrian
University of Chicago

Joyce Manchester
Social Security Administration

Charles F. Manski
Northwestern University

Ann A. McDermed
North Carolina State University




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Andrew Metrick
University of Pennsylvania

Daniel J. Mitchell
Heritage Foundation

Olivia S. Mitchell
University of Pennsylvania

H. Fred Mittelstaedt
University of Notre Dame

Catherine Phillips Montalto
Ohio State University

James H. Moore
Social Security Administration

Kathryn L. Moore
University of Kentucky

Brent R. Moulton
Bureau of Economic Analysis, Department of Commerce

James Musumeci
Southern Illinois University at Carbondale

Randall J. Olsen
Ohio State University

Van Doorn Ooms
Committee for Economic Development

Peter R. Orszag
The Brookings Institution

Beverly J. Orth
William M. Mercer, Inc

Michael Packard
Pension Benefit Guaranty Corporation




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Michael G. Palumbo
Federal Reserve Board

Constantijn W. A. Panis
RAND

Jonathan A. Parker
Princeton University

Donald O. Parsons
George Washington University

Christina Paxson
Princeton University

Cynthia D. Perry
Massachusetts Institute of Technology

Pamela J. Perun
Urban Institute

Joseph S. Piacentini
Employee Benefits Security Administration

Department of Labor

Christopher Polk
Northwestern University

James Poterba
Massachusetts Institute of Technology

Elizabeth T. Powers
University of Illinois at Urbana-Champaign

Patrick J. Purcell
Congressional Research Service

John W. R. Phillips
Social Security Administration

Anna M. Rappaport
William M. Mercer, Inc.


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Robert R. Reed III
University of Kentucky

Cordelia W. Reimers
Hunter College

John C. Rother
AARP

John E. Sabelhaus
Congressional Budget Office

Dallas L. Salisbury
EBRI

Andrew A. Samwick
Dartmouth College

Thomas R. Saving
Texas A & M University

Patricia L. Scahill
Ernst & Young LLP

Sylvester J. Schieber
Watson Wyatt Worldwide

Robert F. Schoeni
University of Michigan

James H. Schultz
Brandeis University (retired)

John C. Scott
American Benefits Council

Lois B. Shaw
Institute for Women’s Policy Research

Stuart A. Sirkin
Pension Benefit Guaranty Corporation




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Jonathan S. Skinner
Dartmouth College

Timothy A. Smeeding
Syracuse University

Kent Smetters
Wharton School

Karen E. Smith
Urban Institute

James P. Smith
RAND

Paul Smith
Department of the Treasury

Ralph Smith
Congressional Budget Office

Frank P. Stafford
University of Michigan

Norman Stein
University of Alabama

Thomas L. Steinmeier
Texas Tech University

C. Eugene Steuerle
Urban Institute

Ann Huff Stevens
Yale University

Annika E. Sundén
Boston College

Richard M. Suzman
National Institute on Aging




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Kenn B. Tacchino
Widener University

Albert Teplin
Federal Reserve Board (Retired)

Lawrence H. Thompson
Urban Institute

Shripad Tuljapurkar
Mountain View Research

Cori E. Uccello
Urban Institute

Jack L. VanDerhei
Temple University

Steven F. Venti
Dartmouth College

Alice Wade
Social Security Administration

Daniel Weinberg
Census Bureau, Dept. of Commerce

David R. Weir
University of Michigan

Joseph White
Case Western Reserve University

William J. Wiatrowski
Bureau of Labor Statistics, Department of Labor

Joshua L. Wiener
Oklahoma State University

Ernest Wilcox
Bureau of Economic Analysis, Department of Commerce




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Samuel H. Williamson
Miami University

Robert J. Willis
University of Michigan

Doug A. Wolf
Syracuse University

Aliya Wong
Thelen Reid & Priest, LLP

Jing Jian Xiao
University of Rhode Island

Paul J. Yakoboski
American Council of Life Insurers

Sheila R. Zedlewski
Urban Institute

Stephen P. Zeldes
Columbia University




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               Appendix IV: Views of GAO’s Expert Panel on
Appendix IV: Views of GAO’s Expert Panel on
               Retirement Income Data Needs



Retirement Income Data Needs

               This appendix provides the summary of discussion by members of an
               expert panel that we convened on retirement income data needs on
               September 10, 2002. The panel consisted of 11 nationally recognized
               experts who, during a day-long meeting, discussed the issues the federal
               government should address in order to improve the quality of retirement
               income data statistics. All the ideas presented in this appendix may not
               represent the view of every member of the panel. Moreover, these ideas
               should not be considered to be our views.

               Members of Our Expert Panel

               The following individuals were members of our expert panel on retirement
               income data:

               •   Eric Engen, Resident Scholar, The American Enterprise Institute
               •   Melissa Favreault, Research Associate, The Urban Institute
               •   Nancy Gordon, Associate Director for Demographic Programs, US Census
                   Bureau
               •   Alan Gustman, Professor of Economics, Dartmouth College
               •   Richard Hinz, Chief Economist and Director of Policy and Research, EBSA,
                   Department of Labor (now at the World Bank)
               •   Howard Iams, Director, Division of Policy Evaluation, Office of Policy, Social
                   Security Administration
               •   John Sabelhaus, Unit Chief, Long-Term Modeling Group, Congressional
                   Budget Office
               •   Dallas Salisbury, President, Employee Benefit Research Institute
               •   Jack VanDerhei, Associate Professor, Department of Risk, Insurance &
                   Healthcare Management, Fox School of Business and Management, Temple
                   University
               •   William Wiatrowski, Chief, Compensation Data Analysis and Planning
                   Division, Bureau of Labor Statistics, Department of Labor
               •   Robert Willis, Professor of Economics, Institute for Social Research,
                   University of Michigan

               Views of the Panelists

               The panel members discussed a number of issues the federal government
               needs to address in order to improve the quality of retirement income
               statistics. Specifically, panelists discussed actions and strategies the
               federal government could undertake related to (1) improving matching of
               survey and administrative data, (2) improving access to administrative
               data, and (3) improving the quality of employer data.




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                  Appendix IV: Views of GAO’s Expert Panel on
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Need for Better   Panelists said that a significant amount of the needed information about
                  American workers and pension behavior is already being collected in
Matched Data      government and private surveys and government administrative reports.
                  While no one single survey or report collects all the pension information
                  panels expressed interest in, they said that some household surveys could
                  be linked with administrative report data from employers. Specifically,
                  panelists discussed the following:

                  •   The Survey of Income and Program Participation (SIPP) a household survey
                      conducted by the Bureau of the Census, has information on demographic
                      characteristics, labor force participation, and detailed information on income,
                      including some basic pension information. The SIPP does not gather detailed
                      information about the characteristics of these pensions.1
                  •   Summary Plan Descriptions (SPD), prepared by employers as required under
                      ERISA, provide detailed information about the characteristics of the pension
                      plans that they provide to their employees.
                  •   In the past, the Health and Retirement Study (HRS), which is primarily a
                      household survey conducted by the University of Michigan, has matched
                      survey data from households who permitted the Social Security
                      Administration to provide Social Security earnings records and benefit
                      records, the National Death Index, and to Medicare records for those
                      individuals who are Medicare eligible. HRS records also have been matched to
                      SPDs obtained either from Labor or from employers.
                  •   The panelists were interested in the information available from the 1979
                      National Longitudinal Survey, which is sponsored by the Bureau of Labor
                      Statistics and gathers a wide range of information over a long time period.
                      Panelists felt that this information could be potentially be useful because the
                      participants, who initially participated as youth, are now approaching
                      retirement age, which would give researchers access to a lifetime of data.
                  •   In addition to matching currently being done, some panelists said that they
                      were interested in matching existing pension information to other sources of
                      employer information and public financial data, such as information from
                      reports filed with the SEC and available, for example, from Compustat.

                  Limitations on Access to Data

                  Members of our expert panel felt that there are several sources of
                  administrative data that could give researchers valuable information,
                  especially those that could be linked, but legal and logistic restrictions and




                  1
                    While some employee information is gathered from other surveys, the panel felt that the SIPP
                  survey is extremely important for matching to administrative records because it gives
                  demographic and labor force characteristics not available in most administrative record files.




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limitations prevent access to some of this pension data. Specifically,
panelists discussed different types of limitations to access.

Legal Restrictions

•      The Federal Code Title 13, Section 9 sets very specific limitations on the
       access to any data identifying individuals gathered by the Census Bureau and
       any data that are linked to Census data has the Title 13 limitation “attached” to
       it as a result.2
•      Individual records from the IRS have some access restrictions similar to those
       of the Census Bureau except that legislation allows specified agencies access
       to certain tax return records.3
•      As a result of amendments to ERISA legislation SPDs are no longer routinely
       collected by Labor.

Fragmented Retirement Data Responsibilities Contributes to Data
Shortcomings

•      The responsibility for gathering and analyzing pension data is fragmented
       between different government agencies. There is no central agency
       responsible for retirement data – it is fragmented between the Pension Benefit
       Guaranty Corporation, Labor and IRS. As a result, individual agencies do not
       have the incentive to provide access to information or to collect statistics for
       research purposes.
•      While Labor’s regulations specify that employers must supply SPDs if
       requested, it does not specify that employers must have a copy of the SPDs. As
       a result, researchers who request SPDs from employers are frequently told
       that the Plan Administrator has the documents. The Plan Administrators in
       turn tell researchers that they have no authority for providing them to anyone
       except plan participants.
•      Since 1980, OMB’s Office of Information and Regulatory Affairs has provided
       government wide leadership and oversight of efforts to reduce the burden on
       respondents to government information collection, including statistical
       surveys”. This “reduction” effort has meant that some research data previously
       collected in administrative reports has been eliminated.

Other Suggestions for Improving Access to Data

The expert panelists made many suggestions for improving access to
pension data. More specifically, panelists discussed the following:


2
 The newly enacted E-Government Act of 2002 (P.L. 107-347) extended Census type
confidentiality restrictions to all data collected in a federal statistical survey.
3
    See 26 U.S.C. 6103.




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•   It was suggested that agencies with access to data, such as Labor, take
    advantage of improvements in technology to require and provide electronic
    copies of Form 5500s and SPDs.
•   Panel experts suggested that some sort of license be issued for research
    vehicles (such as the SCF, the SIPP and the HRS) to have legal access to
    employer pension information, provided that they take measures to ensure
    confidentiality.4
•   Panelists suggested creating more research data centers to match otherwise
    restricted data, including Census Bureau data. They suggested changing
    legislation so that the Census Bureau’s data would not make everything
    subject to Title 13. The Census Bureau, however, is concerned about possible
    reidentification issues.5
•   Panelists suggested studying more closely the Census Bureau’s results in its
    experimentation with the development of “synthetic data” in the LEHD
    program, a technique in which many relationships between variables are
    maintained in a data set, but in a manner that makes it impossible to identify
    specific individuals.6 Panelists also cautioned, however, that in many cases
    these techniques are not workable and researchers will need access to the
    original survey data.

Restricted Access Sites Have Provided Some Increased
Opportunities for Access to Survey Records and Matched Files

Experts discussed research data centers, operated by several Federal
agencies and private survey organizations, as an effective technique to
make data not available because of confidentiality restrictions more
available to researchers, but with certain restrictions. While the data
centers provide opportunities for conducting research with survey records
or matching records between surveys or with administrative records,
experts said that there are limitations to the data centers, which make data



4
  Unlike the Census Bureau, some agencies, such as the National Center for Education Statistics,
have authority to use a data license procedure. Under these licenses, licensees must submit
detailed research plans, sign disclosure protection agreements, and agree to restrictions similar
to those by the Bureau of the Census at their research data centers. For more detail, see Paul B.
Massell and Laura Zayatz, “Data Licensing Agreements at U.S. Government agencies and
Research Organizations,” presented at the International Conference on Establishment Surveys-II,
Buffalo, N.Y., June 17-21, 2000.
5
Implementation of this suggestion would require changing not only Title 13 but other laws as
well–like the new E-Government Act.
6
 U.S. General Accounting Office, Record Linkage and Privacy: Issues in Creating New Federal
Research and Statistical Information, GAO-01-126SP (Washington, D.C.: April 2001) p. 88 and
Federal Committee on Statistical Methodology, Report On Statistical Disclosure Limitation
Methodology, Statistical Policy Working Paper, 22 (Washington, D.C.: May 1994).




Page 68                                           GAO-03-337   Retirement Income Data
                           Appendix IV: Views of GAO’s Expert Panel on
                           Retirement Income Data Needs




                           much more difficult to access. Specifically, panelists discussed the
                           following:

                           •   Restricted access sites are a useful means of allowing confidential information
                               to be accessed by researchers, subject to certain restrictions.
                           •   A federal storage data center where a number of federal data sets could be
                               brought together could allow agencies to share some otherwise inaccessible
                               information.
                           •   Data centers could aid the work that researchers are doing by storing research
                               already conducted in the data center.
                           •   The Census Bureau, which operates Research Data Centers in eight locations
                               throughout the country, allows researchers with pre-approved projects to use
                               confidential economic and demographic survey data, such as SIPP, for which
                               either no public-use version is available, or the public-use version does not
                               contain the information required by the researcher. While researchers can
                               access these data at the centers, they are not allowed to remove individual
                               records from the data center. This restriction prohibits researchers from
                               matching Census Bureau data with data sets available to researchers, unless
                               those data are imported into the data center.
                           •   BLS has a similar data center located in Washington, D.C. in which data
                               extracted from SPDs collected as part of the National Compensation Survey
                               are stored. As with the Census Bureau centers, there are limitations on who
                               can access this information and restrictions on removing data from the data
                               center.
                           •   Because confidential data cannot be removed from either the BLS or the
                               Census Bureau data centers, it is currently not possible for researchers to
                               match data sets from the two agencies.



More Employer              There was wide agreement on the panel that greater access to employer
                           information was needed to accurately capture the value and provisions of
Information Needed on      employer-provided pensions. More specifically, panelists discussed the
the Value and Provisions   following:
of Employer-Provided       •   Employee-provided information about pensions is not a viable source because
Pensions                       individuals often do not have a good understanding of the value or
                               characteristics of pensions. In addition, agencies expressed concern about the
                               impact of additional questions on nonresponse, and it may be difficult to
                               obtain OMB approval for adding questions to statistical surveys or to
                               administrative reports.
                           •   Valuable information on the value and characteristics of employer pension
                               information is already collected by the Department of Labor on the Form
                               5500s.
                           •   Through the LEHD program, the Census Bureau has been trying to link
                               together employer information with data from surveys.
                           •   Agencies have concerns about maintaining the privacy and confidentiality of
                               data. For example, there was concern that linking SIPP information about



                           Page 69                                       GAO-03-337   Retirement Income Data
Appendix IV: Views of GAO’s Expert Panel on
Retirement Income Data Needs




    individuals with Form 5500 files or summary plan descriptions could facilitate
    the reidentification of individual data reported to the Census Bureau. As a
    result, those linked data would be available only within the data centers.




Page 70                                       GAO-03-337   Retirement Income Data
Appendix IV: Views of GAO’s Expert Panel on
Retirement Income Data Needs




Page 71                                       GAO-03-337   Retirement Income Data
                                               Appendix V: Characteristics of Selected Surveys
Appendix V: Characteristics of Selected Surveysfor Analysis of Retirement Income and Wealth



for Analysis of Retirement Income and Wealth

                                               Below is a table highlighting some of the features of selected surveys
                                               pertinent to the analysis of retirement income and projection of future
                                               retirees’ income.1

Table 3: Summary Table of Selected Survey Data Sources

                Asset and Health
                Dynamics Among the           Consumer              Current                                     Panel Study of   Survey of
                Oldest Old and Health        Expenditure           Population          Employee Benefits       Income           Consumer
                                                                                              a
                and Retirement Study         Survey                Survey              Survey                  Dynamics         Finances
 Unit of        AHEAD: Men and women         Consumer units/       Households          Employer                Head of          Household/
 observation    aged 70 and above in         household                                                         household        primary
                1993-94 and aged 69 –75      members                                                                            economic
                in 1998-99 and spouses                                                                                          unit
                HRS: Men and women
                aged 51-61 in 1992 and
                aged 51 to 56 in 1998-99
                             a
                and spouses
 Cross          Longitudinal                 Cross-sectional       Cross-sectional     Cross-sectional         Longitudinal     Cross-
 sectional or                                                                                                                   sectional
 longitudinal
 Cohorts or     Began in 1992. Planned       Civilian non-         Civilian non-       In even years state &   All              All
 years          to include a new cohort of   institutionalized     institutionalized   local governments &
                                                         b
 covered        people aged 51 to 56         population            population          beginning in 1999,
                every 5 years                                                          private employers
                                                                                       surveyed annually
 Panel period AHEAD: 1993-present            Current ongoing       1942 to present     1997 to present         1968 - present   1983-present
              HRS: 1992-present              survey: 1980-
                                             present




                                               1
                                                AHEAD, HRS, and PSID are conducted by university research entities with support from federal
                                               agencies. The other surveys are conducted by federal government agencies.




                                               Page 72                                            GAO-03-337   Retirement Income Data
                                          Appendix V: Characteristics of Selected Surveys
                                          for Analysis of Retirement Income and Wealth




                                             National                                       National
Survey of Income     National Longitudinal   Longitudinal           National                Longitudinal          National
and Program          Survey of Mature        Survey of Older        Longitudinal Survey     Survey of Young       Longitudinal Survey
Participation        Women                   Men                    of Young Women          Men                   of Youth
Household            Women aged 30-44 in     Men aged 45-60 in      Women aged 14-24        Men aged 14-24 in     Men and women
members              1967 and spouses        1966 and spouses       in 1968 and spouses     1966 and spouses      aged 14-21 in 1979
                                                                                                                  and spouses




Longitudinal         Longitudinal            Longitudinal           Longitudinal            Longitudinal          Longitudinal


All                  Women born 1922 to      Men born 1906 to       Women born 1943 to      Men born 1941 to      Men & women born
                     1937                    1921                   1953                    1952                  1957 to 1964




1981 - present       1967 to present         1966 to 1990           1968 to present         1966 to 1981          1979 to present
New panels approx.
every 3 years




                                          Page 73                                           GAO-03-337     Retirement Income Data
                                               Appendix V: Characteristics of Selected Surveys
                                               for Analysis of Retirement Income and Wealth




                 Asset and Health
                 Dynamics Among the            Consumer           Current                                       Panel Study of   Survey of
                 Oldest Old and Health         Expenditure        Population            Employee Benefits       Income           Consumer
                 and Retirement Study          Survey             Survey                Survey                  Dynamics         Finances
Frequency of     Biennial                      The interview      Monthly for a total   Once in a survey        Annual/          Triennial
interviews                                     survey has a       of 8 months;          period                  biennial
                                               rotating panel     households are
                                               design;            interviewed 4
                                               consumer units     months in a row,
                                               are interviewed    rest for 8 months,
                                               every 3 months     and are
                                               for 5 periods.     interviewed for
                                               The diary          another 4 months
                                               survey also has    (4-8-4 sample
                                               a rotating panel   rotation)
                                               design -
                                               consumer units
                                               keep weekly
                                               diaries.
Over samples     Blacks, Hispanics, and        No                 Hispanics in the      N/A                     Low income       Wealthy
                 Florida residents                                March data                                                     households
                                                                  collection,
                                                                  (includes the
                                                                  March
                                                                  supplement.)
Most recent      22,000 individuals            Interview:         55,000                4,500 establishments    7,406 families   4,500
sample size:                                   30,600             households
                                               Diary: 15,300      interviewed
Administrative   Medicare files, Nat’l Death   None               SSA and IRS           N/A                     None             None
                                                                              c
record           Index, SSA earnings and                          (restricted)
linkages         projected benefits files,
                 Employer Pension Plan
                 SPDs




                                               Page 74                                           GAO-03-337    Retirement Income Data
                                                                        Appendix V: Characteristics of Selected Surveys
                                                                        for Analysis of Retirement Income and Wealth




                                                                               National                                                              National
  Survey of Income                      National Longitudinal                  Longitudinal                      National                            Longitudinal              National
  and Program                           Survey of Mature                       Survey of Older                   Longitudinal Survey                 Survey of Young           Longitudinal Survey
  Participation                         Women                                  Men                               of Young Women                      Men                       of Youth
  Every 4                               Every 1 to 3 years                     Every 1 to 2 years                Every 1 to 3 years                  Every 1 to 2 years        Every year until 1994
  months                                                                       until 1983; then                                                      until 1981                then every 2 years
                                                                               1990                                                                                            beginning in 1996




  Low-income                            Blacks                                 Blacks                            Blacks                              Blacks                    Blacks, Hispanics,
  households for 1990,                                                                                                                                                         and economically
  and 1996 panels, and                                                                                                                                                         disadvantaged
  thereafter


  35,000 households                     5,000                                  5,000                             5,000                               5,000                     9,000
  interviewed

                  d
  SSA & IRS                             Employer pension plan None                                               None                                None                      None
  (restricted)                          SPDs for 1989



Source: GAO analysis of data from University of Michigan’s Institute for Social Research, the Census Bureau, the Bureau of Labor Statistics, and the Federal Reserve Board

                                                                        a
                                                                         The Employee Benefits Survey is now a component of the National Compensation Survey (NCS). It
                                                                        excludes federal, military, agricultural, fishing, forestry, or private household employers.
                                                                        b
                                                                         The total civilian non institutional population of the United States, as well as that portion of the institutional
                                                                        population living in the following group quarters are included in the CEX: Boarding houses; housing facilities
                                                                        for students and workers; staff units in hospitals and homes for the aged, infirm, or needy; permanent living
                                                                        quarters in hotels and motels; and mobile home parks. Excluded are military personnel living on military
                                                                        bases and nursing home residents.
                                                                        c
                                                                        Restricted refers to those persons at the SSA, BLS, and Census Bureau with authority to access these
                                                                        data.
                                                                        d
                                                                            Links with Social Security earnings records and extracts from individuals’ IRS tax returns.




                                                                        Page 75                                                                      GAO-03-337         Retirement Income Data
              Appendix VI: Comments from the Department of
Appendix VI: Comments from the Department of
              Commerce



Commerce




              Page 76                                        GAO-03-337   Retirement Income Data
               Appendix VII: Comments from the Department of
Appendix VII: Comments from the Department of
               Labor



Labor




See p. 23.




               Page 77                                         GAO-03-337   Retirement Income Data
             Appendix VII: Comments from the Department of
             Labor




See p. 23.




             Page 78                                         GAO-03-337   Retirement Income Data
Appendix VII: Comments from the Department of
Labor




Page 79                                         GAO-03-337   Retirement Income Data
                Appendix VII: Comments from the Department of
                Labor




See p. 23-24.




                Page 80                                         GAO-03-337   Retirement Income Data
                        Appendix VIII: GAO Contacts and Staff
Appendix VIII: GAO Contacts and Staff
                        Acknowledgments



Acknowledgments


GAO Contacts            Alicia Puente Cackley (202) 512-7022
                        Benjamin Pfeiffer (206) 287-4832



Staff Acknowledgments   Timothy Fairbanks, Nicholas Larson, Lynn Musser, Emily Pickrell, and
                        Roger Thomas also contributed to this report.




(130117)
                        Page 81                                 GAO-03-337   Retirement Income Data
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