oversight

Federal Retirement: Key Elements Are Included in Agencies' Education Programs

Published by the Government Accountability Office on 1999-03-29.

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

                United States General Accounting Office

GAO             Report to the Honorable Carl Levin
                U.S. Senate



March 1999
                FEDERAL
                RETIREMENT
                Key Elements Are
                Included in Agencies’
                Education Programs




GAO/GGD-99-27
      United States

GAO   General Accounting Office
      Washington, D.C. 20548

      General Government Division



      B-279463

      March 29, 1999

      The Honorable Carl Levin
      United States Senate

      Dear Senator Levin:

      As you requested in your former capacity as Ranking Minority Member of the Subcommittee
      on International Security, Proliferation and Federal Services, Senate Committee on
      Governmental Affairs, this report discusses the retirement education that the Office of
      Personnel Management (OPM) and agencies provide to federal civilian employees covered by
      the Civil Service Retirement System or the Federal Employees’ Retirement System.
      Specifically, it identifies OPM and retirement experts’ views on the key elements of federal
      retirement education programs and describes OPM’s and agencies’ retirement education
      roles, responsibilities, and practices in the context of these recommended elements.

      We are sending copies of this report to the Subcommittee’s Chairman, Senator Thad Cochran,
      and Ranking Minority Member, Senator Daniel K. Akaka; Senator Fred Thompson, Chairman,
      and Senator Joseph I. Lieberman, Ranking Minority Member, Senate Committee on
      Governmental Affairs; Representative Dan Burton, Chairman, and Representative Henry A.
      Waxman, Ranking Minority Member, House Committee on Government Reform; and
      Representative Joe Scarborough, Chairman, and Representative Elijah E. Cummings, Ranking
      Minority Member, Subcommittee on Civil Service, House Committee on Government Reform.
      We are also sending copies to the Honorable Janice R. Lachance, Director, OPM. Copies will
      also be made available to others upon request.

      If you have any questions, please call me on (202) 512-8676. Major contributors to this report
      are listed in appendix III.

      Sincerely yours,



      Michael Brostek
      Associate Director
      Federal Management
        and Workforce Issues




      Page 1                                        GAO/GGD-99-27 Agencies’ Retirement Education Programs
Executive Summary


             Federal employees who are covered by either of the government’s two
Purpose      major retirement programs could retire with dramatically different
             benefits depending on whether and how they plan for retirement
             throughout their careers. Agencies’ retirement education programs play
             an important role in helping federal employees to make well-informed
             retirement planning decisions. However, little is known about how
             agencies fulfill this role. Senator Carl Levin, in his former capacity as
             Ranking Minority Member of the Subcommittee on International Security,
             Proliferation and Federal Services, Senate Committee on Governmental
             Affairs, asked GAO to identify Office of Personnel Management (OPM) and
             retirement experts’ views on the recommended elements of retirement
             education programs and describe OPM’s and agencies’ retirement
             education roles, responsibilities, and practices in the context of these
             elements.

             The Federal Employees’ Retirement System Act of 1986 granted OPM
Background   broad authority to design and implement retirement education programs
             for federal employees covered by the Civil Service Retirement System
             (CSRS) or the Federal Employees’ Retirement System (FERS). The 1986
             Act also created the Federal Retirement Thrift Investment Board to
             administer the Thrift Savings Plan (TSP). The Thrift Board provides
             training and information on TSP; however, it is not responsible for
             providing retirement education for the federal workforce.

             At the beginning of fiscal year 1998, CSRS and FERS covered about 2.7
             million federal employees, including U.S. Postal Service employees. CSRS
             currently consists of an annuity and, as of 1987, TSP. Employees with full
             coverage under CSRS do not receive any government contributions to their
             TSP accounts and are not covered by Social Security. FERS consists of
             Social Security, an annuity that is smaller than that provided under CSRS,
             and TSP with mandatory federal government and voluntary employee
             contributions. In general, FERS covers employees who entered federal
             service after 1983, and CSRS covers employees who entered earlier. As of
             fiscal year 1995, FERS covered slightly more federal employees than CSRS.

             To collect OPM and expert views on the recommended elements—that is,
             the content, presentation formats, and timing—of a retirement education
             program, GAO interviewed OPM officials and consulted with a group of 15
             retirement experts who were experienced with retirement education
             issues. To collect information on OPM’s and agencies’ roles,
             responsibilities, and practices regarding retirement education, GAO
             interviewed officials at OPM and 12 randomly sampled federal agencies




             Page 2                    GAO/GGD-99-27 Agencies’ Retirement Education Programs
                   Executive Summary




                   that had 1,000 or more employees and whose headquarters were within the
                   Washington, D.C., metropolitan area.

                   OPM and the experts with whom GAO consulted held generally consistent
Results in Brief   views regarding the recommended content, presentation formats, and
                   timing of retirement education programs. They believed that these
                   programs should provide employees with information on certain topics, or
                   content such as plan features and financial planning, and that agencies
                   should consider using multiple formats so as to accommodate employees’
                   varying needs. They also believed that such information should be
                   provided early and throughout employees’ careers.

                   OPM provided guidance to agencies on the design and implementation of
                   retirement education programs and supplemented the guidance with
                   educational materials, training, and technical advice for agencies’ benefits
                   staff. Agencies, however, had primary responsibility for designing and
                   implementing their programs according to their agency-specific needs.

                   The retirement education programs of the agencies GAO reviewed
                   generally included those topics recommended by OPM and the experts. In
                   providing retirement education, agencies’ officials said that they made
                   information available on a variety of topics, including the specific features
                   of CSRS and FERS, the requirements for maintaining federal health and
                   life insurance benefits in retirement, and financial planning for retirement.

                   Agencies’ officials told GAO that they used a variety of presentation
                   formats to communicate retirement education to their employees. All of
                   the agencies that GAO reviewed provided employees with written
                   educational materials (sometimes in electronic form) that were
                   supplemented with interactive seminars and one-on-one counseling.
                   Agencies provided retirement planning information, but not advice,
                   regardless of the presentation format used.

                   Agencies’ officials also said that they generally provided retirement
                   education to employees during their initial orientation and throughout
                   their careers. All of the agencies in GAO’s review sponsored seminars
                   designed for those employees who were nearing retirement eligibility.
                   Moreover, some agencies also sponsored additional seminars that were
                   specifically designed for employees who had approximately 15 years of
                   federal service to encourage employees to begin planning for their
                   retirement earlier in their careers. Agencies also provided one-on-one
                   counseling at any time upon request. Agencies believed that retirement
                   education is a shared responsibility between agencies and employees, and



                   Page 3                      GAO/GGD-99-27 Agencies’ Retirement Education Programs
                             Executive Summary




                             that employees must ultimately decide for themselves whether or when to
                             seek retirement information.


GAO’s Analysis
OPM and Experts Had          OPM and the experts with whom GAO consulted recommended that
                             agencies design and implement their retirement education programs so as
Generally Consistent Views   to provide employees with information on certain key topics using
on Program Design            multiple presentation formats early and throughout their careers.
Dimensions                   Agencies’ programs, including the support provided to agencies by OPM,
                             were generally consistent with these recommendations.

OPM Provided Guidance        As part of its governmentwide responsibility and oversight for federal
                             retirement systems and related benefits administration functions, OPM
and Support to Agencies in   provided general guidance to agencies that included recommendations on
Designing and                the content, presentation formats, and timing included in their retirement
Implementing Their           education programs. OPM also issued educational materials for agencies’
Programs                     personnel offices as well as employees, sponsored training for agencies’
                             benefits staff, and provided agencies with technical support to resolve
                             case-specific issues. Agencies, however, had the primary responsibility for
                             designing and implementing their retirement education programs.

Agencies Generally           Agencies reviewed by GAO generally included information in their
                             retirement education programs that was consistent with those topics that
Included Content             OPM and the experts recommended. Specifically, agencies’ officials told
Recommended by OPM and       GAO that they provided descriptive information on the features of CSRS
Experts                      and FERS, the steps that employees must take to continue their health and
                             life insurance benefits into retirement, and financial planning tools and
                             information that employees could use to actively plan for their retirement.
                             Agencies also provided information on how the annuity; TSP; and, for
                             FERS, Social Security components of employees’ retirement programs
                             were integrated to provide retirement benefits.

Agencies Used Multiple       Agencies’ officials said that they used a variety of presentation formats to
                             communicate retirement education information to their employees. For
Presentation Formats         example, all of the agencies used written materials that were
                             supplemented by seminars and one-on-one counseling. Agencies reviewed
                             by GAO commonly distributed materials developed by OPM or the Thrift
                             Board, and they generally contracted out for seminars; however, they
                             relied on agencies’ staff to provide one-on-one counseling to employees.
                             Some agencies also adopted more centralized and/or automated methods
                             of providing retirement education to improve the consistency and
                             availability of information and use resources more efficiently.



                             Page 4                     GAO/GGD-99-27 Agencies’ Retirement Education Programs
                             Executive Summary




Agencies Provided            Agencies’ officials also told GAO that they generally provided retirement
                             education to employees during their initial orientation and throughout
Retirement Education Early   their careers. Agencies that GAO reviewed continuously provided written
and Throughout Employees’    publications to employees by establishing self-serve libraries or making
Careers                      information electronically available on Internet Web sites. All of the
                             agencies sponsored seminars that were designed for those employees who
                             were within approximately 5 years of retirement eligibility. To encourage
                             or enable employees to begin planning for retirement earlier in their
                             careers, many of the agencies either allowed employees with less service
                             to attend these preretirement seminars or sponsored additional seminars
                             that were specifically designed for midcareer employees who had
                             approximately 15 years of federal service. Agencies also provided one-on-
                             one counseling to employees at any time upon request. Agencies’ officials
                             told GAO they believed that retirement education is a shared responsibility
                             between agencies and employees. That is, agencies were responsible for
                             making information readily available; however, employees were
                             responsible for determining for themselves when and how often to seek
                             retirement information.

                             GAO is making no recommendations in this report.
Recommendations

                             OPM and Commerce provided written comments on a draft of this report,
Agency Comments              and the Department of Defense and Internal Revenue Service (IRS)
                             provided oral comments. Each agency agreed with the report’s contents.
                             OPM added that it is working continually to improve the quality and
                             comprehensiveness of the benefits information that employees receive,
                             and that GAO’s findings will be very useful in enhancing the products and
                             services OPM makes available to agencies. OPM’s and IRS’ additional
                             comments are at the ends of chapters 2 and 3. The other agencies
                             reviewed told GAO that they had no comments on the draft report.




                             Page 5                     GAO/GGD-99-27 Agencies’ Retirement Education Programs
Contents



Executive Summary                                                                                  2


Chapter 1                                                                                          8
                       Background                                                                  8
Introduction           Objectives, Scope, and Methodology                                          9


Chapter 2                                                                                         13
                       OPM’s Views Regarding Program Design and                                   15
OPM's and Experts'       Implementation
Recommendations for    Experts’ Views Regarding Program Design                                    16
                       Agency Comments                                                            20
Federal Retirement
Education Programs
Chapter 3                                                                                         21
                       OPM Provided Retirement Education to Agencies and                          21
Retirement Education     Employees
Programs Generally     Agencies’ Retirement Education Programs Generally                          21
                         Included Information Recommended by OPM and
Included OPM's and       Experts
Experts'               Agencies’ Retirement Education Programs Included a                         21
                         Variety of Presentation Formats
Recommendations        Agencies Made Retirement Education Available                               21
                         Throughout Employees’ Careers
                       Agency Comments                                                            21


Appendixes             Appendix I: Retirement Expert Biographies                                  28
                       Appendix II: Comments From the Office of Personnel                         31
                         Management
                       Appendix III: Major Contributors to This Report                            32


Tables                 Table 2.1: OPM’s and Experts’ Views on Recommended                         14
                         Timing and Content for a Retirement Education
                         Program




                       Page 6                   GAO/GGD-99-27 Agencies’ Retirement Education Programs
Contents




Abbreviations

AARP            American Association of Retired Persons
CFP             certified financial planner
COLA            cost-of-living adjustment
CPDF            Civilian Personnel Data File
CPP             chartered pension professional
CSRS            Civil Service Retirement System
DOD             Department of Defense
EBRI            Employee Benefit Research Institute
FERS            Federal Employees' Retirement System
FERSA           Federal Employees' Retirement System Act of 1986
HRSA            Health Resources and Services Administration
HUD             Department of Housing and Urban Development
IRS             Internal Revenue Service
NOAA            National Oceanic and Atmospheric Administration
OPM             Office of Personnel Management
TIAA-CREF       Teachers Insurance and Annuity Association, College Retirement
Equities Fund
TSP             Thrift Savings Plan
UFCW            United Food and Commercial Workers International Union
VHA             Veterans Health Administration
VA              Department of Veterans Affairs


Page 7                        GAO/GGD-99-27 Agencies’ Retirement Education Programs
Chapter 1

Introduction


               As federal employees plan for their eventual retirement from government
Background     service, they often consider many financial and lifestyle issues. Agency-
               provided retirement education is generally the primary source of the
               information that employees need to plan for these issues before they
               retire. Retirement benefits represent an important portion of total federal
               compensation and employees often cite these benefits as a primary reason
               for staying in government service. Thus, agencies also benefit from
               sponsoring retirement education programs, which allow them to capitalize
               on their comparative advantage in competitive labor markets as well as
               invest in the government's human capital.

               The Federal Employees’ Retirement System Act of 1986 (FERSA) granted
               the Office of Personnel Management (OPM) and federal agencies broad
               authority to design and implement retirement education programs for
               employees covered by the two largest federal civilian retirement
               programs—the Civil Service Retirement System (CSRS) and the Federal
                                                        1
               Employees’ Retirement System (FERS). Specifically, FERSA authorizes
               agencies to designate retirement counselors who are responsible for
               providing employees with benefits information, and mandates that OPM
                                                                                   2
               establish a training program for these agency retirement counselors.
               FERSA also created the Federal Retirement Thrift Investment Board to
               administer the Thrift Savings Plan (TSP). The Thrift Board provides
               training and information on TSP to agency personnel offices and groups of
               employees upon agency request; however, it is not responsible for
               providing retirement education for the federal workforce.

               CSRS, which was established in 1920, currently includes an annuity and
                    3
               TSP. CSRS’ annuity predates the Social Security system by several years.
               When the Social Security system was established, Congress decided that
               employees in CSRS would not be covered by Social Security through their
               federal employment. Starting in 1987, employees covered by CSRS may
               also contribute up to 5 percent of their salary to TSP; however, they
               receive no government contributions. CSRS was closed to new entrants
               after December 31, 1983, and, according to OPM actuaries, is estimated to
               end in about 2070, when all covered employees and survivor annuitants are
               expected to have died.

               1
                Approximately 7 percent of federal employees are covered by specialized retirement programs, such
               as the foreign service or judicial retirement systems.
               2
               Agencies generally referred to retirement counselors and other retirement education staff as benefits
               officers.
               3
                Employees covered by CSRS may also contribute to a separate voluntary contribution program, which
               can be withdrawn with interest or used to purchase additional annuity upon retirement.




               Page 8                               GAO/GGD-99-27 Agencies’ Retirement Education Programs
                           Chapter 1
                           Introduction




                           FERS was implemented in 1987 and generally covers those employees who
                           first entered federal service after 1983. The primary impetus for the new
                           program was the Social Security amendments of 1983, which required all
                           federal employees hired after December 1983 to be covered by Social
                           Security. Thus, FERS includes Social Security, an annuity that is smaller
                           than that provided under CSRS, and TSP. The government automatically
                           contributes an amount equal to 1 percent of salary to TSP accounts for all
                           employees covered by FERS, regardless of whether those employees make
                           any voluntary contributions to their accounts. In addition, employees
                           covered by FERS may contribute up to 10 percent of their salaries, up to
                           the current legal maximum of $10,000, and receive government matching
                                                                 4
                           contributions on the first 5 percent.

                           At the beginning of fiscal year 1998, CSRS and FERS covered about 2.7
                           million employees, or 93 percent of the civilian workforce, including U.S.
                           Postal Service employees. As of fiscal year 1995, FERS covered slightly
                           more federal employees than CSRS.

                           In response to the request of Senator Carl Levin, in his former capacity as
Objectives, Scope, and     Ranking Minority Member of the Subcommittee on International Security,
Methodology                Proliferation and Federal Services, Senate Committee on Governmental
                           Affairs, our objectives in preparing this report were to provide information
                           on

                         • what OPM officials and retirement experts view as the recommended
                           content, presentation formats, and timing of retirement education
                           programs and
                         • OPM’s and agencies’ retirement education roles, responsibilities, and
                           practices in the context of these recommendations.

                           Because of time and resource constraints, we limited the scope of our
                           review to the education provided to employees covered by CSRS and
                           FERS, who represent the majority of federal civilian employees.

                           To identify OPM’s views on the recommended content, presentation
                           formats, and timing of a retirement education program, we interviewed
                           OPM officials and reviewed OPM’s published guidance on how agencies
                           are to design and implement federal retirement education programs. To
                           identify retirement experts’ views, we interviewed a judgmentally selected
                           4
                            For the first 3 percent of salary that an employee covered by FERS may contribute, the government
                           contributes $1.00 for each $1.00 the employee contributes. For the next 2 percent of salary, the
                           government contributes $0.50 for each $1.00 the employee contributes. For the next 5 percent of
                           salary that an employee may contribute, the government contributes nothing.




                           Page 9                              GAO/GGD-99-27 Agencies’ Retirement Education Programs
Chapter 1
Introduction




group of 15 retirement experts using a structured interview that had been
pretested and provided in advance. The experts also responded to a close-
ended questionnaire. We used a summary of the experts’ responses as our
principal basis for identifying the recommended content, presentation
formats, and timing of a retirement education program. In summarizing
the experts’ responses to the close-ended questionnaire, we used a super-
majority criterion (i.e., agreement on the part of 10 or more experts) to
classify a list of 21 potential topics, or content, as (1) essential; (2)
recommended, but not essential; or (3) optional. Specifically, we
identified a topic as “essential” when 10 or more experts responded that
the topic was essential. If the topic did not meet the criterion for being
essential, we identified it as “recommended” when 10 or more experts
responded that the topic was either essential or recommended. Similarly,
if the topic did not meet the criteria for being essential or recommended,
we identified it as “optional” when 10 or more experts responded that the
topic was essential, recommended, or optional.

To identify candidates who had the appropriate background and
experience to serve as retirement experts, we solicited and received
nominations from the following eight associations and organizations that
specialize in retirement and/or financial planning issues: the American
Association of Retired Persons, the Employee Benefit Research Institute,
the International Association for Financial Planning, the International
Foundation of Employee Benefit Plans, the National Association of State
Retirement Administrators, the National Conference of Public Employee
Retirement Systems, the Pension Research Council, and the Teachers
Insurance and Annuity Association.

For each candidate nominated, we reviewed the biographical information
provided by the nominating organization(s). We selected 16 individuals
who each had extensive experience with pension or retirement issues and
specific expertise on retirement education. The selected experts
collectively represented a breadth of professional backgrounds in both the
public and private sectors, including academics, unions, financial planning,
pension administration, advocacy, financial services, and human resource
management consulting. We invited each of the selected candidates to
share their views on retirement education, and 15 agreed to do so.
Appendix I provides more information on the experts with whom we
consulted.

To identify OPM’s and agencies’ retirement education roles,
responsibilities, and practices in the context of the recommendations on
program content, presentation formats, and timing, we interviewed



Page 10                    GAO/GGD-99-27 Agencies’ Retirement Education Programs
Chapter 1
Introduction




officials representing OPM, the Thrift Board, and 12 randomly selected
federal agencies that had 1,000 or more employees and whose
headquarters were located within the Washington, D.C., metropolitan area.
We used a structured interview that had been pretested and provided to
the 12 agencies in advance. We also analyzed documents and data
provided by the agencies’ officials. We used a summary of the agencies’
practices as the principal basis for comparing the actual practices of the 12
agencies with the recommended content, presentation formats, and timing
identified by OPM officials and the experts. We did not independently
verify agencies’ responses regarding the specifics of the content,
performance formats, and timing of their retirement education programs.
Thus, although we used terms such as “provided” and “sponsored” to
describe agencies’ practices, we were generally referring to what agencies
told us they did.

To develop the sample of agencies for our review, we used information
from the spring 1997 Central Personnel Data File (CPDF)—an automated
information system that contains individual records for most federal
civilian employees and is maintained by OPM. The list of agencies used in
selecting this sample included 68 organizations that represented a total of
1,682,391 federal employees who were covered by CSRS or FERS. We
stratified the 68 organizations according to size (1,000 to 9,999 employees;
10,000 to 99,999 employees; and 100,000 or more employees) and randomly
selected 4 agencies from each group. For the Department of Defense
(DOD), our list of 68 organizations included only the Departments of the
Army, Air Force, and Navy.

On this basis, we selected the following 12 agencies for review: the
International Trade Administration and National Oceanic and Atmospheric
Administration (NOAA) of the Department of Commerce; the Bureau of
Reclamation of the Department of the Interior; the Internal Revenue
Service (IRS), U.S. Customs Service, and U.S. Secret Service of the
Department of the Treasury; the Health Resources and Services
Administration (HRSA) and the National Institutes of Health of the
Department of Health and Human Services (HHS); the Department of
Housing and Urban Development (HUD); the Veterans Health
Administration (VHA) of the Department of Veterans Affairs (VA); and the
Departments of the Navy and Air Force of DOD. The sampled agencies
employed about 42 percent of the employees covered by CSRS or FERS
from our sampling universe.

As agreed, our analysis did not address the effectiveness of OPM's
administration of federal retirement education, agencies’ programs, or the



Page 11                    GAO/GGD-99-27 Agencies’ Retirement Education Programs
Chapter 1
Introduction




retirement education that individual federal employees might receive.
Also, we did not attempt to independently validate the information
provided to us by OPM and the 12 agencies. Although we audited the
reliability of CPDF data for fiscal year 1996 and found it sufficiently
                                                                          5
reliable for most governmentwide analyses, we did not update that audit.
However, we are not aware of changes in the way that agencies submit or
OPM processes CPDF data that would materially affect the reliability of
the data. We used a random sample to have an objective, unbiased sample.
However, as a consequence of our small sample size, the retirement
education practices described in this report are not generalizable to all
agencies that employ 1,000 or more employees and have headquarters in
the Washington, D.C., metropolitan area. We are reporting solely on the
practices of those agencies we surveyed.

We did our review in Washington, D.C., from January 1998 to February
1999 in accordance with generally accepted government auditing
standards.

We requested comments on a draft of this report from the Director of
OPM; the Secretaries of the Department of Commerce, DOD, HHS, HUD,
the Interior, the Treasury, and VA; the Commissioner of Internal Revenue;
or their designees. OPM and Commerce provided written comments.
DOD’s and IRS’ comments were provided orally by the audit liaison and
legislative affairs officer, respectively. These agencies’ comments are
presented at the ends of chapters 2 and 3, and OPM’s written comments
are reprinted in appendix II. HHS, HUD, the Interior, the Treasury’s
Customs Service and Secret Service, and VA said they had no comments
on the draft report.




5
See OPM’s Central Personnel Data File: Data Appear Sufficiently Reliable to Meet Most Customer
Needs (GAO/GGD-98-199, Sept. 30, 1998).




Page 12                            GAO/GGD-99-27 Agencies’ Retirement Education Programs
Chapter 2

OPM's and Experts' Recommendations for
Federal Retirement Education Programs

              OPM and the experts with whom we consulted held generally consistent
              views regarding the recommended content, presentation formats, and
              timing of retirement education programs. OPM provided guidance to
              federal agencies on CSRS and FERS administration in its CSRS and FERS
              Handbook for Personnel and Payroll Offices, benefits administration
              letters, and other advisory documents. OPM’s guidance presented various
              recommendations regarding the design and implementation of agency
                                              1
              retirement education programs. The retirement experts with whom we
              consulted also provided recommendations regarding the content,
                                                                                 2
              presentation formats, and timing of a retirement education program.

              Although the terminology used by OPM and the experts was not identical,
              we considered the substance of their recommendations regarding content,
              presentation formats, and timing to be generally consistent. For example,
              OPM and the experts agreed that new employees need basic information
              on their retirement system’s characteristics, all employees need financial
              planning information on a periodic basis during their careers, and
              employees nearing retirement need transition planning information. Table
              2.1 summarizes OPM’s and the experts’ views regarding the content and
              timing of agency-provided retirement education programs.




              1
              See CSRS and FERS Handbook for Personnel and Payroll Offices, Chapter 1: Administration and
              General Provisions, Chapter 40: Planning and Applying for Retirement, and Chapter 83: Self-Evaluation
              Guide for Agency Administration of Employee Benefits Programs.
              2
               The experts with whom we consulted told us that their recommendations apply equally to public and
              private sector employers and employees. We did not ask the experts to evaluate or comment on
              agencies’ specific retirement education practices.




              Page 13                             GAO/GGD-99-27 Agencies’ Retirement Education Programs
                                           Chapter 2
                                           OPM's and Experts' Recommendations for Federal Retirement Education Programs




Table 2.1: OPM’s and Experts’ Views on Recommended Timing and Content for a Retirement Education Program
                                                          OPM                               Retirement Experts
                                                                                        a
Early career                     Plan type                                   Plan type
                                                                                                                     a
                                 Eligibility requirements                    Participation and vesting requirements
                                                                                                                 a
                                 Employee and agency contributions           Employee and agency contributions
                                                                    b                                               a
                                 Voluntary contribution program              Investment alternatives and strategies
                                                             b                                   a
                                 TSP withdrawal options                      Debt management
                                                                                                               a
                                 Military or prior civilian service deposits Disability and survivor insurance
                                 Designating a beneficiary
                                                     b                                          a
Ongoing education                Financial planning                                    Plan type
                                                                                                                              a
                                 Annual individual benefits statements                 Participation and vesting requirements
                                                                                                                           a
                                 Periodic updates about changes to benefits            Employee and agency contributions
                                 Military and civilian service deposits                Estimated assets needed to retire
                                                                                                                             a
                                 Effect of divorce or separation agreements            Investment alternatives and strategies
                                                                  b                                        a
                                 Voluntary contribution program                        Debt management
                                                                                 b
                                 Retention of health and life insurance benefits       Tax considerations
                                                                                       Projected benefit amounts and cost-of-living
                                                                                       adjustments (COLA)
                                                                                       Minimum voluntary retirement dates
                                                                                                                         a
                                                                                       Disability and survivor insurance
                                                                                       Social Security and Medicare

Preretirement
                                                     b
  5 years before eligibility     Financial planning                                    New career/Working part-time in retirement
                                                                                 b
                                 Retention of health and life insurance benefits       Considering/Planning for relocation
                                                                                   b
                                 Effects of deposits/redeposits on service credit      Planning for increased leisure time
                                 Social Security coverage
  1 year before eligibility      Meeting age and service requirements
                                 Survivor benefit considerations
                                                                 b
                                 Voluntary contribution program
                                 Annuity estimates
                                 COLAs
                                                         b
                                 TSP withdrawal options
                                                                                   b
                                 Effects of deposits/redeposits on service credit
  6 months before retirement     Resolving financial indebtedness to the agency
                                 Deciding whether to wave military retired pay
                                 Maximum annuity amounts
                                 Medicare eligibility

No consensus on timing                                                                 Retention of health/life insurance benefits
                                                                                       Medigap/Long-term care insurance
                                                                                       Early/Deferred retirement options
                                                                                       Withdrawal options
                                                                                       Inheritance planning
                                                                                       Deciding when or whether to retire
                                                                                       Health maintenance




                                           Page 14                             GAO/GGD-99-27 Agencies’ Retirement Education Programs
                               Chapter 2
                               OPM's and Experts' Recommendations for Federal Retirement Education Programs




                               Note: GAO's characterization of OPM's and the experts' views was not intended to be exhaustive,
                               thus the reader should not interpret the absence of a topic in one column to mean that OPM and the
                               experts disagreed on the importance of that topic.
                               a
                               The experts recommended that this topic be covered at multiple points in employees’ careers.
                               b
                                   OPM recommended that this topic be covered at multiple points in employees’ careers.
                               Source: GAO analysis of data obtained from OPM and retirement experts.


                               OPM’s views regarding the design and implementation of agencies’
OPM’s Views                    retirement education programs were reflected in the guidance and support
Regarding Program              it provided to agencies. While allowing agencies to exercise broad
Design and                     flexibility in designing and implementing their retirement education
                               programs, OPM recommended that agencies include certain key topics or
Implementation                 content, present information through various formats, and educate
                               employees throughout their careers. The CSRS and FERS Handbook
                               served as the principal vehicle for communicating OPM’s guidance, and
                               OPM updated that guidance on a periodic basis through handbook
                               revisions and benefits administration letters sent directly to the agencies.

OPM Recommended That           OPM’s guidance recommended that federal agencies consider including
                               certain content as part of their retirement education programs. OPM’s
Agencies Include Certain       recommendations were not intended to be exhaustive and agencies were
Topics in Their Retirement     not required to include them in their retirement education programs.
Education Programs             OPM’s recommended topics included the following:

                             • plan type, including whether an employee is covered by CSRS or FERS;
                             • eligibility, including minimum age and service requirements for employees
                               to (1) participate in the plan and (2) retire with full benefits;
                             • employer and employee contributions allowed or required under CSRS or
                               FERS;
                             • voluntary contribution program;
                             • financial planning, including various investment strategies;
                             • military or prior civilian service deposits, including whether an employee
                               has prior service for which a deposit or redeposit is owed and the effects
                               of payment or nonpayment on an annuity;
                             • TSP withdrawal options, including when a retiree may begin withdrawing
                               TSP savings as well as the monetary advantages and tax effects of the
                               various withdrawal options;
                             • annuity estimates;
                             • divorce or separation, including the potential effect of divorce or
                               separation agreements on retirement benefits;
                             • designating a beneficiary, including the cost and amount of survivor
                               benefits as well as spousal eligibility for benefits;
                             • retaining health and life insurance benefits in retirement;




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                            • cost-of-living adjustments (COLA), including how retirement benefits will
                              be adjusted periodically for inflation depending on CSRS or FERS
                              coverage; and
                            • Social Security and Medicare, including whether employees are covered by
                              these programs and how the programs integrate with their other benefits.

OPM Recommended That          OPM recommended that agencies include written, interactive, and
                              electronic formats as part of their retirement education programs. For
Agencies Use Multiple         example, OPM recommended that agencies use formats such as pamphlets
Formats in Their Programs     and brochures, periodic workshops and seminars, Intranet/Internet Web
                              sites, and recorded telephonic information in their retirement education
                              programs. According to OPM, agencies that use multiple educational
                              formats are likely to increase the number of employees that they reach
                              through their retirement education program.

OPM Recommended That          OPM recommended that agencies provide employees with retirement
                              information at various stages of their career, including: early career, 5
Retirement Education Be       years before retirement eligibility, 1 year before retirement eligibility, 6
Provided Throughout                                                                         3
                              months before retirement, and 2 months before retirement. OPM also
Employees’ Careers            recommended that agencies cover certain topics with employees
                              throughout their careers and periodically update information about any
                              changes occurring to federal retirement programs or benefits. Table 2.1
                              summarizes OPM’s recommendations on when agencies may wish to
                              introduce topics to employees.

                              OPM recommended that agencies identify and invite employees to attend a
                              preretirement seminar within about 5 years before their retirement
                              eligibility and about 1 year before their actual planned retirement.
                              Moreover, OPM believed that agencies should contact employees within 1
                              year of retirement eligibility and offer those employees one-on-one
                              counseling.

                              Consistent with OPM’s guidance, the retirement experts with whom we
Experts’ Views                consulted recommended specific content, presentation formats, and timing
Regarding Program             that they considered essential for a retirement education program.
Design



                              3
                               OPM’s guidance regarding the retirement education recommended for employees within 2 months of
                              retirement was focused on procedural guidelines rather than content, presentation formats, and timing.




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Experts Regarded Certain        A super majority (at least 10 of 15) of the experts considered 13 topics to
                                be essential to a retirement education program, while they identified 6
Topics as Essential Content     topics as recommended, but not essential, and 2 topics as optional.
for a Retirement Education
Program                         The experts identified the following 13 topics as being essential to a
                                retirement education program:

                              • plan type, including whether an employee is covered by CSRS or FERS;
                              • participation and vesting requirements, or the amount of time that
                                employees must work before they are eligible to (1) contribute to and (2)
                                own, or become “vested” in, accrued benefits of their plan;
                              • employer and employee contributions that are allowed and/or required;
                              • estimated assets needed to retire that reflect individual employee’s desired
                                retirement date, income level, and lifestyle;
                              • investment alternatives and strategies, including information on the
                                association between investment risk and return, the benefits of saving
                                earlier rather than later, and the importance of diversification across
                                different types of investment vehicles;
                              • debt management that provides employees with information on how to
                                manage limited resources efficiently and enhance their ability to save;
                              • tax considerations, including the benefits of saving with pretax versus
                                after-tax dollars;
                              • retention of agency-provided health and life insurance benefits;
                              • minimum voluntary retirement dates;
                              • projected benefit amounts and COLA’s;
                              • disability and survivor insurance, including how these programs are
                                integrated with their other retirement benefits and any associated costs to
                                employees;
                              • Social Security and Medicare, including whether employees are covered by
                                these programs, how the programs are integrated with their other
                                retirement benefits, and any associated costs to employees; and
                              • Medigap and long-term care insurance, that is, insurance designed to
                                provide coverage for medical costs not covered by Medicare or other
                                federal health insurance.

                                The experts also identified the following six topics as recommended, but
                                not essential, for a retirement education program:

                              • health maintenance, both before and after retirement;
                              • early or deferred retirement options, including circumstances under which
                                employees would be eligible to receive reduced retirement benefits




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                                   (1) earlier than the minimum voluntary retirement date or (2) later than
                                   the time of actual separation from an agency;
                               •   deciding when and whether to retire;
                               •   withdrawal options, such as taking accrued benefits as an annuity versus
                                   as a lump-sum payment;
                               •   postretirement employment, including information on starting a new
                                   career or working part-time; and
                               •   inheritance planning, including the preparation of wills and other methods
                                   of transferring estates to survivors.

                                   Finally, the experts identified the following two topics as optional
                                   components of a retirement education program:

                               • relocation, including whether and where employees might wish to relocate
                                 in retirement, and
                               • planning for increased leisure time.

Experts Recommended                The experts believed that agencies should avail themselves of a broad
                                   range of presentation formats in their retirement education programs. For
That Agencies Use Multiple         example, agencies could distribute written guidance, such as brochures
and Interactive Presentation       and newsletters; present information more interactively by sponsoring
Formats                            seminars, workshops, or one-on-one counseling sessions; and/or provide
                                   information upon request by establishing electronic systems, such as
                                   Intranet/Internet Web sites and recorded telephonic response systems.
                                   The experts believed that each presentation format has its advantages and
                                   disadvantages. Moreover, no one format would be optimal for
                                   communicating with all employees, because individual learning styles vary.

                                   The experts also believed that each individual employee’s need for
                                   information on a specific retirement education topic at any given point in
                                   their career is influenced by multiple demographic factors, including their
                                   age, marital status, knowledge of financial planning concepts, years until
                                   they are eligible or plan to retire, and health status. Thus, agencies are
                                   challenged with designing a retirement education program that can meet
                                   the needs of all their employees over their entire careers. The experts
                                   recommended that agencies focus on their employees’ needs when
                                   selecting which presentation formats to include in their programs.

                                   To address individual employee learning styles and content needs, the
                                   experts recommended that agencies design their retirement education
                                   programs to include multiple and interactive formats to the extent
                                   possible. Specifically, they viewed one-on-one counseling and seminars as
                                   the optimal methods of presenting retirement education. Although these



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                             options represent the most costly methods of providing such information,
                             the experts told us that both formats allow agencies to expose employees
                             to a broad range of topics that employees then can pursue further on an as-
                             needed basis. Moreover, employees benefit from being able to get direct
                             and immediate responses to any questions they may have. The experts
                             told us that one-on-one counseling represents the most customized source
                             of information for employees; however, seminars allow for group
                             interactions that may enrich the information available to employees.

                             To better meet the individual content needs of different employees, the
                             experts recommended that agencies choosing to use seminars or
                             workshops should do so by offering customized sessions for specific
                             groups, or segments, of their workforce. For example, agencies might
                             provide seminars that are targeted to employees at different career stages,
                             such as early career, midcareer, and preretirement. Agencies then could
                             target their content to include those topics that are most relevant to the
                             attending group of employees. This approach would also provide
                             employees with the opportunity to attend seminars periodically
                             throughout their careers.

                             The experts told us that written materials also play an important role in
                             retirement education. These materials, which can be provided in paper or
                             on electronic Web sites, allow agencies to provide consistent and detailed
                             information to all employees in a cost-efficient way. Employees can use
                             such reference materials as often as they like and at their convenience.
                             However, many of the experts with whom we consulted did not
                             recommend that agencies rely on written materials as their primary
                             presentation format because employees may too readily ignore, file, or
                             throw away such materials. In particular, the experts said that younger
                             employees may regard information on retirement planning as something to
                             which they need not devote much attention.

Experts Recommended          The experts recommended that agencies introduce many of the topics
                             identified as essential early within employees’ careers. The experts also
That Agencies Introduce      recommended that agencies update their employees on this information on
Retirement Education Early   a regular basis throughout their careers—approximately once every 1 to 5
and Often in Employees’      years. The table at the beginning of this chapter (see table 2.1)
Careers                      summarizes the experts’ recommendations regarding the content that
                             agencies may wish to present at various times in employees’ careers.

                             The experts recommended that agencies introduce basic plan information
                             to employees within their first year of employment. Additionally, the
                             experts recommended that agencies update employees regularly (i.e.,



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                  continuously or at least once a year) on many of the topics that the experts
                  identified as essential, recommended, or optional after the topics have first
                  been introduced. The experts also recommended that agencies introduce
                  information on minimum retirement dates to employees more than 5 years
                  before they are eligible for full retirement benefits and information on
                  postretirement employment, relocation, and planning for increased leisure
                  time late in employees’ careers.

                  The experts told us that all employees need information early and often
                  during their careers, regardless of whether they are covered by CSRS or
                  FERS. However, the focus or content of agency-provided information to
                  employees may need to be tailored to address the unique aspects of each
                  retirement system. For example, the experts told us that it is particularly
                  important for employees covered by FERS to understand the level of
                  allowed contributions to their TSP accounts, the amounts of agency
                  matching contributions that are available, the risk and investment returns
                  associated with each available investment alternative, and the benefits
                  generally associated with beginning to contribute to TSP early in one’s
                  career. While employees’ decisions have a limited impact on the amount
                  of their future annuities from CSRS and FERS, employees may benefit
                  from receiving information early in their careers on such topics as the
                  future projected value of their annuities, vesting requirements, and
                  available withdrawal options. Employee decisions made with or without
                  information on such topics could affect the amount of an employee’s
                  future retirement benefits.

                  OPM, Commerce, DOD, and IRS agreed with our findings. In its written
Agency Comments   comments (see app. II), OPM added that it was gratified that there is
                  agreement among our retirement experts, OPM, and agencies on the
                  makeup of retirement education programs. OPM said it was working
                  continually to improve the quality and comprehensiveness of benefits
                  information employees receive and that our findings would be very useful
                  in its efforts to enhance the products and services it makes available to
                  agencies. IRS similarly indicated agreement with OPM’s and our experts’
                  recommendations and said that it would consider them in contemplating
                  whether improvements could be made regarding the education provided
                  early within employees’ careers.




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Chapter 3

Retirement Education Programs Generally
Included OPM's and Experts'
Recommendations
                       OPM and the agencies we surveyed both played a role in providing
                       retirement education to federal employees covered by CSRS and FERS. As
                       part of its governmentwide responsibility for federal retirement systems,
                       OPM supplemented the guidance it provided to agencies on the design and
                       implementation of retirement education programs by developing
                       educational materials, sponsoring training, and providing technical advice
                       to agencies’ benefits personnel.

                       Agencies, which had primary responsibility for developing retirement
                       education programs, generally provided information to employees on
                       topics such as the basic features of CSRS and FERS and financial planning
                       issues for retirement, which were recommended by OPM and the
                       retirement experts with whom we consulted. The agencies distributed this
                       information to employees using a variety of written, interactive, and
                       electronic presentation formats that were available throughout employees’
                       careers, also as recommended by OPM and the experts.

                       In addition to providing agencies with guidance on how to design and
OPM Provided           implement their retirement education programs (see ch. 2), OPM also
Retirement Education   provided educational materials and other support to agencies’ benefits
to Agencies and        officers and federal employees. Specifically, OPM developed educational
                       materials that updated agencies on any changes in the law or regulations
Employees              affecting retirement programs and that agencies could distribute directly
                       to federal employees as part of their programs. OPM also supported
                       agencies by sponsoring training and providing technical assistance to
                       resolve case-specific issues for benefits staff.

                       OPM published retirement education materials that agencies could
                       distribute to federal employees or use as guidance in developing their own
                       customized program materials. These materials included brochures and
                       pamphlets as well as videos and CD-ROM programs that provided detailed
                       information on federal retirement programs, such as retirement eligibility
                       requirements, annuity formulas, TSP contribution limits, requirements for
                       maintaining health and life insurance in retirement, and survivor benefits.
                       Agencies and employees could also access OPM’s Web site for retirement
                       information and links to other related Web sites, such as the Thrift Board’s
                       site for TSP participants.

                       Although OPM indicated in its guidance that supplying retirement
                       education to employees is primarily an agency role, officials told us that
                       they supported agencies’ efforts in these ways to help agencies cope with
                       increased workloads and to allow agencies’ staff to devote more time to
                       such activities as providing one-on-one counseling. For example, during



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the 1998 open season, when employees covered by CSRS could elect to
transfer to FERS, OPM provided agencies with detailed information on the
specifics of each retirement program, frequently asked questions and
answers for individuals considering whether to transfer to FERS, and a
computer model that allowed agencies to project what an individual’s
benefits might be, given different scenarios.

Consistent with statutory requirements, OPM also supported agencies’
retirement education programs by providing training for benefits officers
on a periodic basis. Specifically, OPM sponsored quarterly meetings of the
interagency network for retirement and insurance, an annual Fall Festival
of Training, an annual benefits officer conference, and other training
courses on an as-needed basis throughout the year, all of which provided
agencies’ personnel with both training and networking opportunities.

In support of agencies’ retirement counseling services, OPM provided
expert advice and assistance on specific technical issues or cases. OPM
officials told us that they have also provided direct support to certain
agencies during times of unusual requirements, such as when OPM staff
helped to facilitate the delivery of federal retirement and insurance
benefits to those employees and survivors affected by the Oklahoma City
bombing in 1995. At the time of our review, officials told us that OPM was
developing a benefits service center that would augment agencies’
retirement education programs by providing benefits officers and
individual employees with customized benefits and retirement information
and counseling.

Most of the agencies that we surveyed indicated that OPM was effective
and timely in communicating retirement information and benefits changes
to a great or very great extent. Moreover, OPM officials told us that they
conducted a customer satisfaction survey in fiscal year 1998 that included
all agencies’ human resources directors and a sample of agencies’ benefits
officers. They told us that the results of this survey indicated that agencies
generally rated OPM guidance materials as excellent and were highly
satisfied with OPM’s efforts to share information and provide technical
assistance.




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                       The retirement education programs of the agencies we surveyed generally
Agencies’ Retirement   included those topics recommended by OPM and the experts with whom
Education Programs     we consulted. For example, agencies’ officials told us that they included
Generally Included     information on the basic features of CSRS and FERS, financial planning for
                       retirement, and maintaining federal health and life insurance in retirement.
Information            Agencies also provided information to employees on whether and/or how
Recommended by         Social Security would contribute to their retirement benefits, particularly
OPM and Experts        for those employees who were covered by FERS. Officials said that
                       agencies provided retirement planning information, but not advice,
                       regardless of the topics included.

                       Agencies we surveyed provided their employees with information on a
                       variety of topics related to the basic features of CSRS and FERS. For
                       example, agency materials that we reviewed typically included information
                       on participation and vesting requirements for both the annuity and TSP
                       components of each retirement system, required and voluntary
                       contributions made by agencies and/or employees, minimum age and
                       service requirements for full retirement benefits, as well as survivor and
                       disability insurance benefits.

                       In addition to this descriptive information on federal retirement benefits,
                       the agencies also typically provided information that their employees
                       could use to plan for their future retirements. For example, agencies
                       commonly provided employees with information on their projected future
                       benefits, tools for determining what level of assets might be needed in
                       retirement, and general investment strategies for accumulating additional
                       assets if desired.

                       Because federal employees covered by CSRS and FERS are eligible for
                       continued health and life insurance benefits in retirement, agencies we
                       surveyed emphasized the importance of maintaining these benefits in their
                       retirement education programs. For example, the agencies informed
                       employees that they generally must be enrolled in the federal health and
                       life insurance benefits programs for the full 5 years immediately preceding
                       their retirement to qualify for these benefits. The agencies also provided
                       information on how employees could provide these benefits for their
                       survivors if they so choose.

                       Agencies’ officials told us that they also included information in their
                       retirement education programs on how Social Security is integrated with
                       federal annuity and TSP benefits. This information is particularly
                       important to those employees covered by FERS, because Social Security
                       represents one of the three components of their retirement plan. Agencies



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                        likewise provided information on Social Security to employees covered by
                        CSRS, because a portion of these employees may also be eligible for full or
                        reduced Social Security benefits on the basis of their spouses’ work
                        histories, work they did before joining the federal workforce, and/or work
                        they plan on doing following their retirement from federal service.

                        Consistent with OPM and expert recommendations, the officials
Agencies’ Retirement    representing the agencies we surveyed told us that they used a variety of
Education Programs      presentation formats in their retirement education programs, including
Included a Variety of   written publications, interactive formats such as seminars and one-on-one
                        counseling, and electronic formats such as Web sites and automated
Presentation Formats    systems.

                        Agencies we surveyed used numerous publications, such as brochures and
                        newsletters, to provide detailed information to employees on their
                        retirement plans and issues to consider in planning for their retirement.
                        Although a few agencies generated some of their own customized
                        materials, the agencies we surveyed generally used written materials made
                        available by OPM or the Thrift Board. According to the agencies’ officials,
                        these materials were convenient and high-quality sources of information
                        for employees. Agencies also used Web sites to make many of these
                        publications more readily available.

                        Agencies’ officials said that they supplemented their written reference
                        materials by using more interactive formats, in particular, seminars and
                        one-on-one counseling. Agencies offered seminars to expose employees to
                        information on a wide variety of topics, which employees could then
                        individually pursue in more detail as needed or desired. When employees
                        requested one-on-one counseling sessions, agencies provided employees
                        with highly customized retirement planning information, including benefits
                        decisions that needed to be made at retirement and the specific steps
                        needed to apply for retirement. To ensure that employees received expert
                        information on a wide range of topics, agencies we surveyed generally
                        contracted out for seminars. However, the agencies did not contract for
                        one-on-one counseling. Agencies’ officials told us that their staff were best
                        able to provide counseling to employees, because they had access to
                        employees’ personnel records, were well-informed on the inherent
                        complexities of the federal retirement programs, and were in a position to
                        take personnel actions on behalf of employees, if necessary.

                        Agencies we surveyed also used a variety of electronic media to further
                        distribute retirement education to their employees, including videos,
                        telephone response systems, Intranet/Internet Web sites, and computer



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                       simulation models. For example, several agencies’ officials told us that
                       they videotaped their retirement seminars (1) to make these sessions
                       available to geographically dispersed employees who might otherwise be
                       unable to attend and/or (2) allow employees to view the seminars multiple
                       times at their convenience. The agencies also commonly provided
                       retirement information using Web sites that included links to other federal
                       sources of retirement information, including OPM, the Thrift Board, and
                       the Social Security Administration.

                       The Air Force, IRS, and HUD also used a centralized and automated call
                       center to provide retirement information to geographically dispersed
                       employees in a manner that they considered to be consistent and cost
                       efficient. Each of these agencies used an interactive system that allowed
                       employees to access a variety of personnel information, including
                       retirement education, by calling a toll-free telephone number. In addition
                       to prerecorded information, employees could reach a benefits counselor
                       who had access to individual personnel records and could provide answers
                       to specific questions. Agencies’ officials said that these centralized and
                       more automated systems were developed in response to downsizing that
                       resulted in the agencies having fewer personnel staff available to provide
                       retirement education to employees. Other agencies, including HRSA and
                       VHA, told us that they were considering adopting a similar approach. OPM
                       officials believed that such systems are likely to become more common
                       across the federal service.

                       Consistent with OPM and expert recommendations, the agencies we
Agencies Made          surveyed made retirement education available continuously throughout
Retirement Education   employees’ careers. Agencies’ officials told us that they view retirement
Available Throughout   education as a shared responsibility between the agencies and employees.
                       That is, agencies were responsible for making such information readily
Employees’ Careers     available; however, employees were also responsible for determining when
                       and how often to seek this information.

                       Agencies’ officials told us that they provided brochures and other written
                       retirement education materials to employees early in their careers as a part
                       of new employee orientations. Written materials were then provided
                       periodically on an as-needed basis. For example, agencies’ officials told us
                       that they provided their employees with revised publications during the
                       1998 CSRS to FERS open season. The agencies’ officials also told us that
                       their payroll offices mail annual benefits statements to employees that
                       contain information on benefits earned to-date and their projected future
                       value at the time of retirement eligibility. Agencies also provided
                       publications on a self-serve basis using centralized benefits resource



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                  centers/libraries and/or posting these documents on their retirement Web
                  sites.

                  All of the agencies we surveyed sponsored retirement seminars that were
                  designed for employees who were approximately within 5 years of being
                  eligible to retire. However, several agencies’ officials told us that
                  employees who had more than 5 years before becoming eligible were also
                  allowed to attend these seminars, space permitting. Moreover, five of the
                  surveyed agencies (i.e., the Air Force, NOAA, the Bureau of Reclamation,
                  HRSA, and Customs) sponsored separate midcareer seminars that were
                  designed to address topics most relevant to employees with approximately
                  15 years of federal service. These agencies’ officials told us that they
                  provided these additional seminars because they felt that attending a
                  seminar for the first time at 5 years before retirement might be too late to
                  allow some employees to fully prepare for retirement when they first
                  become eligible. Thus, many federal employees had the option of taking
                  more than one retirement seminar during their careers.

                  Finally, the agencies we surveyed made retirement education available to
                  employees throughout their careers using a variety of other formats,
                  including the Web sites and automated information systems we previously
                  discussed. All of the agencies we surveyed told us that one-on-one
                  counseling was available to employees at any point in their careers upon
                  request.

                  OPM, Commerce, DOD, and IRS agreed with our findings. In its written
Agency Comments   comments (see app. II), OPM said it believes very strongly that employees
                  should receive information about their benefits regularly throughout their
                  careers so that retirement is simply the culmination of a long planning
                  process. OPM also commented that it is very important to make
                  information available in a variety of ways to meet the varying needs of
                  both employing agencies and their employees. IRS said that it is currently
                  delivering preretirement and ongoing education programs that generally
                  include the information recommended by OPM and our retirement experts,
                  and that it may consider whether improvements could be made to the
                  education provided to employees early in their careers.




                  Page 26                       GAO/GGD-99-27 Agencies’ Retirement Education Programs
Page 27   GAO/GGD-99-27 Agencies’ Retirement Education Programs
Appendix I

Retirement Expert Biographies


              David Blitzstein is the Director of the Office of Negotiated Benefits at the
              United Food and Commercial Workers International Union (UFCW). He is
              also a Trustee of the UFCW Industry Pension Fund and the UFCW
              National Health and Welfare Fund. Mr. Blitzstein serves as a member of
              the National Coordinating Committee for Multiemployer Plans and the
              Employee Benefit Research Institute and as Director of the National
              Commission for Quality Assurance.

              Madeleine d’Ambrosio is Vice President of Education and Financial
              Support Services at Teachers Insurance and Annuity Association, College
              Retirement Equities Fund (TIAA-CREF). Ms. d’Ambrosio is a Certified
              Employee Benefit Specialist whose responsibilities at TIAA-CREF have
              included training, financial guidance and advice, and the development of
              educational seminars. She is a member of both the National Association of
              Women in Education and the Financial Women’s Association.

              Rick Garnitz is President of LifeSpan Services, Inc. Mr. Garnitz works
              directly with corporations, multiemployer plans, unions, and the public
              sector in the development of employee midlife planning and preretirement
              planning. He has also taught marketing and management at Georgia State
              University in Atlanta.

              Patricia P. Houlihan is a Certified Financial Planner (CFP) at Cavill and
              Company. Ms. Houlihan serves on the Board of Governors of the CFP
              Board of Standards and is a member of the International Association for
              Financial Planning. She has also served as an adjunct professor in the
              College for Financial Planning at George Washington University.

              John E. Lawson has been the Executive Director of the Houston Police
              Officers Pension System since 1994. Mr. Lawson is a retired police
              sergeant who has previously worked as a financial consultant for Merrill
              Lynch. He is currently a member of the Texas Association of Public
              Employee Retirement Systems, the National Conference on Employee
              Retirement Systems, and the Association for Investment Management and
              Research. Mr. Lawson is a CFP and a Chartered Pension Professional
              (CPP).

              Olivia S. Mitchell is the Executive Director of the Pension Research
              Council at the Wharton School of the University of Pennsylvania. Also at
              the Wharton School, Ms. Mitchell is a Professor of Insurance and Risk
              Management and a Senior Fellow at the Wharton Financial Institutions
              Center and the Leonard Davis Institute. Ms. Mitchell is a Research
              Associate at the National Bureau of Economic Research as well.



              Page 28                    GAO/GGD-99-27 Agencies’ Retirement Education Programs
Appendix I
Retirement Expert Biographies




Diane Oakley is Vice President of Associations and Government
Relations at TIAA-CREF. Ms. Oakley has spent much of her career directly
counseling colleges and universities on all aspects of their employee
benefit programs. She is the Chair of the Education Committee of the
American Savings Education Council, a member of the Working in
Employee Benefits, and a member of the Secure Retirement Coalition. Ms.
Oakley holds a M.B.A. in Finance from Fordham University.

Martha Priddy Patterson is Director of Employee Benefits Policy and
Analysis at KPMG Peat Marwick. Ms. Patterson conducts and authors the
annual survey Retirement Benefits in the 1990s. She is also the author of
the book entitled The Working Woman’s Guide to Retirement Planning:
Saving and Investing Now for a Secure Future. Ms. Patterson is a member
of the District of Columbia, Texas, and Virginia state bars, as well as the
U.S. Supreme Court bar and local federal bars.

Louise Piazza is a Senior Program Specialist for Economic Security/Work
Issues at the American Association of Retired Persons (AARP). In this
capacity, Ms. Piazza manages and develops program materials for
retirement planning and financial planning programs. Additionally, Ms.
Piazza has led AARP research efforts on retirement savings behavior.

Carlos Resendez is the CEO of the Resendez Group. Mr. Resendez has
served as the Executive Director of the National Conference on Public
Employee Retirement Systems, the Executive Director of the Texas
Permanent School Fund, the Executive Director of the San Antonio Fire
and Police Pension Fund, and the Chairman of the Public Pension
Coordinating Council.

Dallas L. Salisbury is President and CEO of the Employee Benefit
Research Institute (EBRI)—a nonprofit organization that conducts
independent public policy research and education on economic security
and employee benefits. Mr. Salisbury’s past experience includes work as
the Assistant Executive Director for policy at the Pension Benefit
Guaranty Corporation and the Assistant Administrator for Policy and
Research at the Pension and Welfare Benefits Administration of the U.S.
Department of Labor.

Donald H. Sauvigne is the Program Director of IBM Corporation’s
Retirement and Capital Accumulation Program. As program director, he
manages the design and administration of IBM’s retirement programs. Mr.
Sauvigne is a member of the ERISA Industry Committee’s Board of
Directors, a Trustee of EBRI, a member of the Board of Trustees for the



Page 29                         GAO/GGD-99-27 Agencies’ Retirement Education Programs
Appendix I
Retirement Expert Biographies




Council on Employee Benefits, and a founding member of the American
Savings Education Council.

Robert C. Toomey has been the Director of the South Carolina
Retirement Systems since 1996. Mr. Toomey is Chairman of the Deferred
Compensation Commission, a member of the Executive Committee of the
State Quality Network, and a member of the Board of Regents of the South
Carolina Executive Institute. He earned his M.B.A. from Cornell University
and his Ph.D. in Finance from the University of South Carolina.

Mary Most Vanek has served as the Executive Director of the Public
Employees Retirement Association of Minnesota since 1997. Ms. Vanek
has spent her career working on pension policy development and analysis,
plan design, and retirement education and counseling. Ms. Vanek is a
member of the National Preretirement Education Association.

James O. Wood, Esq., is Executive Director of the Louisiana State
Employees’ Retirement Systems. Mr. Wood is a Certified Compensation
Professional, Senior Professional of Human Resources, and Certified
Public Manager. He also serves on the U.S. Department of Labor ERISA
Advisory Council. Mr. Wood holds a J.D. in ERISA studies from Loyola
University.




Page 30                         GAO/GGD-99-27 Agencies’ Retirement Education Programs
Appendix II

Comments From the Office of Personnel
Management




              Page 31   GAO/GGD-99-27 Agencies’ Retirement Education Programs
Appendix III

Major Contributors to This Report


                        Larry H. Endy, Assistant Director,
General Government        Federal Management and Workforce Issues
Division, Washington,   Jennifer S. Cruise, Assistant Director,
D.C.                      Federal Management and Workforce Issues
                        Jeffery A. Bass, Evaluator-in-Charge
                        Gregory H. Wilmoth, Supervisory Social Science Analyst
                        Charlesetta M. Bailey, Senior Evaluator
                        Thomas C. Fox, Evaluator
                        Rebecca Shea, Social Science Analyst

                        Alan N. Belkin, Assistant General Counsel
Office of the General   Robert J. Heitzman, Senior Attorney
Counsel, Washington,
D.C.
                        Margaret T. Wrightson, currently GGD’s Associate Director of Tax Policy
Acknowledgement         and Administration Issues, and Stephen M. Schmal, GAO’s Chief of
                        Personnel’s Employee Relations and Retirement Branch, also contributed
                        to this report.




                        Page 32                   GAO/GGD-99-27 Agencies’ Retirement Education Programs
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