GAO Report De-Risking Fulfilment Services

As the GAO, DOL, IRS and others have noted, the current process of offering lump sum elections during lump sum windows and terminations leaves much to be desired. So much so that the title of the GAO’s landmark 2015 report reads:.

​“Participants Need Better Information When Offered Lump Sums That Replace Their Lifetime Benefits"
February 2015, U.S. General Accounting Office
 
We couldn’t agree more…

Introducing Lump Sum Offer and Pension Election Services with CREWS technology for those plans that want to comply with the latest GAO report and DOL reports.

• Education – Both Qualitative and Quantitative, Personal and Impersonal –for all participants receiving offers
• Technology - Lump Sum vs Pension Analysis – CREWS systems allows participants to determine confidentially which option is best for them using their own retirement information
• Advisor Network - Specially trained  DB Advisor Network (Experienced with DB plan issues, lump sum election offers from de-risking plans, retiree planning issues. latest legal and regulatory requirements)

 
The GAO report itemizes a number of issues which fall into two categories: Disclosures and Advice/Analysis.
 
Disclosures are the responsibility of the plan sponsor and their professional advisers, particularly the actuaries. 
 
Analysis and advice are generally not the responsibility of the plan sponsor and their professional advisers, for a variety of reasons. However, the GAO report does itemize a variety of participant information needs that fall into this category and generally are not being met, including answers to these questions:
​

• Would it be possible to replace the plan's stream of payments by using the lump sum to purchase an individual annuity?
• How could taking the lump sum affect beneficiaries?
• What are the investment risks of taking the lump sum?
• What are the longevity risks?
• How would spending some of the lump sum affect its value over time?
• How would the lump sum payment be taxed?
• What rollover options are available and what are the implications of each?
• Are there early distribution penalties?
• What is the PBGC, and how much of the pension benefit would be covered by PBGC guarantees?

Contact us for more information about how our systems and services can help all concerned: participants, plan sponsors, and consultants.

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