The U.S. Government Accountability Office called out the Department of Labor Monday for a lack of 403(b) guidance.
403(b) plans — which are individual account-based plans — allow for participants to make investment decisions, GAO said. Because DOL oversees such plans, which are common among teachers and non-profit workers, the GAO encouraged the Labor Department to improve its educational offerings.
“We found that DOL's website contains little educational material specific to 403(b) plans — such as information to help participants understand the fees associated with these plans,” GAO said in a July 24 statement. “We recommended that DOL update information on these plans to help participants.”
The Securities and Exchange Commission and the Internal Revenue Service also deal with 403(b) plans, the GAO continued. But DOL oversees plans subject to the Employee Retirement Income Security Act of 1974, and investigates alleged violations of the law. “For example, DOL has investigated instances of self-dealing — when a plan fiduciary uses plan assets for the fiduciary's own interest or own account,” GAO continued, emphasizing the importance of education for enrollees.
DOL “neither agreed nor disagreed with [this] recommendation,” the watchdog said, adding that the agency pointed to its webpages on 403(b) plan issues; DOL said “the information in its 401(k) publications could be helpful to ERISA-covered 403(b) plan sponsors,” and that education on fees are present in its material.
For the GAO audit, researchers also looked into states identified as taking steps to improve 403(b) plan outcomes.