A Retirement Dashboard for the U.S.?

Noting that the U.S. retirement system is not easy to navigate, a recent white paper calls for the creation of a retirement dashboard to help savers better manage and keep track of their savings.   

“While it would not address systemic problems such as coverage, a dashboard could reduce the strain that a complex retirement system imposes on households,” authors David John of the AARP Public Policy Institute, Grace Enda of the Urban-Brookings Tax Policy Center, and William Gale and J. Mark Iwry of the Brookings Institution, explain in “A Retirement Dashboard for the United States.”

“American workers could more easily find and recover lost accounts if an easily navigable website housed a database that included the existence and current location of all their accounts and explained how to claim and consolidate those accounts,” they note. Moreover, the suggest that a dashboard could help reduce leakage by helping people understand the consequences of cashing out funds and the ways to preserve savings through retention or rollover.

Other Countries Do it

To help address these issues, the authors observe that several governments and pension providers throughout the world have created pension registry websites where people can see all their retirement benefits in one location, including Social Security, employer-sponsored plans and IRAs, along with the contact information for the administrator of each plan or account. What’s more, they note that other countries have gone further and developed national, online retirement “dashboards” that include a registry and offer expanded functions, such as recovering and consolidating lost accounts, projecting estimated retirement income, expanding financial literacy and providing financial advice.

The authors further contend, however, that the private sector does not currently provide such a dashboard and is unlikely to be able to do so. 

“Fintech applications typically help retrieve only those accounts the user is already aware of and often charge for their services. Some applications can search databases, but recordkeepers and asset managers may be reluctant to allow access to possible competitors,” they write. 

“Accordingly, while the private sector could conceivably provide a dashboard, we believe it would be most effectively and reliably provided through a website sponsored or co-sponsored by the federal government,” they further emphasize. 

Recommended Requirements

As such, the paper suggests that policymakers should address the most urgent needs first and phase in other solutions. An online registry would be the most common purpose, showing users all their retirement benefits and enabling them to find lost or missing accounts from previous jobs. 

The paper further recommends that the dashboard should be easy to access and use, and should be available free of charge. Moreover, the authors note that it should require data standardization so that information from different providers can be compiled and provide users a complete picture of their benefits. And in addition to being secure, it should require participation from all retirement plan providers, as is the case in most other countries with dashboards, they further recommend.  

The authors do acknowledge that a dashboard would need to overcome various obstacles, including that the scale and complexity of the U.S. private retirement system is much larger and more diverse that other counties, that many industry stakeholders may feel threatened by a dashboard, challenges with cybersecurity safeguards, and funding the cost to the industry.