Encouraging retiring workers to annuitize their savings should be a top priority for the federal government.
Officials at the U.S. Government Accountability Office have included that plea on a list of suggested areas for oversight for the next Congress.
GAO officials have divided the list of oversight priorities into 3 sections: targets for near-term oversight; policies and programs that are in need of fundamental reform and re-engineering; and governance issues that should be addressed to help make sure the federal government can cope with the 21st century.
Many of the 15 items in the first category relate to national security issues of only indirect interest to life and health insurers. The one high-priority item that could have a big effect on insurers is a recommendation that Congress work quickly to enhance computer security and deter identity theft.
The second category includes 13 items. The 4 that relate directly to life insurers are recommendations that the government do more to prepare for catastrophes; strengthen Medicare and Medicaid; get better control over tax breaks; and strengthen retirement security.
In the catastrophe section, GAO officials say the federal government has to prepare for the threat of an influenza pandemic as well as for natural disasters such as Hurricane Katrina.
“An effectively functioning insurance market can substantially reduce the government’s exposure to postcatastrophe payouts,” officials write.
Some pundits say Bush administration efforts to simplify the tax code are dead, but GAO officials say reforming the “tax code, including reviewing the performance of tax preferences” should continue to be a priority for Congress.
Congress should “simplify the tax code by eliminating, consolidating, or simplifying tax expenditures, thereby broadening the tax base and possibly lowering tax rates,” GAO officials write.
In the section on retirement security, GAO officials argue that Congress must act to shore up both Social Security and private pension plans.
Congress also has to help Americans understand how to use their 401(k) plans, officials write.
Congress should “improve federal agencies’ efforts to inform American workers about the importance of saving, the amounts that will be necessary for an adequate retirement, and the importance of annuitizing retirement balances,” officials write.
A copy of the GAO oversight suggestions list is on the Web at Document Link