Here's the actual GAO
report.
While some of what it says may be sound and even useful, there are enough things that pop out to suggest one not read a news report without looking at the GAO report itself.
The report starts: "GAO’s
nongeneralizable survey ..." Much later it amplifies: "The participants’ responses and our analysis of their accuracy are not generalizable.."
"Our web-based survey was an
opt-in panel [self-selecting participants] and open to anyone who received a link to the survey ... [including] plan sponsors and other plan professionals who assist plan sponsors ... On the basis of our application of recognized survey design practices and follow-up procedures, we determined that the data were of sufficient quality for our purposes."
While the report says that people average 11 jobs over the thirty year period between ages 18 and 48, it notes that these jobs may be held
simultaneously. Also, half of these (5+) are held before age 25 (Table 4). Where and how is that accounted for when looking at the savings lost by starting jobs that require a one year waiting period before contributing to a 401(k)?
On the one hand, the waiting period for all these early jobs may be more costly than the same waiting period at the later jobs. That's because the early job money that would have been contributed but for the waiting period would have grown for more
years than later job contributions. On the other hand, early career wages are lower, so fewer 401(k) dollars may be lost by having to wait. Perhaps even no retirement dollars at all are lost. This is because at starting wage income levels, people might be able to put all these dollars into IRAs without maxing out.
It doesn't seem that the report is this sophisticated. It seems to use hypotheticals that it considers average, but I've taken just such a quick cursory look that all I've got are questions.
The report may hang together. The GAO did use some actual labor statistics. But it seems hard to tell from a very quick first glance. As an employee, I want to get everything I can from my employer - immediate participation, immediate vesting, large match. As an employer, I want to be able to retain employees,
especially in the more mobile 21st century. The best way to do that is still to provide a work environment where people want to stay.
