Americans’ $9 trillion retirement savings are exposed as personal data flows to marketers and data brokers.
GAO Report Highlights Data Privacy Risks
MetLife CEO Michel Khalaf warned that retirement savings gaps persist, but the GAO findings expose a new vulnerability in data privacy.
The Government Accountability Office warns that employer‑sponsored retirement plans may share or sell participants’ personal information, creating a pathway for financial product marketing and identity theft.
More than 126 million Americans participate in 401(k) and similar accounts, which hold over $9 trillion in assets, according to the GAO.
Employers routinely provide details such as birth dates, Social Security numbers, account balances and other identifiers to asset managers, payroll processors and record keepers who handle contributions and investments.
Service Provider Practices Examined
A GAO review of privacy disclosures from 31 service providers showed that 29 either explicitly permitted data sharing or gave no clear restriction on marketing use.
Seventeen of the 31 providers did not limit the sale of participant data to data brokers or other third parties, raising the risk of widespread exposure.
Only 12 of the 31 providers included opt‑out rights for participants, leaving most individuals unable to control how their information is used, sold or shared.
GAO Recommendations
The GAO urges the Labor Department to issue additional guidance that defines what retirement plan data is private and requires written permission before service providers use or share it.
Such guidance should also outline best practices for giving participants meaningful choices about the use, sale or sharing of their personal information, the GAO said.
Labor Department Response
The Labor Department said it fully supports protecting participants’ personal information and pointed to 2021 cybersecurity guidance that treats data privacy as a fiduciary duty.
While the agency stopped short of endorsing the GAO’s recommendations, it pledged to carefully consider supplemental guidance aligned with the report’s suggestions.
