Senators: CFPB Miscalculated With Retirement Tool
Two Senate GOP committee chairmen criticized the Consumer Financial Protection Bureau for releasing a retirement benefits calculator that they say is inaccurate and duplicative of a similar Social Security Administration tool.
Senate Banking Committee Chairman Richard Shelby (R-Ala.) and Budget Committee Chairman Mike Enzi (R-Wyo.) wrote to CFPB Director Richard Cordray and said the independent agency’s retirement benefits planner contains numerous “inconsistencies” compared to SSA’s.
“The planner is intended to help consumers understand how their choice of a retirement age affects their future Social Security benefits,” the senators wrote in a letter dated Dec. 15. “Unfortunately, the planner’s estimates contain numerous inconsistencies compared to the [SSA] retirement benefit calculations. These differences appeared to be magnified for individuals close to retirement for whom this information matters the most.”
CFPB announced the new tool on Nov. 12 in conjunction with an agency report analyzing how Americans plan for retirement.
Shelby and Enzi questioned how much the planner cost and why CFPB needed to create the planner when SSA already had a similar tool. They asked Cordray to “identify any computational, methodological, or programming errors” that could have caused the discrepancies, and explain how these issues would be addressed.
They said the CFPB calculator is flawed because it overestimates possible Social Security benefits for early retirees but underestimates them for those who plan to retire at 70. The letter also pointed to discrepancies between CFPB and SSA results based on the year of retirement and the age of retirement. The senators said the CFPB tool was misleading because it suggested retirees could receive retroactive benefits before full claiming age, which isn’t currently allowed.
Enzi is a former chairman of the Senate Health, Education, Labor and Pensions committee, and in that role he championed a 2006 measure that overhauled pensions and retirement plans.
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