<P><STRONG><EM>Retirement Plan Tax Treatment:</EM></STRONG> New research by EBRI finds that lower-income workers are more likely than upper-income workers to say they would reduce their savings if the tax exclusion for employee contributions to retirement savings plans was lowered or eliminated.</P> <P><STRONG><EM>Account-based Health Plans:</EM></STRONG> Contributions from employers to workers’ account-based health plans declined for the second year in a row in 2010, according to new findings by EBRI. However, workers with employee-only coverage responded to the decrease from employers by increasing their own personal contributions; workers with family coverage did not increase their contributions.</P>
The Impact of Modifying the Exclusion of Employee Contributions for Retirement Savings Plans From Taxable Income: Results from the 2011 Retirement Confidence Survey
RESTRICTING OR ENDING EXCLUSION OF EMPLOYEE CONTRIBUTONS FOR RETIREMENT SAVINGS PLANS FROM TAXABLE INCOME: In recent years, proposals have surfaced to reform the 401(k) system based on the assumption that higher-income individuals receive more tax-related benefits from these programs than do individuals in lower marginal tax brackets (as well as those who may pay no federal income taxes in a particular year). Some of these proposals have included modifications of the current federal income taxation treatment that excludes some or all of the contributions employees make to tax-qualified defined contribution plans.
WHO WOULD BE AFFECTED? Results from EBRI analysis from the 2011 Retirement Confidence Survey (RCS) finds that these proposals may have unintended consequences. Instead of reducing the contribution levels of those with larger taxable incomes (and hence higher marginal tax rates), the RCS results suggest that the categories of full-time workers most likely to reduce (in some cases completely) their contributions are those with the lowest household income; the lowest current amounts in savings and investments; the lowest educational levels; those who are single, never married or not married, or living with a partner; and those who work for small private organizations.
Employer and Worker Contributions to Account-Based Health Plans, 2006–2010
CONSUMER-DRIVEN HEALTH SURVEYS: This report presents findings from the 2010 EBRI/MGA Consumer Engagement in Health Care Survey, as well as earlier surveys, examining the availability of health reimbursement arrangement (HRA) and health savings account (HSA)-eligible plans (consumer-driven health plans, or CDHPs). It also looks at employer and individual contribution behavior.
EMPLOYER CONTRIBUTION LEVELS FALLING: The percentage of workers reporting that their employer contributes to the account was unchanged. But among those with an employer contribution, overall contribution levels have fallen.
INDIVIDUAL CONTRIBUTION LEVELS INCREASING: Individuals with employee-only coverage increased their contribution levels, but those with family coverage did not. Persons in lower-income households were more likely to report that they increased their contributions; however, those in higher-income households did not.
basis wou retirement alt The type of entity that the r percentage reporting a ld be able to ogether or r reco cont educe th ver those co ribution espondent e amo of $1 wor nt u,0 ributions nt they k0s for also a 0 or more save a free p de of spears to cre f a fu eder anction sead f have l inco rom 7 ofme tax househol a sign 3 peif w rce ichen ad n nt t imp inc to withdr 61 ome. Simil a percent ct on th awn an ar t ei (Figure d r l opay tax i Fi kegure lih 4 ood to re )e . 3, s How o th nly on e ed ver, a uce Figure 3 Figure 5 The Im Employer and Worker Contribut pact of Modifying the Exclusion of Em Figure 9 Figure 1 Figure 7 ions to Account-Based Health ployee Contributions Figure 1 Endnotes Endnotes 1 lowest-i the i majority of savings. Fi nvestmen ncome gur workers with e t category income 8 shows t simil ($1 fam ha5 tar to with ily covera ,000 Ann Ann what to l in u privat al Emplo e uge c ss th al is a Individual Contrib e orga v oan $ ailable ntinue y25, nizat er Contrib u d to 000 nion der re ) Figure 4 Figure 6 Figure 8 sh the ceive a , o as the l nly 2 u current ta tion utions contri 2 arg s per to the Account, escent of to bution o tx code negativ the Account, th for no f $ e e em re 1,0 act 0 n-Roth ployees 0ion to t or mor after worki his e. pro - ta ng x contributio pfor cor osal, wpith ora n ts. ions Percenta Ann Ann ge of Individuals u ual al Individual Contrib Individual Contrib With Traditional u utions tions to to the Account, the Account, Employment-Ba sed Stylized Examples of the Total Tax Advantage of a 401(k) Plan, as a 1 1 Plans, 2006–2010 for Retirement Savings Plans From Taxable Income: Results Elective Deferrals are limited to $16,500 in 2011 by Internal Revenue Code Sec. 402(g)(1). A plan may permit participants who are age 50 New Publications and Internet Sites See Paul Frons tin, “Can ‘Consumerism’ Slow the Rate of Health Benefit Cost Increases?” EBRI Issue Brief, no. 247 (Employee Benefit 1 1 1 1 2 3 P P Pe e er r rcenta centa centag g ge e e of Full-time of Full of Full-time -time W W Wo o orker rker rkers Currentl s Currentl s Currently y y Sa Sa Saving f ving f ving fo o or Retirement r Retirement r Retirement 56.7 with mor percent e th i an n 1, dicati 000 ng a sa emplo Among P vings re Among P yAmong P Among P ees indicate ductio ere se e r ons s r r t n. s s ons hat they ons ons With Emplo With Emplo With Emplo With Emplo would re yee-Onl y duc y y ee-Onl ee-Onl ee-Onl e sy avin y CDHP y y CDHP gor F or F s. Th , a ais ,2006 mil mil pe 2006 y yrce – CDHP CDHP 2010 – ntage 2010 increases to 30 percent for Function Health of Mar Benefits Off ginal Te ax Rate and Assumed red HDHP or CDHP, Rate of Return 2006–2010 or over at the end of the calendar year to make additional elective deferral contributions. The elective deferral limit increases by $5,500 for Research Institute, July 2002). From the 2011 Retireme Assuming that marginal tax rates will be constant over t nt Confidence Survey he accumulation and decumulation periods and that investment 40% Stating Stating Stating The The They y y W W Would ould ould Reduce the Amount Reduce the Amount Reduce the Amount Sa Sa Saved If ved If ved If The The They y y W W We e ere re re No Long No Long No Longer er er 40% by Paul Fronst 45% in, Employee Bene and fit Resear Household and ch No Health Pr Institut Income e Under $50,000, oblems, 2006–2010 2006–2010 employees working for businesses with 100–1,000 employees, and 35 percent for businesses with less than 100 [Note: To order U.S. Government Accountability Office (GAO) publications, call (202) 512-6000. To order Individual Contributions 14% those over age 50 in 2011. Effective for years beginning on or after January 1, 2006, if a plan adopts a Roth feature, employees can designate March 2011 • Vol. 32, No. 3 2 Allo Allo Allowed to Deduct wed to Deduct wed to Deduct Retirement Retirement Retirement 2006 2007 Sa Sa Sa 2008 vings Plan Contrib vings Plan Contrib vings Plan Contrib 2009 2010 u u utions tions tions 37%^ Fr Fr From om om A similar occ income contin urrence takes ues to be tax- place deferre when th d unde e perc r thesenta e pro ge o posfals thos , on e statin e mayg ethey wo xpect that uld re the 37% duce re wo the 37% uld be lit amount th tle cha ey are nge in s aoverall ving 2006 2007 2008 2009 2010 employees 50% . Public employees have a lower-than-average propensity to decrease contributions (20 percent for federal Paul Fronstin, “ 35% Health Savings Account 40% s and Other Account-Based Health Plans,” EBRI Issue Brief, no. 273 (Employee Benefit Research publications from the U.S. Government Printing Office (GPO), call toll-free (866) 512-1800 or (202) 512-1800, By Jack VanDerhei, Employee Benefit Research Institute MarginalTax Rate some or all of their elective contributions as designated Roth cont 39% ributions (which are included in gross income), rather 39% than traditional, pre-tax Individuals 40% ’ contributions to HSA plans have incr 2006 eased. 2007 Betwe 2008 en 2009 2006 2010 and 2009, the percentage of individuals with Taxab Taxab le Taxab Income le Income le Income , by, T b o ytal Household Current Emplo , by EducationIncome yer or stop tax advantage saving altogether is s accruing under the displayed pro by t 38% pose he amou d 401(k) system nt they curre , unless t ntly hh ae ve in partici savings pants ar and inv e constrain estments, not in ed in the amou cluding t nt of he 35% 35% 2006 2007 2008 2009 2010 45% employees Institute, September 2004 and 16 perc ). ent 37%^for state and local employees). http://bookstore.gpo.gov] 60% 40% Introduction 33% elective contribut 45% ions. employee-only 35% coverage contributing nothing to an 2006 HSA 2007 decreased 2008 fro 2009 m 28 percent 2010 to 12 percent 31%^ (Figure 5). It 15% 32% 32% 12% value o funds they f th ha eir ve to contr primary reside ibutnce or e each year. the val u e of defined benefit plans. Figure 5 shows that there is a significant 31% 34%^ 31% 34%^ 3 41%^ 41% 35% 30% 40% 33% 30% 33% Employers hav See http://www.mercer.com/pr e been interes ess-releases/1364345 ted in bringing aspects o f 30% consumerism into health plans 30%^ for many years. As far back as 2increased to 15 percent in 2010 but the change was not statistically significant. In co 30% ntrast, the percentage Introduction 32% increase Many workers in the may have t self-reported wo fina prope ncial nsity to r advantages to educe savin part gs for icipate those in the lowest saving in an employer-sponsored r s categories etirement pl . For an: An exampl e, of Under a 401 40% 30% (k) plan, an emplo 27% yee can elect to have the emplo 28% yer contribute a portion of the employee’s cash wages to the plan on a pre-tax 35% 30% 27%^ 28% 28% 4 197 contributi Assuming that 8, th Fiduciary Responsibility ey a ng betwee 50%dopted Sec. the partic n $1,0 1 ipants need to r 0 20 5 an cafd eteria $1,499 pla e iduce their n ns and fl creased from exi contr ble spen 12 ibuti percent ons ding to the point acc ino 200 unts. More 9 to that 18 pe they are o rercent i cently, n emplo nly a 2010, by le to co while ers have th ntribute (1- e been 30% 29% In recent years proposals have surfaced to reform the 401(k) system based on the assumption that higher-income basis. These deferred the full The Impact of Modifying t employer -time workers who mat 30% ch, as wages (ele well as arthe ta ctive deferra e currx ently sa deduct ls) aving ribility e not subject to f for r of co he Exclusion of Employee etirement ntributi ederal income ta ons. Every who report that th tx hing else withholding at t ey c equ ual, it rrently he time of defer woul have l d be e r logica al, and ss than the l to $1,000, y assume are not In 2001, employers formed a coalition to report health care provider quality measures, and toda 26% y the group is composed not only of 28% 28% 28% 10% 35% 25% 24% 35% 24% 27%^ increasingly turning their attention to consumer engagement in health care. In 2001, they introduced account-based perce marginal ntage tax co rate) t ntributi imes th ng $1e ,500 previo or mor us amo e reunt maine because d at 3 o 7 perc f theent. ir financ ial constraints, and that 401(k) contributions are Brislin, Jose 30% ph A. Multiemployer Plans: A Guide for New Trustees. Second Edition. IFEBP members, $29; reflected as taxa 71.3 percent indivi those em duals r ploye e indicate they cble income on the emplo e eive mor s who do e tax not would reduc -related bene have an yee’s Fo empl e the amou fit rm oyer match s from th 1040, U.S. Ind nt sa ese av ved. prog iailabl vidual Income Tax Retu This val rams than e woul ud e declin be mor do indivi es to rn. e sensi duals 38t .8 ive to th in lo perc wer m ent e fo pot argi r those ential nal ta loss of t with x brackets (as savings he tax employers but 25% 25% also consumer groups and organized labor (see www.healthcaredisclosure.org/). In 2002, there was interest in tiered provider 22% Contributions for Retirement Savings Plans From Taxable 22% 23% 25% 21% health no lon pla ger de ns—a combi ductible (in nation any amount of health ), plan Figure s with 2 shows deducti the bles o perce f at ntage leas reduction t $1,000 for in 4 employee-only 01(k) balancescoverage an from elimina d ting tax- nonmembers, $39 25% (quantity discounts are available). International Foundation of Employee Benefit Plans, well as those 30% who may pay no federal income taxes in a particular year). Some of these proposals have included net of $ deductibility. This w1 orks (see P ,000 to le aul Fronstin, “ ss than $ is indee 10, Td what is iered Net 000. works for observed Hospital and Ph in Figure 9, ysician H where t ealth Care Services,” he percentage of th EBRI Issue Brief, ose without a no. 260 (Emplo n employer m yee B atch enefit 40% 20% 21% 28% 21% Although this is does not technically mean that the employee cont 19% ributions are “deductible,” it was easier to specify that treatment to Among persons with family coverage, 8% contribution levels were unchanged in 2010. The percentage not making any Income: Results from the 2011 Retirement Confidence 25% 20% 1 preferred savings or spending accounts that work 19% ers and their families can use to pay their out-of-pocket health care deductions o Per f ccontributio entage Increase in ns as a function of marginal tax rates and assumed rate o 18% f return. Similar to Figure 1, within Publications Department, P.O. Box 68-9953, Milwaukee, WI 53268-9953, (888) 334-3327, option 4; fax: 18% 18% Research Institute, August 2003). modificat indicating that ions of the curr they woulent d refederal duce In 2005, emplo the incom amoe taxat yunt saved is m ers started to 19% ion tr foc eatment that u us on value-based insurance ch larger exc (31ludes some or .2 percent)designs that seek to encourage than those all of the co whos nt e em ributions ployer th matches e use of EBRI E 20% 20% mployee Ben 19% efit Resear 19% ch Institute Notes (ISSN 1085 18% -4452) is published monthly by the Employee Benefit Research 20% 17% Retirement Confidence Surve Retirement Income 17%^ y respondents using the common parlance. 25% 18%^ 18%^ contributions was unc th hanged at 12 percent in 2010. The percentage contributing less than $500 was 8 percent, while Given expenses. A each rat these e of re r few esults, it is not turn scenario employers , the surprising first started impact that is offerin great the hi ge acco r gher for th unt pros opensity to -based h 17% e in the elarger tax bra alth indicate 16% plans i a r n e 200 cket duc 1, t sion in : a 5.9 percent di when t savings hey be as a r gan to fferenc e of sponse fer e between h to ealth Survey, Institute, 1100 13 p. 2 S t. NW, Suite 878, Was 17%17% hington, DC 20005-4051, at $300 per year or is included as part of a membership (262)Av 36 ailable 4-18 After 18 10 Year , e-mai s l: bookstore 16% @ifebp.org, www.ifebp.org/books.asp?6733 16% high-value services w employees20% make to ta hile discoura x-qualif gied ing the defi use of services w ned contributio hen the n plans benefits are not j . This articl 15%eu provi stified by des so the co me stylize sts (see Michael d examples o E. Chernfew, Allis how the on B. all or part of their contributions (22.5 percent). 16%^ 21% 16% 16% 20% 15% 30% of Contributions 1 the 3 percentage contributing subscription. Periodicals po$1,500 or mor stage rate paid ein was Was 50 perc hington, ent DC, (Fi and guraddi e 6). tional In divi mailduals ing offiwith fam ces. POSily coverage TMASTER: Send are addr expected ess 15% 15% 15% 15% reimbursement arrangements (HRAs). 19% 19% 14% In 14% 14%2004, they started offering health plans with health savings accounts eliminati the h These findings ighest an ng the dedu are part d lowest ta ction of the 21 x fo brackets at a r contri st annual Re 6% 6% butions 14%tire 7. ment Confidence is also o 5 percent b rate of r serv Surve ed for those eyturn (RCS), but w a surve reduci ith loy wer that g ng to a educ aug 2.1 ational l es the view percent evels. s and differenc Figure attitudes of e6 sho at work a w 2.s that 5 per- ing- 15% 20% 15% 20% 19% 19% 15% 15% th Rosen, and A. Mark Fendrick, “Value-Based Insurance Design,” Health Affairs Web Exclusive (Jan. 10, 2007): 13% w195 -w203). total tax advantage of some defined contribution plans varies by margi 14% nal tax rate and contrasts these values with the 15% 15% 18% changes to: EBRI Notes, 1100 13 St. NW, Suite 878, Washington, DC 20005-4051. Copyright 2011 by Employee Benefit 13%^ 14% 2 17% to contribute more than in 16% dividuals with employee-only coverage because deductibles are higher for family coverage. 2 (HSAs age and r 32.2 Conc cent rat p)ercent .lusio e of return. etired A By 2 on 009, f m hi ericans regardi gh 1 5 s c perce hool n gradu ng retiremen t of emp atesl in oyer t, th di 12% cate th s with eir prepa 10 ey wo rations for retirem –499 ul workers a d reduce s ent, the n ad vin 20 g ir confidence w sperc , whent o ereasf o employers ith nly 2 regar 2d to vario .1 perc with eu 5 nt of s aspe 00 or more thos cts of retirement, e wit h a 12% 15%12%^ Research Institute. All rights reserved, Vol. 32, no.3. 12% 5Employer and Worker Contribut potential re 15% duction in defi 12%^ ned contribution balances if contributio ions to Account-Based Health ns were no 15% longer “deductible.” This is followed by an 15% 14% General Reference 14% 10% 10% 10% 11% More information about the surv 15% eys can be found in Paul Fronstin and Sara C 13% ollins, “The 2nd Annual EBRI/Commonwealth Fund 3 10% 12% st 12% 3 4 and related issues. The surve workers offered either 10% an H 12%^ y wa Rs conduc A or HSA-eli ted in Januar gible pla 12% y 2011 t n. Em hroployers ugh 20-minute t have a els lephone interview o taken a broader s with 1,2 approac 58 indh to cons ividuals (1,0 um 04 workers er graduate or 20% professional degree have a similar res 12% ponse. 12% 9% Proposals to modify the exclusion of employee contributions for retirement savings plans from taxable income may analysis of t 10% wo new questions from t 4% he 11% 21 wave of the Retireme 9%nt Confidence th Survey (RCS) showing how workers 10% 9% Income Diffe Plans, 2006–2010, rences p. 11 Consumerism in Health Care Survey, 2006: Early Experience With High-Deductible and Consumer-Driven Health Plans,” EBRI Issue Brief, no. U.S. Census Bureau. 8%^ Statistical Abstract4 of the United States: 2011. 130 Edition. $43. Order from GPO. 7% and 254 retirees) 10% age 25 and 7% older in the United St 7% ates. Random digit dialing was used to obtain a representative cross section of the U.S. engageme10% nt through various other initiatives. 8% 7% have unintended consequences according to results from the 2011 RCS. Instead of reducing the contributio 6%^ n levels of would likely react if they were no longer allowed to deduct retirement savings plan contributions from taxable income. 6% Results From the 2011 Retirement Confidence Survey 10% 5% The Employee Benefit Research Institute (EBRI) was founded in 19 7%78. Its mission is to 7%^ 300 (Emplo Generally, yee B lowe enefit Research I r-income persnstitute, December 2006 ons with HSAs are less likel ); Paul Fronstin and Sara y to make a contributio R. Collins, “Findings From the n to the account th 20 6% an hi 07 gher-income 6% Marital status also appears to have a very significant impact on the likelihood that a full-time worker currently saving 5% population. To further increase representation, a cell phone supplement was added to the sample. Starting with the 20 5% 01 wave of the RCS, all 5% 4% 5% 4% 5% 5% contribute to, to encourage, and to enhance the development of sound employee benefit those who might be thought to be most impacted (i.e., those with larger taxable incomes and hence higher marginal 5% 5% 10% 4% 4% 5% EBRI/Common Although persons. O this nw ehighly - ealth Fund C fifth o stylize f perso onsumerism in Health Care Su dn analysis suggests that hi s in households with le rve ss th gh y,”er- EBRI Issue Brief, anincom $50,000 e employees or more i no. 315 (Emplo n i woul nco d be me di yee Benefit Resea the d most li not contribut kely to rch Institute, Mar e to t be ne he gatively ch 3% 2% 3% 5% This report presents findings from the 2008, 2009, and 2010 EBRI/MGA Consumer Engagement in Health Care Survey for retir W eh ment o we would reduc are e the amount saved. Figure 7 shows that more than 2 in 5 respondents that are single, data are weighted by age, sex, and education to re programs a flect the act nd sound pu ual proportions in the a blic policy through o dult population. Data for bjective research and ed waves of the R ucation. EBRCS condu I is the oncted ly Health Care 0% 2%2% EXEC UTIV E SUMMAR Y tax rates), the RCS results suggest that the categories of full-time workers most likely to reduce (in some cases 1%^ 5 2008); Paul F5% ronstin, “Findings from the 2008 EBRI Consumer Engagement in Health Care Survey,” EBRI Issue Brief, no. 323 (Employee account i affected by n 20 a 10 proposal to (Figure 7), cu compare t or eliminate d wit h 1 the 2deductibili percent oty of f persons w 401(k) c itho $5 ntributio 0,000 in ns (a house t least to hold i the ncome point t who di hey ar d not e Current Tax Treatment and Potential Impact of Modifications HDHP or CDHP Offered private, nonprofit, no Not Offe npartired san, a CDHP Washi or HDHP ngton, DC-bas Don't K ed ornow ganiifzat CDHP ion or HDHP comm iW tted as Offered exclusively to and t never mar he 20rie 06d (44 and 20 perc 07ent EBR ) as well I/Commonw as tho es ae not marr lth Fund Con ied, liv sumerism in ing with Health C a partnerare (47 Sur pevrcent) wo eys. It exa uld r me ines the duce th avai eir sa lability vings. before 2001 have been weighted to allow for consistent comparisons; consequently, some data in the 2011 RCS may differ slightly with data 0% Buck Consult 0% ants, LLC. Working Well: A Global Survey of Health Promotion and Workplace Wellness Strategies: completely) their contributions are those: 7 8 0% 0% 0% Benefit Research Institute, November 2008 pu); and P blic polaul Fronstin, “ icy research an Findings from the 2 d education on009 EBRI/MGA economic secu Cronsumer Enga ity and emplo gement in Health yee benefit issu C es are . contri constrained with respect to bute (Figure 8). For the the annual funds lower-income group, available to the perce contribute to ntage contri a 401(k buting ) pla $1,5 n), 00 behavioral or more incr ece onomics ased between has Nothing Less Than $500 $500–$999 $1,000–$1,499 $1,500 or More Don't Know 0% of HRA One of th and H e mo SA-eli st common ty gible plan pes s (consum of retire em r-driven ent savin hea gs lth plplans, or an contri CDH butioP ns), as s today i well nvol asv employ es employe er an ed individu contributio al ns to However, o published in previous w nly 22 percent aves of th of married r e RCS. Data epre spo sn ented in tables dents, 16 per in this report ma cent of divorc y not total to 100 ed or separated, due to rou and 14 perc nding and/or mis ent of wido sing wed th Nothing 0%Less Than $500 $500–$999 $1,000–$1,499 $1,500 or More Don't Know Nothing Less Than $500 $500–$999 $1,000–$1,499 $1,500 or More Don't Know Les A Lar s Than $200 ge A Medium- $200–$499 sized A Small Busi$500–$749 ness, Federal $750–$999 State or Local $1,000 or An Educ Mor ational e or Self Employ Don't Know ment Survey Report. $325. Buck Consultants, A Xerox Company, Attn: Global Survey Resources, 50 Fremont St., 12 Source: Employee Benefit Research Institute/Commonwealth Fund Consumerism in Health Care Survey, 2006 and 2007; Employee Benefit EBRI’s membership includes a cross-section of pension funds; businesses; trade associations; Survey,” EBRI Issue Brief, $15,000 to no. 337 (Emplo $25,000 to yee Benefit Research Institute, December $35,000 to $50,000 to 2009). $60,000 to $75,000 to $100,000 or More The Impact of Modifying the Exclusion of Employee Contributions for Retirement shown th 2009 andat th 20 0% 10 e react from Corporation, With 2 ion o 1 per f e cm ent to Bployees i usiness, 31 W p ithn e si rctuations simila ent, With <100 2.5% but among t r to this Gov he ernment higare o her-income 5 f% ten at Government odds grouAc p, wi ademic the th w perc Ins hat titution enta woul 7.5%gd e have contri be buti en ng ? With the lowest household income. resp contributio 401(k) plans. categories. In the ondents ind n Research behavior Although oriy cated , th Institute e . w they aft eighted /MG er A wo - Cons tax sample of 1,258 uld reduc umer contributi Engagement e their savin ons to these yiin Health elds a st Car g atistical precision of plu s. e Sur plans have vey, 2008–2010. been util s or minus 3 perc ized for several y entage points ( ears (primarily with 95 percent in response <$25,000 <$35,000 <$50,000 <$60,000 <$75,000 <$100,000 labor unions; health care providers and insurers; government organizations; and service firms. Floor, San Fra >1,000 Employ ncisco, eesCA 941 100–1,000 05, (800) 88 Employ 7-050 ees 9, www.bucksurveys.com 1 High School Graduate Some College 4-year College Degree Graduate or Professional Degree Traditional = health plan with no deductible or <$1,000 (individual), <$2,000 (family). Savings P 6 Sour Sour lans From Taxable Income: Resu c ce: e: Employ Employee ee Benefit Benefit Res Resear earc ch h Ins Insttitute/Common itute/Commonw wea ealth lth F Fund Cons und Conslts from the 2011 Retirement Confidence umer umeris ism m in Health in Health Car Care e Sur Surv vey ey, 2006 and , 2006 and 2007; Employ 2007; Employ 5 ee ee Benefi Benefitt $1,5 predicted by 00 or mor a Sour n e objectiv cfe: ell from 54 Employee e co Benefit perce ncerne Resear nd sim t ch to 47 Institute/Common pl perce y withn optim t. wealth Fiund Cons zing a fi umer nancia ism in Health l strategy. In Care Survey a , 2006 and n attem 2007; Employ pt to better u ee Benefin t derstand Source: Employee Benefit Research Institute/Commonwealth Fund Consumerism in Health Care Survey, 2006 and 2007; Employee Benefit ? With the lowest current Employ amees ounts in savin gs and investments, not including the value of their primary residence to Sec. certainty)402(g) limits and/or of what 2 the results would be if all Americans age 25 and the need to comply with ADolder P/ACP nondiscrimination were surveyed with complet requi e accurac rements) y. Th and ere are othe in Roth 40 r possible 1(k) Individuals were defined as having a health problem if they said they were in fair or poor health or had one of eight chronic health conditions HDHP = High-deductible health plan with deductible $1,000+ (individual), $2,000+ (family), no account. Res Resear earc ch h Ins Insttitute/MG itute/MGA A Cons Consumer umer Engagement Engagement in Health in Health Car Care Sur e Surv vey ey, , 2008–2010. 2008–2010. Research Institute/MGA Consumer Engagement in Health Care Survey, 2008–2010. Research Institute/MGA Consumer Engagement in Health Care Survey, 2008–2010. 3 1 1 1 Survey 1 CDHP = Consumer-driven health plan with deductible $1,000+ (individual), $2000+ (family), with account. potential empl CDHP = CDHP = CDHP = oyee behavior Cons Cons Consumer-driv umer-driv umer-driv with en en en health plan health plan health plan respect t with deduc with deduc with deduc o a propose tible tible tible $1,000+ $1,000+ $1,000+ d (indiv (indiv (indiv elim iiidual), dual), dual), inatio $2000+ $2000+ $2000+ n of (family (family (family deductions ), with ), with ), with ac ac acc c count. ount. ount. for 401(k) contributions, this year’s or the Sour CDHP = value ce: Employ Cons of de umer-driv ee Benefit fineen dRes be health plan ear nef ch Ins it pla with deduc titute ns (ebr . i.or tible g) and Mathew $1,000+ (indiv Gir dual), eenwald $2000+ & As (family sociates ), with , Inc., 2011 Retir account. ement Confidence Survey. sources of error in all surveys, however, that may be more seri ous than theoretical calculations of sampling error. These include refusals to be plans (arthritis, asthma, emph that hav Sour e rec ce: Employ eyntly sema o ee Benefit Res bee r ln ung dis intro ear E duce ease, cancer, depression, B ch RIns I’d s titute w for many or (ebrki.or a g)dv calc a empl nc ulations es oyees k diabetes, heart a . now See ,ltex the edg t fore ma a explanation nd u jo tta rity of em ck or other he nde of rss ctenar andi ios plo ng and y art disease, high choleste ee contr of as e sumptions mploibuti y .ee be onsne to 4 fits a 0 rol 1nd t ( or k) he plans ir Health Forum LLC, an affiliate of the American Hospital Association. AHA Hospital Statistics™. 2011 Edition. ^ Difference from prior year shown is statistically significant at p = 0.05 or better. CDHP Eligibility Sour ^ ^ ^ Differ Differ Differ ce: enc enc enc Employ e e e fr fr from pr om pr om pr ee Benefit ior ior ior y y year ear ear Res s s shown is hown is hown is earch Ins s s stttatis atis atis titute tic tic tically ally ally (ebr s s s i.or iiignific gnific gnific g) and Mathew ant ant ant at p at p at p = = = 0.05 or 0.05 or 0.05 or Greenwald better better better...& As sociates, Inc., 2011 Retirement Confidence Survey. ^ Sour Differ cenc e: Employ e from pr ee ior Benefit year sRes hown is earc h Ins statisttic itute ally( ebr signific i.org) ant and Mathew at p = 0.05 or Gr eenwald better. & Associates, Inc., 2011 Retirement Confidence Survey. Health Differences RCS included two new questions. The fi importrst ancasked res e to the nap tion’ ondents s econo how my im among portant is policymbein akersg abl , the ne e to wsde mduc ediat, a their nd the retir publ em ic.e Int t interview ? ed With and the other fo low rms of no est educat nresponse, the e ional levels. ffects of question wording and question order, and screening. While attempts are made to h are still ypertension, high blood pressure so-called “before-tax” contr , or stroke). ibutio ns. RESTRICTIN AHA members G OR ENDING , $180; nonm EXCLUSI embers, ON OF EMPLOYEE CONTRI $240. AHA Servic Figurees, In 3 BUTI c., P.O. Bo ONS FOR x 93 RET 32I 83, At REMENT SA lanta, GA VINGS PLANS 31193-3283, FROM 6 Persons wit According to t h ahe healt 201h0 EB conRI/MGA Consum dition were slightl ery Enga more lik geme ely t nt in H han those without one to co ealth Care Survey, abountribut t 5.7 mill e to ion an adults a HSA. Those ges 21–64 with does this by conducting and publishing policy research, analysis, and special reports on savings pl Wh an c ato we ntributio do ns fr om their taxable income in encouraging them to save for retirement. When confined to full- minimize these f ? Who are si actors, it is impo ngle, nev ssible er marri to quantify the err ed or not marr ors that m ied, livin ay result fr g withom th a partner. em. The R CS was co-sponsored by the Employee Benefit Importance of Being Able to Deduct Retirement Savings Plan Contributions (800) 242-2626, fax: (866) 516-5817, www.ahadata.co m TAXABLE INCOME: In recent years, proposals have surfaced to reform the 401(k) system based on the assumption that employee benefits issues; holding educational briefings for EBRI members, congressional and with private health insurance, or 5 percent of the adult popul9ation with private health insurance, were enrolled in an health problems contribute slightly more than those without health problems. Among persons without health problems, Determi time work ning t ers (n=59 he overa 1),ll ta thex w advantage o eighted result f making s were as before follo -tax ws:co ntributions to a 401(k) plan involves the prediction of Research Institute (EBRI), a private, nonprofit, nonpartisan public policy research organization, and Mathew Greenwald & Associates, Inc., a ? Who work Fromfor Taxab small privat le In come as an e organiz ations. Encou ragement to Save for Retirement, Among Full- federal agency staff, and the news media; and sponsoring public opinion surveys on employee higher-income individuals receive more tax-related benefits from these programs than do individuals in lower marginal HRA or ha 40 percent co d a ntribut high-deduct ed $1,ibl 500 or e plan more with in an 201 HSA in 0 (F 2 igur 01e 0, 9). up Simi from larly, 4 per 51 cent i perc nent o 2009 f . those wit An addition h a h al e6.3 mi alth prob llion lem adults several factors, including amounts and timing o f contributions, marginal tax rates during the accumulation and Washington, DC, based market research firm. The time Wo2011 RCS da rkers, by To ta co tal llection w Househ ao s fun ld Ided b ncome y grants from more than two dozen public and benefit issues. EBRI’s Education and Research Fund (EBRI-ERF) performs the charitable, tax brackets (as well as those who may pay no federal income taxes in a particular year). Some of these proposals 5 ages 21–64 wi Pension Plans/Retir Not at th privat all importan e heal tth insura ............................................................................................. ement nce, or 4.5 percent , reported that they were eligible for an H 4.3% SA but did not have contributed $1,500 or more in 2010 (Figure 10). educational, and scientific functions of the Institute. EBRI-ERF is a tax-exempt organization Figure 4 private organizations, w VanD decumu erhei lation an d Co perio pelan dis, rates th staff ti d (July 2 me donated b of retu 010rn, a ) doc yn E u d B ment a withdr RI and signif awal Green behavi w Figure 10 icant re Figure 7 Figure 6 Figure 9 Figure 8 Figure 2 ald. RCS materia or ductio during the decum n in ls and a list of underw the perce ulat ntage ion “at pe riteriod risk” for rs ma . yF big e accessed uinadequat re 1 shows at the EBRI e results 80% Figure 2 Figure 5 have included modifications of the current federal income taxat Inv ion tr estment Rate of Retur eatment that n excludes some or all of the Not too important ............................................................................................... supported by contributions and grants. 5.0% such an account. Thus, overall, 12.1 million adults ages 21–64 with private insurance, representing 9.5 percent of that U.S. Government Accountability Of Annual Emplo fice. (1) y 401 er Contrib (k) Plansu : Improve tions to the Account, d Regulation Coul d Better Protect Participants P Pe eStylized Examples r rcenta centaAnn Ann Ann g ge e of Full of Full-time u u ual al al Individual Contrib Individual Contrib Individual Contrib -time of the Reduction W Wo orker rkers Currentl s Currentl u u utions tions tions in y y to to to 401(k) Sa Sa the Account, the Account, the Account, ving f ving f Plan Balances o or Retirement r Retirement Web site: www.e for a highly stylized e bri.org/rcs. xampl e in P w ercenta hich an ge in of Individuals dividual currently a With Emplo ge 55 makes annua yer Contrib l (en ution d-of-year) contributions of a retirement income betwe Peenr centa 2003 a gn ed 20 of Full-time 10, based W in o lar rker ge s Currentl part on they adve Saving f nt of aut or Retirement o-enrollment in 401(k) plans; contributions employees make to tax-qualified defined contribution plans. Somewhat important ......................................................................................... 27.8% Not At All Impor tant 1 1 1 market, were either in a CDHP or a high-deductible plan that was elig11 ible for 1 an HSA, but had not opened an account. Stating Stating The The Among P Among P Fry y Among P om W Would ould Eliminating Deductions of e er rs s Reduce the Amount Reduce the Amount ons ons ersons With Emplo With Emplo With Famil y yee-Onl ee-Onl y Sa Sa CDHP Contrib ved If ved If y y or F or F , 2006 The The a u amil mil tions, y y –y y W W 2010 CDHP CDHP e e as re re No Long No Long a er er from Conflicts of Interest to ; (2 Account, ) Defined Cont Among P ribution ers Pla ons ns: W Key I ith Emplo nformati yment-Base on on Target d Date Funds as Default 70% Stating TheAmong P y Would Reduce the Amount ersons With Family CDHP Saved If , 2006 The– y 2010 Were No Longer however, constant amo for tunt to he one-th a 40 ird o 1(k)f the plan house for 10h y oleds wit ars an hd th the lo en west in immediat dexed ely takes the pre-retirem acco eunt nt income, balance o the u a t as a t-risk percenta lump sum, ges, Conclusion For more detail, Very important see Helman, Co .................................................................................................. 61.5% peland and VanDerhei (March 2011, online at www.ebri.org/surveys/rcs/2011/). EBRI Issue Briefs are periodicals providing expert evaluations of employee benefit issues and Not Too Important 1 60% Allo Allo Function wed to Deduct wed to Deduct of Marg Retirement Retirement inal Tax Rate and Assumed Sa Savings Plan Contrib vings Plan Contrib Rate of Return u utions tions Fr From om Investments Should Be Allo Provi wed to Deduct and Household ded to Health Benefits Plan and Health Sponsors and Retirement Income Pr and CDHP ob $50,000 Sa Pa lem, vings Plan Contrib rticipants 2006 or More , 2006 – . Or 2010 – der from , 2010 2006– u2010 GAO. tions From paying tax80% es on the entire amount. In contrast, a second scenario is analyzed in which an individual currently age 55 while much smaller (they were 80 percent in 2003) are still extremely high (70 percent in 2010). Of course, when one WHO WOULD BE AFFECTED? Results from EBRI analysis of the 2011 Retirement Confidence Survey (RCS) finds that trends, as well as critical analyses of employee benefit policies and proposals. EBRI Notes is a The share of the adult population with private health insurance enrolled in an HRA or had a high-deductible plan with O ur 4It was found that a significant percentage of workers with traditional health benefits were eligible for account-based SomewhatT Iaxab mportant le Income Taxable Income , by Existence of Emplo , by Marital Status yer Match Taxable Income, by Amount They Currently Have in Savings In the R 60% CS, reti 60% 60% ree refers to individuals who are retired or who are age 65 or older and not employed full time. 73%^ 80% monthly periodical providing current information on a variety of employee benefit topics. makes annua limits the anal l ysis to those (end of year) who ar contributio e alrea ns dof the y saving, aft 2006 the er-ta 2007 num x valu 2008 bers im e of 2009 th pr e ove substantia same amount 2010 lly: amon (viz., 53% (1-mar g Ge gi n Xers nal tax rate without ) ti any mes these proposal 50% 12%s may have unintended consequences. Instead of reducing the contribution levels of those with larger an HSA remains small but continues to grow. For the second year in a row it was found that the percentage of workers If on health e pla were ns to . Among i look at t ndivi his fr dom a strictly uals with trad fiinancial tional em pers ploy pe ment- ctive, one based wo he ualth ld assume benefits tha 70%^ and a t the choi lowe ce o r-infc h ome in ealth pla dividual n, 38 s per- 35% Very Important 51% 80% EBRI’s Pensio2006 n Inves 2007 tment2008 Repor 2009 t provi 2010 des detailed f 50%^ inancial i50% nformation on the universe of 2006 2007 2008 2009 2010 54%^ pu70% blications the amount contributed in the first scenario) to a non-tax-advantaged vehicle for 10 years and then takes the account future eligibility for participation in a defined contribution plan, the at-risk percentage is 60 percent, but it drops all the taxable incomes (and hence higher marginal tax rates 2006 ),2007 the RC 2008 S results sug 2009 2010gest that the categories of full-time workers Worker refe Social Security Refo rs to all individuals who are not d rm efined as retirees, regardless of employment status. reporting t 50% hat their employer contributed to the account declined. In 2008, 37 percent of workers reported an (those most likely to pay no or low marginal tax rates and therefore have a smaller financial incentive to deduct cent were eligible for an HRA or HSA def-ibased pla ned benefitn, ide n 2010, fined con abtrout t ibution he sam , and 40 e percenta 1(k) plansge . Eas were el BRI Fundaigi me bnt lea for ls o such f Emppla loyee ns in 45% 51% 51% 50% Reduction in 401(k) Balance 12 70% 2006 2007 2008 2009 2010 67% balanc way to 20 e out per ascent for a lump sum those with 20 paying no a or mo dditre years o ional taxes at f fut uthat time. re eligibility. Because th e investment in the second scenario is most likely to reduce (in some cases completely) their contributions are those with 48%^ the lowest ho 61%^ usehold income; the employer cont 50% 50% ribution 65% of $1,000 or mor Benefe it. Pro By 2 gra010, ms of it ferwa s as do straiwn ghtf to orw28 ard, perce basicnt. explThis anation of may be em d ploy ue to ee be the nef weak it progr eco ams i nomy. n 5 Gokhale, Jagadeesh. Social Security: A Fresh Look at Reform Alternatives. $55 (e-book options available: 30-day 64% 200 retireme 8 and nt sav 2009ings contr (Figure 1i) but . ions from taxable income) would be least likely to rate this as “very important.” However, 70% 30% 47% 47%^ In order to ensu 10% re that a traditional 401(k) plan sat 63%^ isfies nondiscrimination requirements, the emplo 59%^ yer must perform annual tests, known as 62% 46%^ 46% 60% made in a non 40% tax-advantaged vehicle, it is assumed that federal income taxes on the investment income are paid at the private and public sectors. The EBRI Databook on Employee Benefits is a statistical lowest current amounts in savings and investments; the lowest educational levels; those who are single, never married Workers with employee-only coverage responded by increasing their own contributions, but those with family coverage ownership for $7; perpetual ownership for $55). University of Chicago Press, Chicago Distribution Center, 11030 Figure 3 shows that those in the lowest household income category ($15,000 to less than $25,000) actually have the 40% the Actual Deferr 60% al Percentage (ADP) and Actual Contribution Percentage (ACP) tests, to verify that deferred wages and employer matching 6 40% reference work on employee benefit programs and work force-related issues. 52% However, t the end of eac he potential h year. The to increase of tal tax savings at-risk perce are ncomput tages reed as the diff sulting from erence a substantial between t portion of he net acc low-u in m come ho ulation after useh t olds axes or not married, or living with a partner; and those who work for small private organizations. did not. Lower-income individuals increased their contributions, whereas higher-income individuals did not. Higher South Lan 60% gley, Chicago, IL, 60628, (800) 621-2736, fax: (800) 621-8476, e 36% -mail: orders@press.uchicago.edu, 35% largest percentage of respondents Marginal cl Tax as Rate sifying the tax deductibility of contributions as very important (76.2 percent). contributions do not discriminate in favor of highly compensated employees. Other types of 401(k) plans (e.g., safe harbor 401(k) plans) are 40% 40% 25% 50% Employer Contributions 37% from Scenario 8% 1 and the net accumulations after taxes from Scenario 2. This savings is then divided by the net decreasing or eliminating future contributions to savings plans as a reaction to the exclusion of employee contributions deductibles may also partly explain higher family contributions. 30% www.press.uchicago.edu/infoServices.html 50% subject to less complex rules. 15% Contact EBRI Publications, (202) 659-0670; fax publication orders to (202) 775-6312. 30% Nearly two-thirds of workers with an HRA or HSA reported that their employer contributed to the account in 2010 for retir accumulation ement 50% after ta savings pl xes ans from from taxa Scenario ble 1 t in ocome n show te he e dad s to be vantage as a analyzed caref percentage of ully 33%whethe amou n considerin nt th g the overa at would be ll The second question asked of those currently saving for retirement was “Suppose you were no longer allowed to 30% Subscriptions to EBRI Issue Briefs are included as part of EBRI membership, or as part of a 28% 6 40% 20% Orders/ All investment income is assumed to be taxed as ordinary income in this example. accumulated a (Figure 2). The p fter ercenta 10 years. ge of work ers with an HRA or HSA plan whose employer contributed to the account did not usefulness of 30% 30% such proposals. 20% 25% $199 annual subscription to EBRI Notes and EBRI Issue Briefs. Individual copies are available deduct r Web Docu etirement savin ments gs plan contributions from your taxable income. What do you think you (and your spouse) 40% Employer and Worker Contributions to 6% Account-Based Health Plans, 2006–2010 35% 40% with prepayment for $25 e 34% ach (for printed copies). Change of Address: EBRI, 1100 13th 10St. change significantly after 2006, other than a drop from 67 percent in 2008 to 63 percent in 2009. 7 would be most likely to do?” When confined to full-time workers (n=460), the weighted results were as follows: 32% 32% 32% 32% 32% 32% Actually S, t u he co bsnstraints w criptioon uld need to be compa s red to the 402(g) limit as well as any plan-specific constraints on tax contributions (primarily Congressional Research Service: Upcoming Rules Pursuant to the Patient Protection and Affordable Care Act, References 20% 30% 30%^ 15% NW, Suite 878, Washington, DC, 20005-4051, (202) 659-0670; fax number, (202) 775-6312; Each of these scenarios is calculated at investment rates of return of 2.5, 5.0, and 7.5 percent, and marginal tax rates CONSUMER- 20%DRIVEN HEALTH SURVEYS: This report presents findings from the 2010 EBRI/MGA Consumer Engagement 10% 30% for the Highly Compensated Employees). 16% http://assets.opencrs.com/rpts/R41586_20110113.pdf 16% e-mail: subscriptions@ebri.org Members 18% hip Information: Inquiries regarding EBRI ? Helman, R 30% 20% 20% uth, Craig Copeland and Jack VanDerhei. “The 2011 Retir 15% ement Confidence Survey: Confidence 18% 18% 15% of 15, Among 28, a worker nd 35 percent. 4%s with an employer contribut Rates of return and ma ion, those wi rginal tth em ax rates ployee are a -only covera ssumed to r gee saw th main constant eir annu over th al employer e 10-year in Health Care Survey, 14% as well as earlier surveys, examining the availability of health reimbursement arrangement Stop saving for retirement altogether .................................................................... 16% 4.7% 15% 14% 16%16% 16% 16% 13% membership and/or contributions to EB 15% RI-ERF should be directed to EBRI President/ASEC 13% 15% 15% 12% Drops to Reco 15%15% rd Lows, Reflecting ‘the New Normal.’” EBRI Issue Brief, no. 355 (Employee Benefit Research 8 14% 15% 20% 12% 11% contributio DiCenzo (Janu ns iar ncrease y 2007). between 2006 and 2008, but 11% fa 11% ll in 2009 and 2010. Between 2006 and 2008, the percentage period. Figure Reduce th 10% 1 shows t e amh oat unt you within eac save .............................................................................. h assumed rate o 13%f return scenario, the total tax advantage 20.5% (as measured by the (HRA) an 0% d health savings account (HSA)-eligible plans (consumer-driven health plans, or CDHPs). It also looks at 20% 12% 12% 12% 12% Chairman Dalla12% s Salisbury at the above address, (202) 659-0670; e-mail: salisbury@ebri.org 12% 9% The Segal Company: 10%^ Survey of Plans’ 2010 Zo 12% ne Status, 9% 11% Institute, March 2011). 11%11% 14%^ 20% 10% 9% 10% 11% 8% 10% 10% 12%^ $15,000 to $25,000 to $35,000 to $50,000 to 10% $60,000 to $75,000 to $100,000 or More Continue to save wh 9% at you do now ...................................................................... 56.2% 7% perce reportin ntage g th in at crease in their employer ret 9%irement contributed $1,000 or 11%income 9% availa11% ble afte more r 10 to the accou years of co nntributio t increased ns) fro increa m 26 percent ses with higher ta to 37 percent x brackets. 9employer and individual cont 9%^ ribution behavior. 11% 10% 10% 6% 8% 6% 6% 8% 5% 10%^ 8% 10% 1.4 percent www.segalco. responded that t com/pu heblicatio y did not kno ns/surveys 5%^8% w. andstudies/winter201 9%1zonestatus2010.pdf 5%^ <$25, 2%000 <$35,000 <$50, 7% 000 <$60,000 <$75,000 9% <$100,000 9%^ 8% 7%^ 8% 7% 10% 8% 8% E ? ditor DiCen ial Boazro, Jodi. d: Dallas “B L. S ehavioral alisbury, pu Fi blinance and R sher; Stephen Be latirement kely, editor Plan . Any v C ieo 7% w ntributio s expressen d i s: n th How Parti is publicatiocipa n and n tts Behav hose of thee a, a uthn od rs should Increase the amount you save for retirement ....................................................... 6% 17.1% 6% 5% 5% (Figure 3). 5% It fel6% l to 32 percent in 2009 6% 5% and to 28 percen 6%t in 2010. The percentage of workers with an5% employer However t10% h5% e absolute difference between the total tax advantage of the highest vs. the lowest tax bracket varies 4% with 5% 4% 10% 4%^ 2% 10 not be ascribed to the o 3%fficers, trustees, members, or other sponsors of the Employee Benefit Research Institute, th5% e EBRI3%^ Education and EMPLOYER CONTRIBUTION LEVELS FAL 3%^ LING: The percentage of workers reporting that their employer contributes to Prescriptive Solutions,” EBRI Issue Brief, no. 301 (Employee Benefit Research In 4% stitute, January 4% 2007). 2%^ 18 percent res Source: Employee ponded that t Benefit Re hesy earch did not kno Institute (ebri. w an ord 0.35 percent g) and Mathew Greenwa refused to ans ld & Associatw es, er. Inc. , 2011 Retirement Confidence Survey. 3% 3% the assumed r contribution of $ ate of retur 200 -$499 n i . ncreased At a 7.5 perc froment rat 14 percent e of re to tu 17 rn assumptio percent be ntween , the absolut 2009 a e differenc nd 2010, altho e is 6.4 percent; ugh the incr ease 1%^ RSocial S esearch0% Fue ncurity d, or th Admin eir staffsi . N stration: othing here An in inual s to b Sta e con ts istical Su trued as anppl attee m m ptent to t to aid or h he indS eo r tcial S he adoe pcurity tion of aBulleti ny pendn, ing201 legis0, la tion, regulation, 0% the account was unchanged. But among those with an employer contribution, overall contribution levels have fallen. 0% 0% 0% or interpr 0% eta 0% tive rule, or as legal, accounting, actuarial, or other such professional advice. 11 ? VanDerhei, Ja Nothing ck. “Retireme Lessn Tt Income han $500 Adequacy $500–$999 for Toda $1,000–$1,499 y’s Workers: How C $1,500 or ertain, More How M Don't uch Know Will It Cost, and was not statistically significant. however, this 0% decreases Married to 2.2 percent Not Married, Liv at a 2.5 percent ing With a Divorced or rate of retur Separated n assumption. Widowed Single, Never Married www.ssa.gov/policy/docs/st 0% atcomps/supplement/2010/index.html Combinin See endnote 1 g the7 of VanDer first two cat hei a egories a nd Copeland bove (July 2010 (and elimi ) for m natin ore g thos detail. e who refused to answer or responded that they did not Less Nothing Nothing Than $200 Les Les $200–$499 s s T Than $500 han $500 $500–$999 $500–$999 $500–$749 $1,000–$1,499 $1,000–$1,499 $750–$999 $1,500 or $1,000 or $1,500 or Mor Mor More e e Don't Don't Don't Know Know Know 2.5% 5% 7.5% Employer Contributes to Account No Employer Contributions Don't Know Partner How DoLes es Eligibility s Than $1,000 to for Partic $10,000 to ipation in a $25,000 to Defined Contri $50,000 to bution P $100,000 to lan Hel$150,000 to p?” EBRI N $250,000 to otes, no. 9 $500,000 or (Emplo yee Benefit Yes No INDIVIDUAL CONTRIBUTION LEVELS INCREASING: Individuals with employee-only coverage increased their know) results in approximately 1 in 4 full-time workers (25.6 percent) who indicated that they would reduce (in some $1,000 <$10,000 <$25,000 <$50,000 <$100,000 <$150,000 <$250,000 <$500,000 More EBRI Notes is registered in the U.S. Patent and Trademark Office. ISSN: 1085 -4452 1085 -4452/90 $ .50+.50 12 Research Institute, September 2010): 13 -20. Investment Rate of Return Some proposa Among workerls with s have family focuse cd on overage, this emp dispalrity by su oyer contri ggest bution leve ing that th ls de ecr deducti eased b as w ility of ell i401 n 2(k) contri 010. Thebutions be e percentage ither VanDerhei (Se U.S. Burea p Sour tember 20 u o ce: fEmploy Labor Statisti 10) al ee Benefit so demonstrates Res cs: State an earch Institute/Common that eligibilit d Local Gover weay lth for Fund Cons a defined contrib nment Employe umerism in Health ution retire Car e Be e Sur nef ment veyits, Ma , 2006 and plan has a signifi rch 2 2007; Employ 010, cant pos ee Benefititive impact on contribution levels, but those with family coverage did not. Persons in lower-income households were more likely to cases complet Sour Sour Sour ely) t c ce: e: ce: Employ Employ h Employ eir cont ee ee ee Benefit Benefit Benefit ributions Res Res Res ear ear ear c ch h c if h Ins Ins Ins the ttitute/Common itute/Common titute/Common ability to w ww ea ea ea lth lth de lth F Fduct them und Cons und Cons Fund Cons umer umer umer is is was is m m m in Health in Health in Health eliminat Car Car Car e e e Sur Sur e Sur d. v vey ey vey Fi , 2006 and , 2006 and , 2006 and gure 4 2007; Employ 2007; Employ 2007; Employ shows the ee ee ee Benefi Benefi Benefi distribut t t t ion of Source: Employee Benefit Research Institute (ebri.org) and Mathew Greenwald & Associates, Inc., 2011 Retirement Confidence Source: Employee Benefit Research Institute/Commonwealth Fund Consumerism in Health Care Survey, 2006 and 2007; Employee Benefit Research Institute/MGA Consumer Engagement in Health Care Survey, 2008–2010. Source: Employee Benefit Research Institute (ebri.org) and Mathew Greenwald & Associates, Inc., 2011 Retirement Confidence Survey. Source: Employee Benefit Research Institute (ebri.org) and Mathew Greenwald & Associates, Inc., 2011 Retirement Confidence reporting a co Res Res Res ntributio ear ear ear c ch h ch Ins Ins Ins ttitute/MG itute/MG n o titute/MG f $500 A A A Cons Cons Cons - umer umer $7 umer 49 Engagement Engagement Engagement increased in Health in Health in Health from Car Car Car e Sur e Sur 6 e Sur perc v vey ey vey , , ent to 2008–2010. 2008–2010. , 2008–2010. 12 percent between 2009 and 2010, while the reduced or elim 1 inated. Presumably, those who continued to make contributions under these proposals on an after-tax reducing the addi www.bls.gov tional compensation most families /opub/ted/2011/ted_20110 need to ac 309.htm hieve the desired level of retirement income adequacy. ? VanD Res erhei, CDHP = earch Ja Ins Cons tck, and Crai itute/MG umer-driv A Cons en umer health g Copelan Engagement plan with deduc d. in Health “T tible he$1,000+ EBRI Care Sur Reti (indiv vey, idual), $2000+ 2008–2010. rement R (family eadin ), e with ss Rating: account. ™ Retirement Income report that they increased their contributions; however, those in higher-income households did not. 1 Sour 1 1 ce: Employee Benefit Research Institute (ebri.org) calculations. See text for explanation of scenarios and assumptions. the percentage of full-tim CDHP = CDHP = Cons Cons umer-driv umer-driv e workers curr en en health health plan plan with deduc ently saving for with deduc tible tible $1,000+ $1,000+ reti (indiv (indiv rem idual), $2000+ idual), ent $2000+ who state th (family (family ), ), with with ac ac at t count. count. hey would either stop saving for 1CDHP = Consumer-driven health plan with deductible $1,000+ (individual), $2000+ (family), with account. CDHP = ^ Differenc Cons e from pr umer-driv ior yen earhealth shown is plan stwith deduc atistically s tible ignific $1,000+ ant at p (indiv = 0.05 or idual), $2000+ better. (family), with account. © 2011, Employee Benefit Research Institute -Education and Research Fund. All rights reserved. Preparat ^ Differion a ence frn om pr d Future Pros ior year shown ispects.” statistically E sBRI I ignificant ssue Brie at p = 0.05 or f, no. better 34 . 4 (Employee Benefit Research Institute, July 2010). ^ ^ Differ Differ enc enc e fr e om pr from pr iorior year year shown is shown is st s atis tatis tictic ally ally si gnific signific ant ant at p at p = 0.05 or = 0.05 or better better . . ^ Difference from prior year shown is statistically significant at p = 0.05 or better. ebri.org A monthl ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org No No No No No No No No y ne tttttttte e e e e e e ess s s s s s s w No • March 2011 • • March 2011 • • March 2011 • • March 2011 • • March 2011 • • March 2011 • • March 2011 • • March 2011 • sltetter from es • March 2011 • the EB Vol. 32, No. 3 Vol. 32, No. 3 Vol. 32, No. 3 Vol. 32, No. 3 Vol. 32, No. 3 Vol. 32, No. 3 Vol. 32, No. 3 Vol. 32, No. 3 RI Education and Vol. 32, No. 3 Resear ch Fund © 2011 Employee Benefit Research Institute 14 10 18 11 19 2 5 3 8 ebri.org Notes • March 2011 • Vol. 32, No. 3 ebri.org Notes • March 2011 • Vol. 32, No. 3 ebri.org Notes • March 2011 • Vol. 32, No. 3 ebri.org Notes • March 2011 • Vol. 32, No. 3 ebri.org Notes • March 2011 • Vol. 32, No. 3 ebri.org Notes • March 2011 • Vol. 32, No. 3 ebri.org Notes • March 2011 • Vol. 32, No. 3 ebri.org Notes • March 2011 • Vol. 32, No. 3 ebri.org Notes • March 2011 • Vol. 32, No. 3 16 12 15 17 13 7 9 4 6