CEO’s Repor CEO’s Repor CEO’s Repor t t t December 2001 December 2001 December 2001 EBRI st At the macro level, this might mark a turn towa Reports on health insurance coverage, consumer-d and Retirement Reform,” and “Medicare in the 21 rd initiatives for new social insurance programs riven health care, heal Century,” and in the fourth quarter 2001 th design trends, the EMPLOYEE CEO’s Report —Dallas L. Salisbury WorldatWork Journal (national health insurance or long-term business case for health insurance, and the financ on “No Time to Snooze: care in Meeting the Needs of an Aging Work F surance) and/ ial capacity of tomorrow’s retirees to finance or new proposals for expansion of orce.” The B ENEFIT latter article presents the business case for spon em meploym dical and long-term ent-based benefits program care expenses have been com s. The lattesorship of em r could focus on both individual employer pleted. Results of this last item ployee benefit program have been s. We also RESEARCH December 2001 INST ITauthored chapters in the program presented to state legislative leaders from UTE s and also new approaches to m 2001 Handbook of Employee Benefits ulti-em more th ployer consortium an 30 states at a series of meetings across the and articles in the s that provide portability and North American ® Actuarial Journal, administrative efficiency. Much thought needs to nation. Social Security Bulletin and Health Affairs be given to the im , a contributed to a book, plications of such a shift in The Future Thank you! focus (relative to the focus on the libertarian, of the Safety Net, and other venues. individually based proposals of recent years) for The Retirem today’s program ent Confidence Surv s and the EBRI research program ey, Health Confidence Survey, . and Value of Benefits Survey, th th EBRI began its 24 each completed and released since the spring, co Development work has continued on the EBRI-ERF year of work on December 4 . Yo ntinue to provide a way to track worker and u, o Retirem ur Mee mbe nt Incom rs, make e Projection Model, which the work possible! As guides for our work, the principles articulated consumer attitudes about savings, At the m ties into m icro level, the tragedies of Sept. 11 have any of the macro- and m retirement, health insurance, and public programs. The 2002 icro-level by the Founders in 1978 still seem very much on- changes m changed the number and nature of requests that entioned above (viz., our model can do target today: RCS will be completed just in ti EBRI is now getting; the nature of the policy debat sensitivity analysis on the impact of defined bene me to be released in conjuncti fit/defined contribution trends, m e here in Washington, DC; and perceptions of on with the February 27–28, 2002, arket volatility, the value of em National Summit on Re increased job turnover, ployment-based econom etc. tirement Savings. , on retireme ic securi nt income ty benefits. ). We have T also he econom recently re-benchmarked to the ic shocks, including market fluctuations, have led to a much higher latest universe figures available from the Form Employee benefit plans serve an essential func 5500 data, added new components to capture the rate of m tion in the United States economy, by edia calls about the extent of health insurance, life insurance, survivor benefits, 401(k) P statutory m ublic education efforts on em providing citizens with opportuniti odifications required by EGTRRA, an ployee benefits and es to achievete financial security. d have developed new behavioral m econom participant investment allocation, the nature of ic security continue to expand, odels that with our ® Choose to Save PBGC guarantees when a com will allow us to perform public service announcements now running analyses no other m pany files for ban odels are yet capable of (i.e., predicted em kruptcy, and m in 49 states on television and radio, uch more. The EBRI team ployee has and our one-half hour television “Savings Game” worked hard to m contribution behavior at levels An ongoing need exists for objective, unbia eet all of the requests. that reflect both the increase in special now having been used by more than 110 sed information regarding the employee benefit the current Sec. 402(g) constraints stations nationally. The value of donated te and the new catch-up provisions. These were pr system, so that decisions affecting that syst levision and radio time in 2001 will be over $10 em esented to the EBRI Board in Decem may be made based upon verifiable facts. ber, and will m The productivity power of technology has transf be distributed to all Members after illion. Both the EBRI-ERF Am erican Savings a few more re ormed most of the world, and it has also Education Council (ASEC) and Consum finements are made). er Health Education Council (CHEC) program transform The Members of the Institute have determin ed EBRI. On Sept. 11 it allowed the team s continue to expand as partnerships that are taking the to head hom ed that their common business interests will e when the government urged it, Finances messages of retirement but to continue doing the respon be furthered by having the Institute develop planning and health insurance cove sive work of EBRI through our network, our Intranet, and the and disseminate the information described above. rage into communities across the th ® Internet. Mem nation. ber support has allowed EBRI to build and m Many em Since the 11 ployers are now using our Ba , we have altered our system backup pr llpark Estim aintain a solid financial foundation. Estim ate Retirem ocedures to ensure m ent Planning Worksheet ore efficient ated response tim with their entire work forces as a year-end consolidated operating revenue an In all its activities, the Institute shall func e in case of a calamity, and we w test of whether a sim d expense will be $5.4 m ill be taking m tion strictly in an objective and unbiased ple tool can ore steps to m entice people to take time to illion and $5.2 m ake certain that illion, plan. All of this m respectively. Operating and lo Members and others are assured access to our work manner and not as an advocate or opponent of any position. aterial is avng-term reserves at year-end will approach $13.6 million. EBRI ailable to EBRI Mem under adverse circumstances. It was and is bers free through www.ebri.org (if you need a th password or assistance, just let me know). tragic to think of all those harm has experienced solid loyalty from ed and lost on the 11 a great employee team , including so m over the years, any with EBRI-Mem and the solid finances ber th Adherence to these principles has served us well, are part of what makes a small non-profit an organizations. It was gratifying when on Sept. 13 attractive place to work, even in a robust as EBRI has becom we were called by o e recognized as the “reliable ne Member asking us to source of verifiable facts” internationally on U.S. The EBRI Team overnight the last two years’ worth of employment market. has continued to work with a broa Again, you, the Mem Issue Briefs bers, em m and ployee benefits; the reliable source that will tell a d array of organizations and has taken reports ke it possible. Notes to the replacement library being set Thank you. you if there are no facts available; of our research to many audiences: The 21st up after the collapse of their offices in the World the reliable source that can put numbe Century Workforce Sum Trade Center. The drive to keep going, mrs released by others, it, the ASPEN Institute to get Conclusion trends, Com back up, is a value to be much honored and respected. and events, mittee on Workforce Change, in context. Thousands of repo the GAO Advi rters, policym sory Committee on So akers, and policy staff rely upon us cial Security and each ye Retirem The importance of health insurance, survivor be ar to ent, be the SHRM Board of Directors, true to our principles. You, ou the r Me Security Industry Association, the Michigan nefits, life insurance, cash reserves, and other mbers, make that possible. In fact, you demand Accomplishments it! Em structured approaches to providing a base of ec ployee Benefits Council, the Southwest Benefi onom ts Conference, ic security for Am the National Coordinating ericans was underlined and th Com Since m reinforced on Sept. 11 mittee of Multi-em y spring report, EBRI has been very produc . The types of expectations that work ployer Plans, the International Society of Certified Em tive, and all of our work ers, their families, the private sector, continues to be used ployee Benefits Reflection Specialists, by Members, the news media, and policymakers and the public sector have for each other in a the Oregon Governor’s Task Force on timas they focus on trends and proposals and e Long Term Care Reform of crisis have been re-em , LIMRA, the National phasized. The Education Association, and m benchm collective power to provide financial security agai A recent book, arking. EBRI continues its tradition of prov The Fourth Turning, any m was about the prospect of a cri eetings with in nst risks that can create personal crisis that an dividual government offi iding verifiable facts to reporters and decision sis that would serve to move cials, employers, and th o the nation toward a greater sense of com make individual alone cannot “self-insure” has been se thers. rs. munity.ared into our visions. The authors argued that there had been three The tragedy of Sept. 11 other such crisis-driven reorientations in our hi served to remind the EBRI team of how important story (the Civil War, our mission is, and our principles are, and how the Great Depression, World ® Contracts have been signed for a fifth phase of the Choose to Save War II) that brought a major shift in national values, and that a fourth was due by 2025. The A series of reports has been published from important it is that we succeed. With your continued support, we will. the EBRI/ICI Participant-Directed Retirem education program. Public ent Plan Data Collection Project (the EBRI/ICI 401(k) da only question was what and when. service announcements are now running in nearly The authors have been on a num tabase) on account balances, investment and every state and every market, as noted above. ber of interview shows since Happy Holidays and the Very Best for 2002! contribution behavior, Sept. 11 suggesting that the crisis is now with us that represents this “fourth turning,” that the Fidelity Investments will again underwrite the Washington, DC, portion of the program employer stock, and loans. This work has proven invaluable in responding with a to the Enron calls and to inquiries related to “first war of the 21st century,” as the president has labeled it, has m grant of $1 million that allows for all of the PSA investment advice propos production. The Bush adm arked what will be seen in als in Congress. Our inistration is planning Dallas Salisbury hindsight as the beginning of a majo to hold the second SAVER Summit in late Febr Pension Investment Report continues to provide regular data r change in societal values and uary 2002, and CTS will be featured at the updates on both defined benefit and orientation. They believe that ® CEO defined contribution plan assets the value changes com Summit. EBRI, ASEC, and Choose to Save ing out of this crisis will be and investments, and 2002 will bring enhancements as we will be are official sponsors of the SAVER Sum with us for decades, repeating history, and that mit. (202) 775-6322 they will bring m able to provide greater detail. ajor social and policy change. salisbury@ebri.org The EBRI Team is also working to assure that our work gets distribution in other venues, with articles in the ISCEBS Benefits Quarterly (fourth quarter 2001) on “Prospects for Social Security 3 2 4 2121 K Street, NW, Suite 600, Washington, DC 20037 (202) 659-0670