EBRI Job mobility across the total work force remains steady, but median tenure for older age groups The Media EMPLOYEE CEO’s Report —Dallas L. Salisbury continues to decline. The portion of older workers reporting more than 25 years of job tenure has EBRI has experienced a continuing increase in requests for assistance from the print and B ENEFIT fallen to less than 20 percent from a high of just under 30 percent some decades in the past. broadcast media as the columns and air minutes devoted to savings, retirement, pension plans, September 2002 RESEARCH Employers have continued their move to individual account defined benefit plan designs and to 401(k) plans, health status, health insurance coverage, and health cost inflation continue to INST ITUTE the introduction of defined contribution plans, as lump-sum distributions become the norm and ® grow. In addition to thousands of interviews and citations in articles and on data tables and rollover IRAs grow to an asset level that now exceeds stand-alone assets in both private defined charts, EBRI has conducted briefing sessions with reporters and editors of numerous major benefit and defined contribution plans. publications across the nation and has participated in special invitational sessions at major Thank You! meetings of financial writers and editors. EBRI is among the top 20 “think tanks” cited by the EBRI has continued its research, education, and publications on all of these topics and trends major media. Our work cannot assure accurate coverage, but it can dramatically increase the Your membership in EBRI has allowed the ongoing fulfillment of our mission with the extension during the past 12 months. EBRI has continued to provide its Members with policy forums, probability that stories will be balanced in their consideration of employee benefits and the role of longitudinal databases and studies on savings, retirement and health; continuing assistance to publications, Web-based data (www.ebri.org), and trend commentary so that they can remain of employers and unions. thousands of public policymakers and reporters; better informed policy outcomes and stories that ahead of the curve. are more consistently fact-based; and insights, data, and studies to help you do your own Academia planning and priority setting. EBRI seeks to assist you in seeing over the horizon, helping you Our first two forums on consumer-driven health, and resulting publications, were ahead of the stay ahead of the curve. The EBRI team EBRI research is regularly cited in academ , info ic stud rmation center, and Web sites are available to ies and journal articles. Again, this helps to “market,” and our soon-to-be released book on consumer health will provide Members with a assist you in dealing with the turbulent environm increase the likelihood of informed and balanced treatm ent that only seem ent. In addition, EBRI’s s to swirl faster with each Fundamentals framework for evaluating models for this new approach. Work by the EBRI-ERF Consumer passing ye of Employee Benefit P ar. Call on us! rograms is being used in classrooms across the nation to teach the next Health Education Council (www.ourhealthbenefits.org) has added new understanding to the generation of workers and human resources and finance leaders the importance of employee “business case for health insurance” and opportunities to increase coverage in order to reduce benefits and their role in enhancing economic security. 2003 Membership Dues group average cost. The Year Ahead EBRI will continue to use a multi-tiered dues schedule at the same nominal levels that have EBRI work on savings and retirement plan coverage, participation, contribution rates and been in effect since the early days. Technology, foundation partnerships, and special program patterns, investment allocation, current income production success, lump-sum distribution EBRI will mark its 25th anniversary on Septembe funding have allowed us to expand our program, bu r 19, 2003, with a celebration dinner in New t your support is essential. Please consider behavior, projections of future retirement income, and future income adequacy combine to m York at the Waldorf-Astoria hotel ( oving up a level in membership; recom www.ebri.org/25thanniversary mend EBRI to an associate at a nonm ). The vision of EBRI’s ember provide a basis for EBRI Members to benchmark their own programs (EBRI/ICI Database and th organization; founders was an organization that would “contribute to, and plan to join us at the Waldorf-Astoria in New York for the 25 encourage, and enhance the anniversary the Pension Investment Report) and provide a basis for projecting the capacity of future celebration in 2003 (Friday, September 19—make it a weekend!). development of sound employee benefit programs and sound public policy through objective generations of retirees to purchase product (determinants of profitability and the ability to research and education.” Because of its Members, EBRI has done that for 24 years, and will preserve jobs for our workers) (EBRI/Milbank Oregon and Kansas studies). Work by the EBRI- Please call me at 202-772-6322 if you have any su continue to do it in the future! ggestions or questions after reviewing this ERF American Savings Education Council (www.asec.org) and the EBRI-ERF Choose to Save® short report, or e-mail me at salisbury@ebri.org. Have a great fall! public service education program (www.choosetosave.org) is taking savings education into the EBRI will end 2002 with a policy forum assessing the retirement income prospects of those born cars, homes, and offices of Americans in 49 states through radio messages distributed by our prior to 1964, building on our benchmark analysis in Kansas. The forum will explore Employee Benefit Environment in Turmoil PSA partners, the National Association of Broadcasters and the Associated Press News Radio. implications for the Medicaid program, the primary funding source for long-term care, and the Regional Emmy Awards and a national Emmy nomination were special highlights of the secondary implications for the taxes required of individuals and corporations. Will an aging program in 2002; work with the So The last 12 months have been a challenge for the nation and the world. cial Security Administration in 2003 on the national “Save for The tragedy of nation with 23 percent of the population over age 65 (13 percent today) be able to keep a th Your Future” cam September 11 is still hanging in the air as the President and Congress consider a new war in paign will mark a new stage in SSA’s message of recent years: Social Security consumption-driven economy going? What does this suggest about the strategic and business is Iraq. Interest rates are at 40-year lows, bringing a floor of income, it was never intended to provide an adequate income, so don’t retire until you reductions in income for those with assets in interests of employers, unions, and government? What actions will separate the winners from know you have enough incom certificates of deposit, money e market accounts, or short-term to supplement Social Security! bonds, while causing defined the losers? benefit pension liabilities to suddenly appear larger. The equity markets, at multi-year lows, EBRI continues to break new ground with new da threaten to move into a fourth consecutive year of decline, tabases, new partnerships, and new research. causing portfolios and retirement plan Issue Briefs just ahead will explore (1) trends and developments in DB and DC plans; EBRI Mem balances to decline. bers make it all possible and gain strategic insight from the work EBRI does. (2) implications of declining markets on the adequacy of 401(k) plans; (3) the current state of the 401(k) universe and participants; (4) consumer-driven health plans; and (5) the status of health The double impact of low interest rates and low equity returns has caused the nation's defined EBRI Making a Difference insurance coverage for the nation. EBRI Notes and EBRI Washington Bulletins will continue to benefit plans in both the private and public sectors to move down the funding ladder to points provide updates and insights on a range of statistical, trend, legislative, regulatory, and that will soon require large cash infusions and much higher premium payments to the PBGC. Government Policy information resources. EBRI has experienced a heavy year of briefings, testimony, and special requests, as Congress With an overall CPI near 1.5 percent, health care inflation is steaming ahead for retirees at and the Administration, along with state and local governments, wrestle with health, savings, Again, Thank You! upwards of 17 percent, and for employee plans at an average of 14 percent, hitting ceilings as retirement, and other economic security issues, as well as how employee benefit programs fit into high as 40 percent in some cases. Employers in both the public and private sectors are cutting the picture. back on benefit levels, increasing employee premium share, deductibles, co-pays, and out-of- pocket maximums and experimenting with “consumer-driven health plans” and “health EBRI work on health coverage and health programs continues to be a central source of spending accounts.” Among employers that still provide some support for retiree medical information as policy is developed, while our work on defined benefit and capital accumulation Dallas Salisbury benefits, FASB ceilings are being hit and the movement of recent years to change the benefits plans, asset allocation, employer stock, and future income fills policymakers’ needs as they President & CEO available to future retirees is joined by likely freezes in employer payments, with retirees taking consider savings and pension reform proposals. (202) 775-6322 responsibility for future inflation increases in health care costs. Salisbury@ebri.org 3 2