6 5 4 2 3 —Dallas L. Salisbury Health Care Plan Particip • New D • Resea December 2008, I was a spe rch— evelopments Health Care aker at a confer “401(k) Plan Asset All ant Demographics ence on “The Future of Lif o cation, Account e-CyBalances, cle Saving and I and Loan Activit nvesting,” y sponso in 2007.” red b This y President’s Report March 31, 2009 th Tax Issues and Health Care Benefits • report is an update of EBRI and ICI’ various organ Sept. 2008, EBRI Issue Bri izations and heef, ld at Boston “Sources of Health Insurance and Ch s ongoing resear University las ch into t October. This was the second i 401(k) aracteristi plan participants’ cs of the Uninsured: activit n a series that y through Fundamentals 6 Edition The all-new sixth edition of EBRI’s reference book, • brings together academic r y January Analy ear-end 2007. The report sis of t 2009 h , e March 200 EBRI Issue Brief esear 8 Current Po is divided i , chers, expert prac “Cappi ntpulation S o ng the Tax Exclusion for four sections: The first describes the E Fundamentals titioners, and public-sector policy urvey.” Presents of Employee Benefit Programs E the results of EBRI’ mployment-Based H BRI/ICI 401(k) makers to s ealth lates explore t , was what the database; the analy Coverage: Implications for sis of the uninsured based on the March modern science of second presents a snapshot of participant account ba life-cy Employ cle finance i ers and Workers.” (Annual Social and Econom mplies for households, businesses, With health r lances at y eform a ic) S major priorit ear-end 2007; the third upplem and government. I ent to the y of the new published in January 2009. Fundamentals was first published by EBRI in 1983 and is widely used by 111th participated in the segment titled, looks at parti Current Popu Congre c lation Surve ss and President Barack Obam ipants’ asset y allocations, including . “How Older People Behave.” a, this a new analy Issue Briefs exa is of m401(k) ines the ad participants’ ministrative a use of nd benefits professionals as a training resource, in colleges as a textbook, and by journalists as a valuable • reference. i lifecy August 20 mplem cle funds; the fourth focuses on Fundamentals entati 08,on issues that arise fro EBRI Notes can be purchased for $19.90 (discounts av article, “The Im m one of the participants’ pact of Immigration on major reform 401(k) loan activity. propo ailable to EBRI Mem Health Insura sals: Capping the exclusion nce Coverage bers) and also is in the of Jack VanDer employmhei: ent- based health coverage from workers’ taxable income. • available online. Chapter 13 of United States, 199 EBRI’s Databook 4–2006.” Exa on Em mines tplo he im yee Benefits pact of a specific de functions as a guide to ad mographic on health insurance ditional EBRI • “Econom coverage. research on 401(k) Plans. ic Shift: Diagnosing a Volatile Economy’s Impact On Recent Retirees’ Decisions, and This report takes a new form and carries our new logo for EBRI’s second 30 years. It can be accessed anytime Health Confidence Survey Launch Monitorin of New Brand an g the Future of d WeBaby b Site Design Boomer Retire ment Income,” RIIA Managing Retirement Income • Additional data tabulations on health insurance coverage for the nonelderly population are available at EBRI.org’s President’s Report page, so that you can take advantage of the links should you be reading this th On Oct. 7, 2008, EBRI released the results of the 2008 Health Confidence Survey (HCS). In 2008, 19 In the begin Retirem Conference ent Confidence Sur ning of t , Boston, MA, he new vey year, as part of its 30 Feb. 10, 2009. anniversary commemoration, EBRI re-launched and in Chapter 26 of EBRI’s Databook on Employee Benefits and for workers in Chapter 27 of EBRI’s in print form, or should you misplace an electronic copy. As always, I would appreciate hearing your thoughts organizations signed on as underwriters of the HCS, the largest number of underwriters in the survey’s updated its • Underwriting Urban Institut Web site e conference to make its rese on Frozen Pensions and Fa arch and publications easier lling Stoc to acce ks: What Will Happen to Retirees’ ss. The new Web site design is Databook on Employee Benefits. on how this report could be made more valuable and any suggestions on how EBRI can be more effective. 11- part of an EBRI rebranding y The 200 ear histo 9 ry Ret . The first irement Confidence Survey meeting of the Adviso effort, which also in was fielded f cludes a new logo a ry Board for the 2 rom Jan. 2 thr 009 S nd new desig ough urvey Jan. 31, 2009. We received met March 17, 20 n for the publications, 09 to Incomes? Urban Institute, Washington, DC, Feb. 3, 2009. discuss the survey instrument. Issue Brief the results of the survey in s, Notes, and Fast Facts February . 2009, and met with the underwriters on February 19 to go over Retiree Health Care The E • Nov. 13, BRI Bo 20 ard of Tr 08, “No More Retiremen ustees oversaw a great year t? Pensions, Social Security in 2008. Revenues and e and an Aging xpenses for all Workforce,” Wharton activities came the results. The final report is scheduled to be released April 14, 2009. The 2009 survey had 28 • close August 20 Rese to m arch Ad atching 08, at visory EBRI Notes a tot Group. al of $4. article, 22 millio “Savi n, wit ng for Health h a net defici Care in Retir t of $22,000.e Ex ment: The U penses incse of Health luded a major Savings EBRI Now on Twitter Media Coverage of the 20 underwriters. 08 HCS investment in computer systems and systems security in order to allow us to continue to expand our Accounts.” Statutory contribution limits make it unlikely that these accounts will play more than a • Testified Oct. 7, 2008, before the House Education and Labor Committee at a hearing on “The Impact From Oct. 7, 2008, to March 20, 2009, partial tracking found the 2008 HCS mentioned in 11 As of February 2009, EBRI comp rehensive 401(k) and IRA is posting li databases.nks to its la This is pay test resear ing off inch and publications 2009, as the current ec on Twitter, the real-ti onomy and markets me of the Financi minor part in savings for health care cos al Crisis on Workers’ Retirem ts inent Security.” retirement. The m The atestim ximum savings that can be ony given that day and newsweeklies, eight periodicals, and three news wires. In addition, 19 Web-based outlets (such as short m haveMedia Coverage of the 20 led eto ssaging service that works a constant stream of req 08 RCS uests over fom r ana ultiple networks and devices. lysis of the implications for retirement plan participants. accumulated in an HSA will be far from sufficient to fully cover the savings needed in retirement for expanded testimony written for the hearing record are both posted on the EBRI Web site. MarketWatch, MSN Money) posted headlines and links on their Web sites. From April 9, 2008, to March 20, 2009, partial tracking found the 2008 RCS mentioned in 112 insurance premiums and out-of-pocket expenses, especially since individuals can (and may need to) Also , happily, 2009 is looking like it will be a positive year financially. Renewals are at 95 percent, with most EBRI’ newspapers, s site can be reached 58 periodicals, and 20 on Twitter at news wires. @EBRI or at its In addition, 60 We Twitter URL. b-based outlets (such as use HSA assets to pay for health care services during their working years or to pay COBRA Paul Fronstin: of the dues “in the bank,” and we are adding new members (full listings are on the Web site on the Consumerism in Health Care MarketWatch, MSN Money) posted headlines and links on their Web sites. premiums and insurance premiums during periods of unemployment. • “The Tax Treatment of Health Insurance and Out-of-Pocket Expenses,” Insure the Uninsured Membership page). The Board has already approved a budget that assures that we can maintain our full In recent years, employers have turned to consumer-directed plans as a way of managing rising health 401(k) Balances and Changes Due to Market Volatilit y Projects: 13th Annual Covering the Uninsured Conference, Sacramento, CA, Feb. 4, 2009. program in 2009 and 2010, as health and retirement issues are at the center of the national policy debate. We insurance premiums. EBRI has been at the forefront in research on developments in this topic. In October 20 Lump-Sum Distributions 08, EBRI beg an conducting regular updates of 401(k) balance estimates as the markets For further data on health insurance coverage of the elderly population and a guide to further EBRI • “Changing the Tax Treatment of Health Insurance: Implications for Employment-Based Health began the year with an operating fund of $3.6 million and a long-term reserve of $7 million, providing a very change, based on data from the EBRI/ICI 401(k) database, the most comprehensive database on 401(k) • January 2009, EBRI Notes article, “Lump-Sum Distributions at Job Change.” With 401(k)-type research on retiree health care, see Chapter 36 of EBRI’s Databook on Employee Benefits. Benefits.” Families USA Annual Conference, Washington, DC, Jan. 30, 2009. strong financial base for operations. Consumer Engagement in Health Care Survey plan participants yet assembled. Not only are these data unique, but EBRI also is able to provide long- retirement plans now dominant and “traditional” pensions offering lump-sum distributions at • “Changing the Tax Treatment of Health Insurance: Implications for Employment-Based Health ® The EBRI/Mathew Greenwald & Associates (MGA) Consumer Engagement in Health Care Survey is term results for 401(k) participants who have consistently participated in their employer’s retirement plan, American Savings Education Council retirement, a growing number of workers are faced and Choose to Save with m aking decisions about what to do with the th Benefits.” AARP National Policy Council, Washington, DC, Jan. 14, 2009. Our 30 birthday party in December was enjoyed by all, and we are off to a great start as we begin our fourth ® due to the l an online survey ongitudinal (historic) info of privately insurm red ad ation available in the databa ults ages 21–64. It is con se. ducted to provide reliable national assets they have earned in their employment-based plans when they change jobs. After leaving For an update on the activities of ASEC and Choose to Save, please see the Spring 2009 ASEC • “Trends in Employment-Based Health Benefits and Implications from the Election.” BlueCross decade of research and education. data on the growth of consumer-driven health plans and high-deductible health plans and their impact employment with a retirement plan sponsor, the worker has three choices for his or her retirement Chairman’s Report. BlueShield National Labor Office Health Fair, Washington, DC, Nov. 13, 2008. on the behavior and attitudes of health care consumers. In November 2008, EBRI released the results account: Leave the money in the plan, roll it over to another tax-qualified savings vehicle, or cash it • Media Coverage of the 401(k) Balances and Changes Information On behalf of myself and the team at EBRI, I extend my grateful appreciation to our Members, whose moral • “Savings Needed to Fund Health Insurance and Health Care Expenses in Retirement: Findings from a th of the 4 Annual Survey. Results for earlier editions of the survey are available at EBRI/MGA out. From Oct. 1, 2008, to March 20, 2009, partial tracking found the 401(k) Balances and Changes and financial commitment to our mission and vision continues to make all our work possible. Your dedication Simulation Model.” 2008 NAPFA Northeast/Mid-Atlantic Conference, Hershey, PA, Nov. 11, 2008. Consumer Engagement in Health Care Survey. Information was mentioned in 26 newspapers, 25 periodicals, and 3 news wires. In addition, 17 and support are vital to our ability to continue to “tell it like it is” with “just the facts.” And I thank the many • “Changing the Tax Treatment of Health Insurance: Implications for Employment-Based Health Retirement Plan Participa Web-based outlets (such as nt Demographics MarketWatch , MSN Money) posted headlines and links on their Web others with whom we work. Benefits.” National Congress on Health Reform, Washington, DC, Sept. 23, 2008. Outlook for Consumer/Patient Engagement in Health Care—30 Years into the Experiment • Feb. 200 sites. 9, EBRI Notes Article, “Retirement Plan Participation: Survey of Income and Program • “Uninsured Workers: Trends in Coverage and the Role of Small Business.” BlueCross BlueShield For three decades, employers have been looking for ways to stem rising health care costs. Now some Participation (SIPP) Data, 2006.” While SIPP data have the advantage of providing relatively Association Capital Hill Forum, Washington, DC, Sept. 22, 2008. are pinning their hopes on a relatively new idea—consumer-directed health plans, which link high- 2009 Lillywhi detailed infor te Award mation on the retirement plans that workers participate in, they also have the drawback deductible health insurance plans with tax-favored accounts. EBRI’s December 2008 policy forum, On Feb. 10, of being field 2009, EBRI an ed only once every nounced two three to winners of th five yeare s. By com 2009 EBRI parison Lilly , the Census Bureau’ white Award, which recognizes s Current Research—Retirement titled “Outlook for Consumer/Patient Engagement in Health Care—30 Years into the Experiment,” Population Survey provides overall participation levels of workers on an annual basis, but does not outstanding lifetime contributions to Americans’ economic security. They are Kenneth L. Holmes, of 401(k) Plans: took a detailed look at consumer-directed health plans and related issues. Wilm provide i ington, DE, a retired investm nformation on the plan t ent ymanager and c pes in which the workers are par onsultant; and Dallas L. Salisbur ticipating. y, of Washington, Since the summer of 2008, EBRI has released three Issue Briefs on 401(k) topics: • Summary of the December 2008 policy forum. DC, EBRI president and chief executive officer. Dallas Sali • October 2008 sbury , EBRI Issue Brief, “Employment-Based Retirement Plan Participation: Geographic • March 2009, “Use of Target-Date Funds in 401(k) Plans, 2007.” This study uses the unique richness • Presentations from the December 2008 policy forum. Differences and Trends, 2007.” Presents the results of EBRI’s latest analysis of the uninsured based President & CEO of the data in the EBRI/ICI Participant-Directed Retirement Plan Data Collection Project, comprised Presentations by EBRI Staff on the March (Annual Social and Economic) Supplement to the Current Population Survey. EBRI of almost 22 million participants, to examine the choices and characteristics of participants whose Behavioral Research The follow are presentations and testimony by EBRI staff in the past eight months: • Further details are available from Chapter 10 of EBRI’s Databook on Employee Benefits. _____________________________________________________________________________________ plans offer target-date funds. The August 2008 EBRI Issue Brief, “Lessons From the Evolution of 401(k) Retirement Plans for Dallas Salisbury: • November 2008, EBRI Notes Article, “Retirement Annuity and Employment-Based Pension Income EBRI’s May 7, 2009, Policy Forum will be on “Decumulation/Retirement Income in Defined • February 2009, “The Impact of the Recent Financial Crisis on 401(k) Account Balances.” This Increased Consumerism in Health Care: An Application of Behavioral Research.” This Issue Brief • I testified at the Senate Special Committee on Aging hearing on February 25: “Boomer Bust? Among Individuals Ages 50 and Over, 2007.” This article uses the March (Annual Social and Contribution Plans.” You can register on-line. For more information, e-mail willis@ebri.org analysis estimates changes in average 401(k) balances from Jan. 1, 2008, to Jan. 20, 2009, and Jan. 1, considers the lessons learned in the evolution of 401(k) plan design, where the objectives are a high Securing Retirement in a Volatile Economy.” My testimony is online. Economic) Supplement to the Current Population Survey to determine how different demographic 2000 to Jan. 20, 2009, using the EBRI/ICI 401(k) database of more than 21 million participants. This level of participation, a high level of worker contribution, a diversified approach to investing, • I was interviewed by Ric Edelman on the Feb. 21, 2009, show and by Jean Chatzky on her Feb. 23, variables affect retirement annuity and employment-based pension income. Further details are The ASEC Partners Meeting on April 15, 2009, will be at the Securities and Exchange Commission. A Issue Brief also calculates how long it might take for end-of-year 2008 401(k) balances to recover to sufficient asset accumulation to enable retirement, and not outliving one’s assets. The analysis looks available from 2009, show. Both Ric and Chapter 8 of EBRI’s Databook Jean promoted the Americ on Employ a Saves ee Benefits Week and discussed savings tips . with Draft Agenda has been developed. You can register on-line. For more information, e-mail their beginning-of-year 2008 levels. It also looks at the distribution of equity concentrations by age specifically at lessons learned with respect to offering workers choice, financial incentives, and more me. mcdonnell@asec.org and shows that nearly 1 in 4 participants between ages 56–65 had more than 90 percent of their information and education. This is compared with the early evolution in CDHPs, where the evolution • On the PBS Lehrer NewsHour, correspondent Paul Solman interviewed me for the Feb. 19, 2009, account balances in equities at year-end 2007. was still being driven solely by the market and not by legislation or recent empirical behavioral show in a segment titled “The Amazing Adventures of Savings Man,” which focused on the difficulty For those getting this report in paper format: The electronic version has hotlinks to dozens of reports research. of getting the savings message out in the mass media and featured many of the Savingsman™ PSAs. and other Web sites cited below. Go to www.ebri.org/publications/index.cfm?fa=presidentReport