Plan Sponsor No Plan EBRI Books/Special Reports: Fronstin, Paul and Celia Silverman. Y Olsen, Kelly Silverman, Celia. • • akoboski, Paul, Paul Fronstin, Sarah Snider Issue Brief, Employee-related reasons are most often cited as the most important factor for not offering a plan, What would lead to increased plan sponsorship? Nonsponsors were read a list of items and asked if , and Jack V no. 157 (Employee Benefit Research Institute, January 1995). “Private T anDerhei. rusteed Pension STA “Defined Contribution Plan Dominance Grows TEMENT BY DALLAS SALISBUR W “IRA itness Disclosure Statement, and Keogh Assets Reach $2.5 T , Annmarie Reilly Assets Grew 19 Percent During 1993. , David Scheer rillion by End of Third Quarter 1993. Y , Bill Custer Across Sectors and Employer , and Sarah Boyce. ” EBRI Notes, ” EBRI no. Bibliography of EBRI Research on Retirement Issues EBRI and Matthew Greenwald & Sizes, While Mega Defined Benefit Plans Remain Strong. Notes, “ 10 (Employee Benefit Research Institute, October 1994): 1 Employment-Based Retirement Income Benefits: any would make them seriously consider sponsoring a retirement plan. The highest percentage, and business-related reasons, such as profitability no. 2 (Employee Benefit Research Institute, February 1994): 5 Associates. “Retirement Confidence in Analysis of the , is also a main decision-driver ” EBRI Issue Brief, –3. April 1993 Current Population Survey –America: Getting Ready for T 7. no. 190 (Employee Benefit . This may explain omor- .” Age of Most Full-Time Employees EBRI pursuant to Clause 2(g)(4) of Rule XI of the Rules of the House: President and CEO, Employee Benefit Research Institute (EBRI) Andrews, Emily S. Jones, Nora Super Silverman, Celia. row Research Institute, October 1997). EBRI Special Report 69 percent, said an increase in business profits. Next, 65 percent said tax credits for starting a plan, why plan sponsorship rates remain low despite repeated legislative efforts to boost them. .” EBRI Issue Brief The Changing Profile of Pensions in America “, and Kathy Stokes Murray Factors Influencing Employer Contributions to Defined Benefit Plans. SR-25 no. 156 (Employee Benefit Research Institute, December 1994). /Issue Brief no. 153 (Employee Benefit Research Institute, September 1994). . “Reflecting on 1993: Benefits Issues T . Washington, DC: Employee Benefit Research ake New Shape. ” EBRI Notes, ” EBRI no. 9 T - 125 Public Opinion Surveys: Under age 30 15% 27% Institute, 1985. Y Y Yakoboski, Paul. akoboski, Paul and akoboski, Paul, and Celia Silverman. Notes, (Employee Benefit Research Institute, September 1994): 1 and 52 percent said reduced administrative requirements. no. 1 (Employee Benefit Research Institute, January 1994): 1 “Large Plan Lump-Sums: Rollovers and Cashouts, Annmarie Reilly. ““ Salary Reduction Plans and Individual Saving for Retirement. Baby Boomers in Retirement: What EMPLOYEE –4. ” EBRI Issue Brief, –7. Are Their Prospects? no. 188 (Employee ” EBRI ” EBRI 30–39 years 53 38 The Witness: Committee on Small Business _______. What Do Small Employers Know Silverman, Celia. Silverman, Celia. Benefit Research Institute, Issue Brief Special Report Pension Policy and Small Employers: At What Price Coverage? no. 155 (Employee Benefit Research Institute, November 1994). ““ SR- 23 IRA Income of the Elderly Continues to Change. and Keogh /Issue Brief August 1997). About Retirement Plans? Assets Reach $773 Billion at no. 151 (Employee Benefit Research Institute, July 1994). BENEFIT ” Y EBRI Notes, ear W -End 1992. ashington, DC: Employee Benefit no. 8 (Employee Benefit Research ” EBRI Notes, no. 11 (Employee Ages 40 and older 27 33 The 2000 Retirement Confidence Survey (RCS) Dallas Salisbury is president and CEO of the Employee Benefit Research Institute (EBRI), Washington, DC. Research Institute, 1989. Olsen, Kelly Y Boyce, Sarah. akoboski, Paul, Paul Fronstin, Sarah Snider Benefit Research Institute, November 1993): 5. Institute, , and Jack V August 1994): 5 “Questions and anDerhei, Dallas L. Salisbury –8. Answers on Employment Benefit Issues. , Annmarie Reilly RESEARCH . “A Framework for , David Scheer ” EBRI Issue Brief Analyzing and Comparing Social , Bill Custer, and Sarah Boyce. no. 150 (Employee Factors That Would Make Non-sponsors Serious Consider Sponsoring a Plan March 28, 2001 The exercise of trying to figure out how much you need to save for retirement can put you ahead in the savings Salisbury has headed the Institute since its founding in 1978. • Many nonsponsors are unfamiliar with the different retirement plan types available to them as Annual Salary of Most Full-Time Employees ® Employee Benefit Research Institute. Silverman, Celia, and Paul Pemberton, Carolyn Piucci. Security Policies. “ Benefit Research Institute, June 1994). Employment-Based Retirement Income Benefits: ” EBRI Issue Brief Y“akoboski, Kathy Stokes Murray Majority of What Is the Future for Defined Benefit Pension Plans? no. 183 (Employee Benefit Research Institute, March 1997). Americans Support Social Security INSTITUTE Analysis of the . “PBGC Reform Proposed in Retirement Protec- April 1993 Current Population Survey , But Confidence Is Low Washington, DC: , According .” game, according to results of the 2000 Retirement Confidence Survey (RCS) released today. Workers who have potential plan sponsors, especially the options created specifically for small employers, which are Less than $20,000 9% 34% Mr. Chairmen and members of the committee: I am Dallas Salisbury An increase in business profits. , president and CEO of the Employee Benefit 69% Employee Benefit Research Institute, 1989. Scott, Jason, and John B. Shoven. Saltford, Nancy EBRI Issue Brief tion to New EBRI/Gallup Survey Act of 1993. , and Sarah Snider ” no. 153 (Employee Benefit Research Institute, September 1994). EBRI Notes, .” EBRI Notes, no. 1 . “Lump Sum Distributions: Fulfilling the Portability Promise or Eroding “Characteristics of the Part-T 1 (Employee Benefit Research Institute, November 1993): 1 no. 6 (Employee Benefit Research Institute, June 1994): 10. ime Work Force.” EBRI Special Report –4. SR- attempted such a calculation appear to be doing a better job of preparing for retirement than those who have not. $20,000–$40,000 71 56 designed to be less costly to establish and administer. One-third (33 percent) of nonsponsors said Tax credits for starting a plan. 65 Research Institute (EBRI), a nonprofit research and education organization located here in Washington, DC. EBRI Schieber Y Silverman, Celia. Salisbury akoboski, Paul, and Celia Silverman. Retirement Security? 22, Sylvester J., and Patricia M. George /Issue Brief , Dallas L. and Celia Silverman. “ no. 149 (Employee Benefit Research Institute, May 1994). Total Private and Public Pension ” EBRI Issue Brief “Baby Boomers in Retirement: What “. Retirement Income Opportunities in an Aging America: Coverage Social Security and Medicare Programs Face Reform. no.178 (Employee Benefit Research Institute, October 1996). Assets Reach $4.4 Trillion by Are Their Prospects? Year-End 1992.””” EBRI Notes, EBRI Issue EBRI Notes, —May 16, 2000 EBRI press release Over $40,000 17 7 A plan with reduced administrative requirements. 52 they have never heard of the savings incentive match plan for employees (SIMPLE) created specifi- The Organization: does not lobby or advocate for or against legislative proposals. Our work is intended to assist in evaluating poten- and Benefit Entitlement. Boyce, Sarah. Yakoboski, Paul and Sarah Boyce. Brief, no. 6 (Employee Benefit Research Institute, June 1993): 4 no. 6 (Employee Benefit Research Institute, June 1994): 1 no. 151 (Employee Benefit Research Institute, July 1994). “Questions and Washington, DC: Employee Benefit Research Institute, 1981. Answers on Employee Benefit Issues. “Pension Coverage and Participation Growth: – –6. 6. ” EBRI Issue Brief A New Look at Primary and no. 150 (Employee Availability of easy-to-understand information. 50 cally for small employers, and an additional 19 percent report that they are not too familiar with tial results of proposals made by others. EBRI is a private, nonprofit, nonpartisan public policy research organization based in Washington, DC. Educational Level of Most Full-Time Employees Boyce, Sarah. Piucci, Carolyn. Boyce, Sarah. Benefit Research Institute, June 1994). Supplemental Plans. ““Pensions and Social Security Income, 1984 Questions and “Public ” Attitudes on Investment Preferences EBRI Issue Brief, Answers on Employee Benefit Issues. no. 144 (Employee Benefit Research Institute, December 1993). –1991. –Results of New EBRI/Gallup Survey ” EBRI Notes, ” EBRI Issue Brief no. 4 (Employee Benefit Re- no. 150 (Employee .” EBRI Demand from employees. 49 • The 2000 Minority RCS, which oversamples respondents in three minority groups (African-Ameri- SIMPLE plans. The same holds for simplified employee pensions (SEPs); 54 percent of nonsponsors High school or 38% 55% Founded in 1978, its mission is to contribute to, to encourage, and to enhance the development of sound Allowing key executives to save more in a retirement plan. 5 Y Silverman, Celia. akoboski, Paul. Benefit Research Institute, June 1994). Notes, search Institute, no. 5 (Employee Benefit Research Institute, May 1993): 7. ““ Retirement Program Lump-Sum Distributions: Hundreds of Billions in Hidden Pension Pension Evolution in a Changing Economy April 1994): 9–10. .” EBRI Special Report SR-17/Issue Brief no. 141 cans, Hispanic-Americans, and Asian-Americans) as part of the Retirement Confidence Survey, It is my pleasure to appear before you today to discuss retirement plan sponsorship report that they have never heard of SEPS, and an additional 16 percent said they are not too —and non-sponsorship — Some college 34 32 EBRI Publications: Pensions employee benefit programs and sound public policy through objective research and education. EBRI does not Lengthening of vesting requirements. 27 Saltford, Nancy Pemberton, Carolyn Piucci. Income. (Employee Benefit Research Institute, September 1993). ” EBRI Issue Brief, , and Sarah Snider “Americans no. 146 (Employee Benefit Research Institute, February 1994). . “Characteristics of the Part-T Are Saving for Retirement at Early ime Work Force Ages, –According to New EBRI/ Analysis of the March 1993 shows many similarities as well as differences about retirement confidence, preparations and plan- College degree or more 27 11 among small (100 or fewer) employees. EBRI has studied this issue extensively familiar with SEPs. By comparison, very few nonsponsors said they have never heard of or are not Committee on Small Business . Since 1998, we have conducted an Other. 10 lobby and does not take positions on legislative proposals. EBRI-ERF Staff. Anzick, Michael. Current Population Survey Gallup Survey“ .“” Demographics and Employment Shifts: Implications for Benefits and Economic Security Pension Fund Portfolio T EBRI Notes, .” EBRI Special Report no. 4 (Employee Benefit Research Institute, urnover and Performance Evaluation, SR-22/Issue Brief no. 149 (Employee Benefit Research April 1994): 12. ” EBRI Issue Brief no. 143 .” ning for retirement among individuals in these minority groups. Overall, the Minority RCS found annual Small Employer Retirement Survey (SERS) to explore small employer retirement plan sponsorship too familiar with 401(k) plans. • Retirement Income Silverman, Celia. (Employee Benefit Research Institute, November 1993). Institute, May 1994). EBRI Issue Brief, Length of “IRA no. 140 (Employee Benefit Research Institute, Time Most Full-Time Emplo and Keogh Assets Reach $775 Billion at yees YearAugust 1993). -End 1992.” EBRI Notes, no. 11 (Employee that Hispanic-Americans tend to be less confident that they will have enough money to live comfort- United States House of Representatives decisions. The survey is sponsored by EBRI, the The Education and Research Fund (ERF), established in 1979, performs the charitable, educational, and American Savings Education Council, and Matthew Greenwald & Stay With Company Salisbury Yakoboski, Paul. Benefit Research Institute, November 1993): 5. , Dallas L. “Retirement Program Lump-Sum Distributions: Hundreds of Billions in Hidden Pension “Pension Tax Expenditures: Are They Worth the Cost?” EBRI Issue Brief no. 134 (Em- ably throughout their retirement years than are other groups. Associates. scientific functions of the Institute. EBRI-ERF is a tax-exempt organization (under IRC Sec. 501(c)(3)) sup- Why Do Small Employers Sponsor Retirement Plans? EBRI Issue Briefs Less than 3 years 13% 34% Plan Type Asked of Nonsponsors Never Heard Of Not Too Familiar With EBRI Notes Piucci, Carolyn. ployee Benefit Research Institute, February 1993). Income.” EBRI Issue Brief “Public Attitudes on Retirement Planning no. 146 (Employee Benefit Research Institute, February 1994). –Results of New EBRI/Gallup Survey.” EBRI Notes, —May 16, 2000 EBRI press release ported by contributions and grants. EBRI-ERF is not a private foundation (as defined by IRC Sec. 509(a)(3)). Between 3 and 9 years 56 38 Copeland, Craig, and Jack VanDerhei. “Personal Account Retirement Plans: An Analysis of the Survey of Salisbury Yakoboski, Paul. no. 7 (Employee Benefit Research Institute, July 1993): 9. , Dallas L. “Worker Decisions in the Federal Thrift Savings Plan. “Pension Tax Expenditures: Are They Worth the Cost? ” EBRI Notes, ” EBRI Issue Brief no. 2 (Employee Benefit no. 134 (Em- The bulk of my testimony today will focus on the results of the 2000 Small Employer Retirement Survey, the most 10 years or more 30 24 • Several reasons are cited by those that do, but the top two are: SIMPLE plans 33% 19% Consumer Finances.” EBRI Issue Brief no. 223 (Employee Benefit Research Institute, July 2000). Hearing EBRI Notes Yakoboski, Paul. ployee Benefit Research Institute, February 1993). Research Institute, February 1996): 4 “New Evidence on Lump-Sum Distributions and Rollover –7. Activity.” EBRI Notes, no. 7 (Em- recent we have analyzed. Results of the 2001 SERS will be released this June. • The 1999 Women’s Retirement Confidence Survey (WRCS), also an oversample of the Retirement Simplified employee pensions (SEPs) 54 16 The competitive advantage for the company in employee recruitment and retention; and Salisbury, Dallas L., and Ruth Helman, Pamela Ostuw, Paul Yakoboski. “Retirement Confidence Survey 2000. on Y Yakoboski, Paul. akoboski, Paul. ployee Benefit Research Institute, July 1993): 6 ““IRAs: Benchmarking for the Post-TRA IRA Eligibility and Usage.” EBRI Notes, –8. ’97 W no. 4 (Employee Benefit Research Institute, orld.” EBRI Notes, no. 12 (Employee Benefit April Confidence Survey 401(k) plans . A majority of American women are saving for their retirement and are confident 2 8 The positive effect on employee attitude and performance. Including Results from the RCS Minority Survey and the Small Employer Retirement Survey.” EBRI Issue EBRI-ERF has a number of programs: EBRI Notes Yakoboski, Paul. Research Institute, December 1998): 1 1995): 5–7. “Worker Attitudes Toward Retirement Financial Planning. –3. ” EBRI Notes, no. 6 (Employee Pension Reform for Small Business of their retirement prospects, but more is still needed to ensure they will be able to afford life after Obstacles to Plan Sponsorship Brief no. 222 (Employee Benefit Research Institute, June 2000). • The conclusion: many small employers simply lack information, or are even misinformed, about American Savings Education Council Small Employer Retirement Survey Findings Fronstin, Paul. Fronstin, Paul. McDonnell, Kenneth. Benefit Research Institute, June 1993): 1 ““IRA IRA and Keogh Assets Grew by 23 Percent During 1997. “Benefit Participation High Asset Grew by 16 Percent During 1996. –4. Among Employees of State and Local Government, ” EBRI Notes, ” EBRI Notes no. 12 (Employee Benefit Research , no. 12 (Employee Benefit According work, according to a new survey by the nonpartisan Employee Benefit Research Institute (EBRI). • Sponsors are convinced, or have been convinced, that there are direct business benefits to the em- ® Yakoboski, Paul. “Retirement Plans, Personal Saving, and Saving Adequacy.” EBRI Issue Brief no. 219 (Em- retirement plan options and what plan sponsorship actually entails. The majority of small employers Choose to Save Education Program • There are a number of reasons that come up in the Small Employer Retirement Survey on why more Piucci, Carolyn. Institute, December 1998): 3 Research Institute, December 1997): 1 to Latest BLS Survey “Public Attitudes on Investment Preferences .” EBRI Notes, –7. no. 1 –3.1 (Employee Benefit Research Institute, November 1994): 3 –Results of New EBRI/Gallup Survey.” EBRI –5. —Feb. 2, 1999 EBRI press release ployer from sponsoring a retirement plan. Comparative Profiles: Companies With Retirement Plans and Those Without Plans ployee Benefit Research Institute, March 2000). without plans are largely unfamiliar with the plan options that have been created specifically for Consumer Health Education Council small employers do not offer retirement plans—it is not simply a matter of administrative cost and Y Conte, Christopher Silverman, Celia. akoboski, Paul, and Bill Pierron. Notes, no. 5 (Employee Benefit Research Institute, May 1993): 7. “Income of the Elderly Continues to Change. . “Retirement Prospects in a Defined Contribution W “IRAs: It’s a Whole New Ballgame. ” EBRI Notes, ” EBRI Notes, orld: no. 8 (Employee Benefit Research A Report on EBRI no. 9 (Employee Benefit ’s April 30, 1997, Yakoboski, Paul, and Pamela Ostuw, Bill Pierron. “The 1999 Small Employer Retirement Survey: Building a them. Defined Contribution Research Program burden. The survey asked small employers to identify the most important reason for not sponsoring VanDerhei, Jack. Research Institute, September 1997): 1 Policy Forum. Institute, August 1994): 5 ”“ EBRI Notes, Implications of Lowering the Compensation Limit for Qualified Retirement Plans. –8. no. 7 (Employee Benefit Research Institute, July 1997): 1 –4. –3. ” EBRI • Small employers that sponsor retirement plans tend to be distinctly different from small employers The 2000 Small Employer Retirement Survey (SERS) Better Mousetrap Is Not Enough.” EBRI Issue Brief no. 212 (Employee Benefit Research Institute, August Fellows Program a plan, and to state whether a given reason was a Reasons for Offering a Retirement Plan “major” factor in evaluation. T Most Important Major Reason wenty-one percent Olsen, Kelly EBRI-ERF Staff. Fronstin, Paul. Notes, no. 5 (Employee Benefit Research Institute, May 1993): 1 . “Retirement “Dual Jobholders Less Likely to Have Health Insurance Coverage Than Single Jobholders. “Chilean Social Security Reform as a Prototype for Other Nations. Annuity and Employment-Based Pension Income. –4. ” EBRI Notes, ” EBRI Notes, no. 6 (Employee no. 8 (Em- ” without plans, in terms of revenue levels and the composition of their work force. Are small businesses saying “no” to a retirement plan for their employees before knowing all the facts? According 1999). • These findings suggest what the Health Confidence Survey Program “industry” has always said about retirement plans: they are sold, said that the most important reason was that employees prefer wages and/or other benefits. In fact, Piucci, Carolyn. Benefit Research Institute, June 1997): 4 ployee Benefit Research Institute, EBRI Notes, no. 8 (Employee Benefit Research Institute, “Public Attitudes on Social Security August 1997): 1 –6. , Results of Recent EBRI/Gallup Survey –5. August 1994): 1–3. .” EBRI Notes, no. 3 to the results of the 2000 Small Employer Retirement Survey (SERS) released today, nonsponsors may not be Competitive advantage for business in employee recruitment and retention. 35% 65% Copeland, Craig, and Jack VanDerhei, Dallas L. Salisbury. “Social Security Reform: Evaluating Current and not Health Security/Quality Research Program bought. Service providers must be sufficiently convinced of the prospect that small employ- our value of benefits surveys have found that 76 percent of workers who can have only one employee Y Conte, Chris. McDonnell, Kenneth. akoboski, Paul. (Employee Benefit Research Institute, March 1993): 6. “Assessing Social Security Reform “Understanding the Income of the Older Population. “Benefit Participation Low Alternatives: EBRI Among Small Independent Businesses, ’s December 4, 1996, Policy Forum. ” EBRI Notes, no. 7 (Employee Benefit According to a Recent ” EBRI • Small employers that offer retirement plans tend to have higher revenues than small employers that do aware of all the options available to them, or of the potential business advantages of offering a plan. Currently, Positive effect on employee attitude and performance. 21 64 Proposals. Latest Results of the EBRI-SSASIM2 Policy Simulation Model. Testimony of ” EBRI Issue Brief, no. 210 ers will be able to be sold on offering a plan to make the sales effort. Policy Forums benefit state a desire for health insurance. Eighteen percent of small employers say that the most Jones, Nora Super Research Institute, July 1996): 1 Notes, BLS Survey no. 2 (Employee Benefit Research Institute, February 1997): 1 .” EBRI Notes, . “Benefits Issues Evolve in the 102nd Congress. no. 7 (Employee Benefit Research Institute, July 1994): 5 –3. ” EBRI Notes, –6. no. 1 (Employee Benefit –6. not have retirement plans. less than half (46 percent) of full-time employees at small private establishments (100 or fewer workers) are Employers obligation to provide plan for employees. 13 36 (Employee Benefit Research Institute, June 1999). Retirement Confidence Survey Program important reason for not having a plan is the makeup of their work force, a large portion of workers Conte, Chris. Fronstin, Paul. Silverman, Celia. Research Institute, January 1993): 1 “The Changing W “IRA “Internal Revenue Service Data Provide and Keogh orld of W Assets Grew by 25 Percent During 1995. –ork and Employee Benefits. 5. A Look at Plan Creations and T ” EBRI Notes, ” EBRI Notes, no. 3 (Employee Benefit no. 12 (Employee erminations.” EBRI Tax advantages for employees. 8 40 participating in an employment-based retirement plan. Gruber Jonathan, and David Wise. “Social Security, Retirement Incentives, and Retirement Behavior: An Potential Motivators for Retirement Plan Sponsorship Retirement Security Research Program Dallas L. Salisbury are seasonal, part time, or high turnover Tax advantages for key executives . Twenty-four percent say that revenue is too uncertain to 5 27 Research Institute, March 1996): 1 Benefit Research Institute, December 1996): 3 Notes, no. 5 (Employee Benefit Research Institute, May 1994): 5 –3. –5. –7. —April 4, 2000 EBRI press release International Perspective. Employees demand or expect it. ” EBRI Issue Brief no. 209 (Employee Benefit Research Institute, May 1999). 5 27 Social Security Research Program commit to a plan or the business is too new. Cost and administration-related issues do matter, with • Participation and Coverage Rheem, Edina, and Ken McDonnell. Olsen, Kelly Silverman, Celia. . “Keeping T President and CEO, Employee Benefit Research Institute “Changes in DB and DC Plans Occurring Mainly rack of Social Security Reform Proposals: “Benefits Are a Substantial Component of T AAmong Small Plans. Summary.” EBRI Notes, otal Compensation. ” EBRI Notes, no. 11 (Employee ” EBRI no. 3 • The potential exists for increased plan sponsorship. Those likely to start a plan are somewhat more Approximate Gross Revenue in Previous Year Plan Sponsor No Plan Quinn, Joseph F Availability of emplo ., Boston College and EBRI Fellow yer tax deduction. . “Retirement Patterns and Bridge Jobs in the 1990s. 2 20 ” EBRI Education Programs—Policy Forums, Briefings, Round Tables 20 percent saying that it costs too much to set up and administer a plan; that required company Notes, Benefit Research Institute, November 1996): 1 (Employee Benefit Research Institute, March 1994): 1 no. 12 (Employee Benefit Research Institute, December 1995): 1 –8. –3. –4. The 2000 Value of Benefits Survey likely to report that the most important reason they don’t currently have a plan is revenue uncer- Issue Brief no. 206 (Employee Benefit Research Institute, February 1999). Publication Programs—printed and online contributions are too expensive; or that there are too many government regulations. For most, EBRI Issue Briefs Y Pierron, Bill. Pemberton, Carolyn Piucci. akoboski, Paul. “The Federal Budget Process. “Salary Reduction “Public Opinion on ESOPs Related to Other Benefit Issues, Arrangements as Primary Retirement Plans. ” EBRI Notes, no. 9 (Employee Benefit Research Institute, Septem- ” EBRI Notes, According to New no. 10 (Em- Less than $2 million 37% 70% EBRI conducted “value of employee benefits” surveys in 1991 and 1996 to determine the relative importance of tainty and less likely to say it is because a large portion of their workers are seasonal, part time, or Olsen, Kelly A., and Dallas L. Salisbury. “Individual Social Security Accounts: Issues in Assessing Administra- EBRI Issue Briefs, EBRI Notes, EBRI Databook on Employee Benefits, therefore, the financial reality of running a small business is the primary impediment to having a $2 million or more 41 16 Ostuw ber 1996): 1 ployee Benefit Research Institute, October 1995): 1 EBRI /Gallup Survey , Pamela, and Bill Pierron, Paul –5. .” EBRI Notes, no. 3 (Employee Benefit Research Institute, March 1994): 6 Yakoboski. “The Evolution of Retirement: Results of the 1999 Retire- –3. –7. different benefits to workers and to assess the role played by benefits in job choice and job change. Collaborating high turnover. This therefore suggests that continued improvement in their business conditions will tive Feasibility and Costs.” EBRI Special Report SR-34 and Issue Brief no. 203 (Employee Benefit Research Not reported 22 7 EBRI Health Benefits Databook, Fundamentals of Employee Benefit Programs, Policy Studies Implications for the Small Employer Issue plan. Conte, Chris. Salisbury Pemberton, Carolyn Piucci. ment Confidence Survey , Dallas L. “Comprehensive T “Employee Benefits in a Flat T .”“ Benefits Affect EBRI Issue Brief ax Reform: Implications for Economic Security and Employee Benefits. Americans no. 216 (Employee Benefit Research Institute, December 1999). ax or Consumption T ’ Job Decisions, According to New EBRI/Gallup Survey ax World.” EBRI Notes, no. 9 (Em- ” EBRI .” with WorldatWork, the survey was repeated in 1999. As earlier surveys have shown, employee benefits today allow them to consider starting a plan in the future. Washington, DC Institute, November 1998). Gruber Notes, ployee Benefit Research Institute, September 1995): 1 EBRI Notes, , Jonathan, and David W no. 6 (Employee Benefit Research Institute, June 1996): 1 no. 2 (Employee Benefit Research Institute, February 1994): 8. ise. “Social Security, Retirement Incentives, and Retirement Behavior: –11. –2. An remain “very important” in job selection, and workers continue to rank their health benefits as the most important • Major drivers of low retirement plan sponsorship among small employers relate to who they employ Yakoboski, Paul, and Pamela Ostuw. “Small Employers and the Challenge of Sponsoring a Retirement Plan: Y Campbell, Sharyn. McDonnell, Ken. akoboski, Paul. International Perspective. ““T BLS Survey Shows Decline in Group Health and Retirement Plan Participation. “ ax Reform and the Discipline of Employment-Based Relationship Plans. Sources of Income of the Elderly Population. ” EBRI Issue Brief no. 209 (Employee Benefit Research Institute, May 1999). ” EBRI Notes, no. 6 (Employee Benefit Re- ” EBRI Notes, ” EBRI no. 5 of several benefits. and the uncertainty of revenue flows. While issues of administrative cost and burden matter, they Likelihood of Starting a Plan in the Next Two Years Reasons for Not Offering a Retirement Plan Most Important Major Results of the 1998 Small Employer Retirement Survey.” EBRI Issue Brief no. 202 (Employee Benefit Contracts: Copeland, Craig, and Paul Fronstin, Pamela Ostuw (Employee Benefit Research Institute, May 1996): 5 Notes, search Institute, June 1995): 4 no. 8 (Employee Benefit Research Institute, –7. , Paul August 1993): 6 –7.Yakoboski. “– Contingent W 8. orkers and Workers in —June 2000 EBRI Notes are only part of the puzzle. Therefore, the solution is not simply “build it and they will come,” by Research Institute, October 1998). March 28, 2001 EBRI does not have any contracts with the federal government in 2001, and did not in 1999 or 2000. Fronstin, Paul. Berg, Olena. Alternative W “DOL to Launch Savings and Pension Education Campaign. “IRA ork and Keogh Arrangements. Assets Grew by 6 Percent During 1994. ” EBRI Issue Brief no. 207 (Employee Benefit Research Institute, March ” EBRI Notes, ” EBRI Notes, no. 1 no. 6 (Employee 1 (Employee Benefit Very likely 16% • Small employers offering retirement plans tend to employ different types of workers than those that do creating new types of retirement plans. Rather Employees prefer wages and/or other benefits , it is build it and make it attractive enough for 21% 38% Yakoboski, Paul, and Pamela Ostuw, Jennifer Hicks, Mathew Greenwald & Associates. “What Is Your Savings • Assets and Funding Research Institute, November 1995): 4 Benefit Research Institute, June 1995): 1 1999). Somewhat likely –6.–3. 23 1999 Youth and Money Survey A large portion of workers are seasonal, part time, or high turnover 18 40 not sponsor a plan service providers to decide to work at selling it so that small employers will make the sponsorship —their employees tend to be older, have higher earnings, have more formal education, Personality? The 1998 Retirement Confidence Survey.” EBRI Issue Brief no. 200 (Employee Benefit Re- Not too likely 29 Salisbury Conte, Chris. Yakoboski, Paul. , Dallas L. “Department of Labor Plans to Guide, Not Regulate, Employers in Providing Investment Educa- “Debuking the Retirement Policy Myth: Lifetime Jobs Never Existed for Most W “Employee Benefits in a Flat Tax or Consumption Tax World.” EBRI Notes, no. 9 (Em- orkers.” Revenue is too uncertain to commit to a plan. 13 45 Most American students feel confident in their money management skills, but many feel they need to know more and tend to remain with the company longer decision once the business reaches a certain level of profitability and stability . , and once retirement search Institute, August 1998). Not at all likely 31 The business is too new. 11 22 EBRI Issue Briefs tion. ployee Benefit Research Institute, September 1995): 1 EBRI Issue Brief ” EBRI Notes, no. 197 (Employee Benefit Research Institute, May 1998). no. 5 (Employee Benefit Research Institute, May 1995): 1 –11. –3. about financial issues, according to results of a recent survey published in the August edition of EBRI Notes by the planning and saving is more of a priority for the small employer’s workers Yakoboski, Paul, and Jennifer Dickemper It costs too much to set up and administer.. “Increased Saving but Little Planning: Results of the 1997 Retire- 9 33 V Murray Campbell, Sharyn, and Paul Yakoboski, Paul, and Jack V anDerhei, Jack, and Sarah Holden. , Kathy Stokes, and Paul anDerhei. Yakoboski, Dallas Salisbury Yakoboski. “401(Employee Benefit Research Institute, k) Plan “Worker Investment Decisions: “Congress Considers IRA . “The Challenge of Social Security and Medicare Expansion, An Analysis of Large 401(Employee ” EBRI Notes, Asset Allocation, no. 4 (Em- nonpartisan Employee Benefit Research Institute (EBRI). Significantly, the vast majority of students have finan- Required company contributions are too expensive. 8 43 ment Confidence Survey.” EBRI Issue Brief, no. 191 (Employee Benefit Research Institute, November 1997). Account Balances, and Loan Benefit Research Institute, k) Plan Data. ployee Benefit Research Institute, Funding.” EBRI Notes, no. 8 (Employee Benefit Research Institute, Activity in 1999. April 1995): 1 ” EBRI Issue Brief ” EBRI Issue Brief –5. no. 176 (Employee Benefit Research Institute, no. 230. (Employee Benefit Research August 1995): 1–5. cial courses offered at school, but barely a third have chosen to take the course. Overwhelmingly, students say • As the SERS finds, 39 percent of small employers without plans say they are very or somewhat likely Too many government regulations. 3 24 Salisbury, Dallas L. and Ken McDonnell, Edina Rheem. “The Changing World of Work and Employee Benefits.” Salisbury Fronstin, Paul. Institute, February 2001). August 1996). , Dallas L. “Pension “The Future Role of Pensions in Savings and Retirement Income. Assets Grow 2.3 Percent Between Second and Third Quarter 1994. ” EBRI Notes, ” EBRI Notes, no. 3 no.2 they depend on their parents for financial information. Vesting requirements cause too much money to go to short-term employees. 3 35 to start a plan in the next two years. The SERS provides data on what points these employers will EBRI Issue Brief, no.172 (Employee Benefit Research Institute, April 1996). V Yakoboski, Paul, and Jack V anDerhei, Jack, and Sarah Holden, Carol Quick. (Employee Benefit Research Institute, March 1995): 1 (Employee Benefit Research Institute, February 1995): 3 Don’t know where to go f anDerhei. or information on starting a plan. “Contribution Rates and Plan Features: “401(Employee Benefit Research Institute, k) Plan –3.–4. 2 An Analysis of Large 401(Em- 5 Asset —Aug. 16, 1999 EBRI press release primarily focus upon in making that decision. And, SERS provides guidance to policymakers as to Milne, Deborah, and Jack VanDerhei, Paul Yakaoboski. “Participant Educations: Actions and Outcomes.” EBRI Tax benefits for the owner are too small. 3 23 Salisbury Salisbury Allocation, ployee Benefit Research Institute, k) Plan Data. , Dallas L. , Dallas L. and Celia Silverman. Account Balances, and Loan “The Changing Employer Role in Retirement Security “Social Security and Medicare Programs Face Reform. Activity in 1998. ” EBRI Issue Brief, ” EBRI Issue Brief no. 174 (Employee Benefit Research .” EBRI Notes, no. 218. (Employee Benefit no. 2 (Employee ” EBRI Notes, The views expressed in this statement are solely those of the author and should not be attributed to the Employee what factors can be affected by public pension policy. Issue Brief, Other reasons. no. 169 (Employee Benefit Research Institute, January 1996).9 6 Research Institute, February 2000). Institute, June 1996). Benefit Research Institute, February 1995): 1 no. 6 (Employee Benefit Research Institute, June 1994): 1 –3. –6. Benefit Research Institute, its officers, trustees, sponsors, or other staff. The Employee Benefit Research Institute Milne, Deborah, and Jack VanDerhei, Paul Yakaoboski. “Can We Save Enough to Retire? Participant Educa- V Campbell, Sharyn. Salisbury Pemberton, Carolyn Piucci. anDerhei, Jack, and Russell Galer , Dallas L. “Hybrid Retirement Plans: The Retirement Income System Continues to Evolve. “Work Force Patterns and Pensions. “Americans Have More Confidence in Pensions and Savings Than in Social Secu- , Carol Quick, John Rea. ” EBRI Notes, “401(Employee Benefit Research Institute, k) Plan no. 1 (Employee Benefit Research ” EBRI is a nonprofit, nonpartisan, public policy research organization. tion in Defined Contribution Plans,” EBRI Issue Brief, no. 160 (Employee Benefit Research Institute, April Asset Special Report Institute, January 1995): 1 rity, According to New EBRI/Gallup Survey Allocation, SR-29/ Account Balances, and Loan EBRI Issue Brief, –3. no. 171 (Employee Benefit Research Institute, March 1996). .” EBRI Notes, Activity.” EBRI Issue Brief no. 5 (Employee Benefit Research Institute, May no. 205 (Employee Benefit Re- 1995). Milne, Deborah, and Jack V Greenwald, Mathew search Institute, January 1999). 1994): 7–8. , and Paul anDerhei, Paul Yakoboski. “Most Yakoboski. Americans “Participant Education: Are Confident About Retirement Security; Sizable Actions and Outcomes.” EBRI EBRI and Public Agenda. “Promises to Keep: Leaders and the Public Look at Saving and Retirement,” EBRI Issue Brief, Numbers Are no. 168 (Employee Benefit Research Institute, January 1996). Not.” EBRI Notes, no. 11 (Employee Benefit Research Institute, November 1994): 1–3. 10 13 12 11 8 4 1 2 9 3 6 7 5