terminatin g DC plans on retirement income adequacy for American households. This study is an important step in analyzing the pivotal role DC plans play in retirement security.” For Immediate Release It should be noted that this study was devoted specifically to analyzing the present values of retirement deficits. While this output metric may be preferred for public policy analysis focusing on retirement Contact: income adequacy, it actually masks much of the impact of the two scenarios analyzed in this Issue Brief. For example, when evaluating the impact of a universal defined contribution system, to the extent that Betsy Jaffe a household was NOT simulated to run short of money in retirement under the baseline, increasing their Director, Marketing and Public Relations access to an employer-sponsored defined contribution plan will not change their simulated retirement Employee Benefit Research Institute deficit (it will remain zero). EBRI has developed alternative output metrics during its analysis of press-media@ebri.org Rothification proposals in 2017 and will apply them to these scenarios in a future Issue Brief. 202.775.6347 To conduct this study, the author used the EBRI Retirement Security Projection Model,® which was devel R oe pti ed t rem o pr eno t vIid nc e ome an as A sess deq mu ent acy f of na or tio Yon ual r nge et rire W m or ent ke inco rs, Sin me g pro le W sp ome ects. nO M ver osthe t Im yp ears act it ed h as by been enhanced to be able to model the impacts of defined benefit plan freezes and automatic Presence and Absence of Defined Contribution Plans, EBRI Projects enrollment provisions for 401(k) plans as well as the crises in the financial and housing markets from 2007–2009. The model reflects retirement readiness and average individual retirement deficits as well Washington, D.C. – June 13, 2019 – A new study from the Employee Benefit Research Institute finds as aggregate deficits. It is able to project retirement savings by various age, tenure, gender, and marital younger workers and single women’s prospects for requirement income adequacy are the most status cohorts. impacted by the presence or absence of defined contribution (DC) Plans. The study, “Alternative Realities: The Impact of Extreme Changes in Defined Contribution Plans on The EBRI Issue Brief, “Alternative Realities: The Impact of Extreme Changes in Defined Contribution Plans Retirement Income Adequacy in America,” is available at www.ebri.org. on Retirement Income Adequacy in America,” examines the effect on retirement income adequacy for various cohorts of American households if DC retirement plans are either completely eliminated (worst case) or made universally available (best case). The study finds that under both scenarios, the youngest age cohort and single females would experience the largest change in retirement income adequacy. About EBRI The results are significantly greater for younger cohorts, since they would experience the best or worst The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute based in case for a longer period. In the scenario in which defined contribution retirement plans were completely Washington, DC, that focuses on health, savings, retirement, and financial security issues. EBRI does not eliminated, the retirement deficits of those aged 35–39 were projected to increase 23 percent from lo $4 b 9 b ,1 y and 82 to d $ o6 es 0,2 n5 o3 t .tak Ine cp oo m lip cy ari po sositio n, th ne s. deficits The wo o rk f to hf oEB se RI is ages m 4ad 0–e 4 po 4 w ssib ould le incr by fu ease ndin 1g 8 fro perc m i ent, ts while deficits of those ages 45–49 would increase by 13 percent. The average deficits for households above members and sponsors, who include a broad range of public, private, for-profit and nonprofit age 50 would increase by less than 10 percent. organizations. For more information visit www.ebri.org In the best case scenario of universal coverage, average retirement deficits would decrease 24 percent from $49,182 to $37,506 for the youngest age cohort. Older cohorts would experience less of an impact, with deficits of those ages 40–44 projected to decrease 19 percent; deficits of those ages 45–49 would decrease 16 percent; and deficits of those ages 50–54 would decrease 12 percent. The average deficit for households above age 55 would decrease, but by less than 10 percent. The results also found that under the universal defined contribution plan scenario, of those in the youngest cohort, the increase in average deficits is significantly larger for single females at $13,285 and single males at $11,690, versus other marital cohorts. At older ages, the impact of universal DC plans for single males is similar to that found for widows, but a universal DC plan scenario would be most beneficial to the single females. “In recent years there have been a number of policy proposals that call into question the value of existing defined contribution plans,” said Jack VanDerhei, EBRI Research Director and author of the study. “However, the suggested alternatives have not included a detailed analysis of the impact of