2011 Issue Briefs

After a decade marked by two severe bear markets, 401(k) plan participants have adopted a more balanced approach to their portfolios, according to a report released today by the Investment Company Institute (ICI) and the Employee Benefit Research Institute (EBRI). Fears that younger participants in 401(k) plans would abandon stock investing are not borne out by the data, which suggest that greater use of target-date funds is helping workers keep their investing on track. EBRI Issue Brief Dec 21, 2011 52 pages

Enrollment in so-called “consumer-driven” health plans continued to grow in 2011, according to the 11th annual EBRI/MGA Consumer Engagement in Health Care Survey (CEHCS). In 2011, 7 percent of the population was enrolled in a consumer-driven health plan, or CDHP, compared with 5 percent a year ago. When children are included, about 21 million individuals with private insurance, representing about 12 percent of the market, were either in a CDHP or an HSA-eligible plan, the survey found. Press release EBRI Issue Brief Dec 13, 2011 28 pages

Retirement Age Expectations: Not only are older American workers (age 50 and over) expecting to work longer, but many now say they expect to never retire, according to EBRI. Data suggest the trend may be tied to the recent economic recession. Press release

Variation in Public Opinion on the Future of Employment-Based Health Benefits: Findings from the 2011 Health Confidence Survey-- The public remains in large part confident that employers and unions will continue to offer health coverage following enactment of the federal health reform law. According to results from the 2011 Health Confidence Survey, 57 percent of individuals with employment-based coverage are extremely or very confident that their employer or union would continue to offer health coverage. Press release 
 

EBRI Notes Dec 6, 2011 24 pages

Health Benefits: Even though employment-based health coverage is the primary source of health insurance coverage in the United States, long-term public confidence that employers and unions will continue to offer health coverage has fallen, according to findings by EBRI. Press release

Financial Literacy: New research by EBRI finds that the residents of New Hampshire and Alaska rank at the top of financial literacy and financial behavior, while residents of Louisiana and West Virginia rank at the bottom. Press release

EBRI Notes Nov 17, 2011 16 pages

Two recent proposals to change the existing tax treatment of 401(k) retirement plans, if enacted, are likely to result in lower account balances for many 401(k) participants, according to a new analysis by EBRI. EBRI Issue Brief Nov 9, 2011 24 pages

IRA and 401(k) Ownership

Participation of workers in individual-account 401(k)-type plans, which had grown sharply through the 1990s, leveled off from 2005 to 2009. Ownership of individual retirement accounts (IRAs), which had also risen significantly in the 1990s, experienced a slight decline from 2005 to 2009, according to a new report by EBRI. Press release

Health Coverage by Month

Since 1995, the percentage of workers both with and without health insurance coverage has tracked closely with the unemployment rate, according to a new analysis of monthly data by EBRI. While the link between employment and health coverage is well-documented, EBRI’s new report tracks the data on a monthly basis to show the direct correlation. Currently, despite signs of economic recovery from the 2008-2009 recession, employment-based health insurance coverage remains well below the levels of the 1990s. Press release

EBRI Notes Oct 13, 2011 20 pages

The portion of full-time, full-year workers age 21-64 who participated in an employment-based retirement plan remained stable at 54.5 percent in 2010, showing no appreciable drop from 2009 despite the continuing weakness in the economy, according to a new report by EBRI. This makes 2010 it only the second year in the last six years without a decrease. In general, workers in Midwestern, Mid-Atlantic, and Northeastern states had the highest levels of participation in employment-based retirement plans, while those in Southern and Western states had the lowest levels. EBRI Issue Brief Oct 11, 2011 44 pages

2011 Health Confidence Survey: Most Americans Unfamiliar With Key Aspect of Health Reform

One year after Congress passed its landmark health reform law, the American public remains largely in the dark about one of the key elements of the law—health insurance exchanges. And despite the deep divisions and partisanship over enactment of the health reform law, public opinion about the U.S. health care system itself is little changed: It has neither fallen nor increased as a result of passage of health reform. Press release

Is There a Future for Retirement?

With more older Americans remaining in the work force, retirement ages increasing for full benefits, and cutbacks looming in federal social insurance programs, the question is being asked: Is there a future for retirement in the United States? This article summarizes presentations and discussions at EBRI’s spring 2011 policy forum on that topic, which was explored by a broad range of experts who discussed a variety of key issues related to America’s aging work force and the implications of working longer. Press release

EBRI Notes Sep 27, 2011 16 pages

Most Americans who have health insurance still get it through their jobs, but employment-based health coverage continues to decline, according to a new report from EBRI. While employment-based health coverage is still the dominant source of health insurance in the United States, it has been steadily shrinking since 1994. EBRI Issue Brief Sep 26, 2011 36 pages

The Impact of Repealing PPACA on Savings Needed for Health Expenses for Persons Eligible for Medicare

New modeling by EBRI finds that Medicare beneficiaries with high levels of prescription drug use would have to save 30-40 percent more than they currently are to pay for higher drug costs if President Obama’s health reform law is repealed. Medicare beneficiaries with median prescription drug costs would not see any change in their savings targets, EBRI’s analysis finds. EBRI takes no position on whether or not the law should be repealed; rather, its analysis is designed to measure which groups would be affected and provide estimates of additional savings needed by those who would be affected if it was.

The Importance of Defined Benefit Plans for Retirement Income Adequacy

Baby Boomer and Generation X households that have a defined benefit (DB) pension plan accrual at retirement age are overall almost 12 percentage points less likely to be “at risk” of running short of money for basic needs and uninsured health costs in retirement, according to a new report by EBRI. The report finds that having a DB pension plan is particularly valuable for those with the lowest income in both age groups, but also has a “strong impact” on reducing at-risk rates for those in the middle class: Among those in the second- and third-income groups combined (covering middle-income workers), the combined relative at-risk reduction is almost 20 percent.

EBRI Notes Aug 31, 2011 24 pages

401(k) participants who invested in target-date funds (TDFs) overwhelmingly tend to stick with these investments over time, according to new research by EBRI. Just over 90 percent of 401(k) participants investing in TDFs in 2007 stuck with them through 2009. Using a proxy for the auto-enrollment status of participants, those identified as auto-enrollees were even more likely to have stayed with TDFs, at a rate over 95 percent. 401(k) participants who were younger and had lower account balances were more likely to use TDFs and to continue to use them. Those more likely to stop investing in TDFs were older, had longer tenure, or had higher account balances, although these participants overall stayed with TDFs at a high rate. EBRI Issue Brief Aug 30, 2011 24 pages

Tax Cap: A new analysis from EBRI finds that the National Commission on Fiscal Responsibility and Reform proposed tax reform for 401(k)-type retirement plans would cause the greatest reduction in retirement savings for both the highest- and lowest-income workers.

Union Health Insurance: Both union and nonunion employment-based health benefits were affected by the recent economic recession—but unionized worker health insurance coverage suffered less, according to a new analysis from EBRI.

EBRI Notes Jul 11, 2011 16 pages

A new analysis from EBRI finds that workers may prefer to enter insurance exchanges over keeping employment-based health coverage if the tax treatment for health benefits through work is eliminated or significantly cut back as part of the federal debt-reduction effort. EBRI Issue Brief Jul 7, 2011 24 pages

As various states grapple with reforming their public employee pension systems, the experience of how the federal government managed pension reform 25 years ago may provide some useful background to governors and state legislatures. This article takes a look at how the federal government handled pension reform and the political and legislative forces involved when Congress enacted the Federal Employee Retirement System Act of 1986. EBRI Issue Brief Jul 1, 2011 24 pages

Health coverage: The likelihood a worker will or will not have employment-based health benefits depends strongly on the strength of the economy and the unemployment rate. For instance, from December 2007–August 2009, while the most recent recession was underway, the percentage of private-sector workers with employment-based coverage in their own name fell from 60.4 percent to 55.9 percent. However, by December 2009, when the recession officially ended, the percentage slightly increased to 56.6 percent. Press release.

Annuities: Building on the May 2011 EBRI Issue Brief, this article analyzes how changes in longevity annuity prices and longevity risk affect retirement income adequacy of retirees facing three different types of risk—investment income, longevity, and long-term care risk.

EBRI Notes Jun 21, 2011 20 pages

A new study by EBRI finds that if Baby Boomers and Gen Xers delay their retirement past the age of 65, many of them still would not have adequate income to cover their basic retirement expenses and uninsured health care costs. The research also shows that even if a worker delays his or her retirement age into their 80s, there is still a chance the household will be “at risk” of running short of money in retirement. However, the chance of success for retirement adequacy improves significantly as individuals reach their late 70s and early 80s. EBRI Issue Brief Jun 7, 2011 36 pages

IRAs: This article provides the first detailed IRA asset allocation information from EBRI IRA Database,^TM the only database that is able to anonymously link individual IRA owners across multiple IRA providers. Press release

CDHPs: In the 10 years that consumer-driven health plans (CDHPs) have existed they have tended to attract participants who are better educated, healthier, and have higher incomes than people in traditional health plans, but in recent years, the income differences have begun to narrow. Press release

EBRI Notes May 24, 2011 24 pages

For new retirees wanting to ensure they don’t run short of money in retirement, two products offer a source of guaranteed lifetime income: immediate annuities (which immediately begin to generate lifetime income) and longevity annuities (which delay payments until the retiree hits an advanced age, such as 80 or 85). New research by the nonpartisan Employee Benefit Research Institute (EBRI) finds that, generally, either type would be effective at reaching desired income adequacy targets—especially for lower-income retirees. EBRI Issue Brief May 18, 2011 36 pages

In yet another measure of damage from the recent economic recession, new data from EBRI show that 2009 marked both the sharpest one-year decline in employment-based health coverage for working-age Americans, and also the first time in recent history that less than 60 percent of individuals under age 65 had health benefits through their job. EBRI Issue Brief Apr 27, 2011 20 pages

Health Benefits: The future of employment-based health programs in the wake of the 2010 November election and the enactment of the Patient Protection and Affordable Care Act (PPACA) was just one of the topics addressed by human resource and health policy experts at EBRI’s 67th Fall policy forum last December.

Future Eligibility in DC Plans: New research from the nonpartisan Employee Benefit Research Institute (EBRI) shows that being eligible to participate in a defined contribution retirement plan at work is a key factor in whether workers will have enough money to afford basic expenses and cover uninsured medical care in retirement.

EBRI Notes Apr 21, 2011 20 pages