Summary
The Impact of Modifying the Exclusion of Employee Contributions for Retirement Savings Plans From Taxable Income: Results from the 2011 Retirement Confidence Survey
RESTRICTING OR ENDING EXCLUSION OF EMPLOYEE CONTRIBUTONS FOR RETIREMENT SAVINGS PLANS FROM TAXABLE INCOME: In recent years, proposals have surfaced to reform the 401(k) system based on the assumption that higher-income individuals receive more tax-related benefits from these programs than do individuals in lower marginal tax brackets (as well as those who may pay no federal income taxes in a particular year). Some of these proposals have included modifications of the current federal income taxation treatment that excludes some or all of the contributions employees make to tax-qualified defined contribution plans.
WHO WOULD BE AFFECTED? Results from EBRI analysis from the 2011 Retirement Confidence Survey (RCS) finds that these proposals may have unintended consequences. Instead of reducing the contribution levels of those with larger taxable incomes (and hence higher marginal tax rates), the RCS results suggest that the categories of full-time workers most likely to reduce (in some cases completely) their contributions are those with the lowest household income; the lowest current amounts in savings and investments; the lowest educational levels; those who are single, never married or not married, or living with a partner; and those who work for small private organizations.
Employer and Worker Contributions to Account-Based Health Plans, 2006–2010
CONSUMER-DRIVEN HEALTH SURVEYS: This report presents findings from the 2010 EBRI/MGA Consumer Engagement in Health Care Survey, as well as earlier surveys, examining the availability of health reimbursement arrangement (HRA) and health savings account (HSA)-eligible plans (consumer-driven health plans, or CDHPs). It also looks at employer and individual contribution behavior.
EMPLOYER CONTRIBUTION LEVELS FALLING: The percentage of workers reporting that their employer contributes to the account was unchanged. But among those with an employer contribution, overall contribution levels have fallen.
INDIVIDUAL CONTRIBUTION LEVELS INCREASING: Individuals with employee-only coverage increased their contribution levels, but those with family coverage did not. Persons in lower-income households were more likely to report that they increased their contributions; however, those in higher-income households did not.