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"The Impact of Repealing PPACA on Savings Needed for Health Expenses for Persons Eligible for Medicare," and "The Importance of Defined Benefit Plans for Retirement Income Adequacy"

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save 30-40 percent more than they currently are to pay for higher drug costs if President Obama’s health reform law is repealed.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 EBRI takes no position on whether or not the law should be repealed; rather, its analysis is designed to measure which groups would be affected and provide estimates of additional savings needed by those who would be affected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

Target-Date Fund Use in 401(k) Plans and the Persistence of Their Use, 2007-2009

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

"Capping Tax-Preferred Retirement Contributions: Preliminary Evidence of the Impact of the National Commission on Fiscal Responsibility and Reform Recommendations," and "Union Status and Health Care Coverage of Workers: The Impact of the Recession"

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

Twenty-Five Years After Federal Pension Reform

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

'Tracking Health Insurance Coverage by Month: Trends in Employment-Based Coverage Among Workers, and Access to Coverage Among Uninsured Workers, 1995-2009,' and 'How Changes in Longevity Annuity Prices and Longevity Risk Affect Retirement Income Adeq ..

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

The Impact of Deferring Retirement Age on Retirement Income Adequacy

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