This page lists the three most recent items in each category with a link to past research in each category. These files are in pdf format and require Adobe Reader for viewing and printing.
Issue Briefs -- Updated November 6, 2008
October 2008 #322 - "Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 2007"
• Sponsorship rate—About 58 percent of all working-age (21–64) wage and salary employees work for an employer or union that sponsors a retirement plan. Among full-time, full-year wage and salary workers ages 21–64 (those with the strongest connection to the work force), just over 63 percent worked for an employer or union that sponsors a plan.
• Participation level—Among full-time, full-year wage and salary workers ages 21–64, 55 percent participated in a retirement plan.
• Trend: This is up from approximately 53 percent in 2006. Participation trends increased significantly in the late 1990s, and decreased in 2001 and 2002. In 2003 and 2004, the participation trend flattened out. The retirement plan participation level
subsequently declined in 2005 and 2006, before the significant increase in 2007.
• Age: Participation increases with age (63.9 percent for wage and salary workers ages 55–64, compared with 28.0 percent for those ages 21–24).
• Gender: Among all workers, men had a higher participation level than women, but among full-time, full-year workers, women had a higher percentage participating than men (57.0 percent for women, compared with 54.0 percent for men). Female workers’ lower probability of participation in the aggregate results from their overall lower earnings and lower rates of full-time work in comparison with males.
• Race: Hispanic wage and salary workers were significantly less likely than both white and black workers to participate in a retirement plan. The gap between the percentages of black and white plan participants that exists overall narrows when
compared across earnings levels.
• Geographic differences—Wage and salary workers in the South, West, and Southwest had the lowest participation levels (Florida had the lowest percentage, at 42 percent) while the upper Midwest and Northeast had the highest levels (Wisconsin had the highest participation level, at approximately 68 percent).
August 2008 #320 - "Lessons from the Evolution of 401(k) Retirement Plans for Increased Consumerism in Health Care: An Application of Behavioral Research"
• Retirement and health benefits following a similar evolution: The private sector’s shift away from “traditional” company-financed pension plans toward individual 401(k) accounts illustrates how benefit decision-making and responsibility have shifted from the employer to the worker. The current trend in health care design toward “consumer-driven” health plans illustrates the same trend with health benefits.
• Health plan design is encountering the same obstacles as 401(k)s did: Efforts to make workers more involved and responsible for their health benefits have run into the same problems that 401(k) plans did: Workers tend to delay or be disengaged from both retirement and health care decisions, these issues require long-term planning, and workers see both retirement and health care decisions as complex and difficult.
• Worker behavior is driving retirement plan design: Enactment of the Pension Protection Act of 2006, which encouraged the use “default” 401(k) enrollment and investment decisions and simplified choices, represents the strongest federal endorsement of retirement plan design based on worker behaviors.
• Behavioral research can help employers design health benefits: This report looks specifically at lessons learned in the retirement realm with respect to offering workers choice, financial incentives, and more information and education. This is compared with the early evolution of consumer-driven health plans, which are still being driven solely by the market and not by legislation.
July 2008 #319 - "EBRI 2008 Recent Retirees Survey: Report of Findings"
• Understanding how to achieve longer work lives: The 2008 Recent Retirees Survey was undertaken to better understand the tools and practices that might encourage workers to postpone their retirement and remain longer with their company.
• Why do people retire when they do? Respondents typically retired from employers for one of four reasons: retirement becomes affordable, lack of job satisfaction, a desire for more personal or family time, and/or their own health status.
• Narrow window for asking people to work longer: One of the major findings from the survey is that employers have a narrow window of up to two years in which they may be able to intervene to change retiring workers’ decisions by offering them incentives to remain with the company.
• Employers may just need to ask: Many retirees report they would have been open to an approach from their employer asking them to stay longer with the company. Sixty-one percent say they would have viewed the experience positively. Just 10 percent indicate they would have reacted negatively to an approach asking them to delay their retirement.
• Work incentives vary in appeal: The survey tested a total of 19 possible incentives that might encourage retiring workers to postpone retirement. Four of these appear especially likely to be successful:
• Half of retirees (48 percent) indicate that feeling truly needed for an assignment would have been extremely or very effective in encouraging them to delay their retirement. Moreover, of those ranking this as one of the top two most effective incentives, 72 percent say it might have prompted them to stay at least two more years with the company.
• Half of retirees with a defined benefit pension state receiving a full pension while working part time would have been effective in delaying their retirement (50 percent), and almost as many feel this way about receiving a partial pension while working part time (44 percent). Seven in 10 of those rating each among the top two most effective incentives report they
would likely have stayed at least two more years if it had been offered to them (72 percent for full pension, 71 percent for partial pension). However, this would necessitate a change in federal law and several other compensation-related incentives may be almost as compelling.
• Thirty-eight percent report that being able to work seasonally or on a contract basis would have been effective in encouraging them to delay retirement. Among those rating this as one of the top two incentives, more than three-quarters (77 percent) say it might have prompted them to stay two years or more with the company.
Past EBRI Issue Briefs on retirement and savings
EBRI Notes -- Updated September 17, 2008
September 2008 -- IRA Assets and Contributions
• IRAs are the largest repository of U.S. retirement wealth: Total IRA assets are larger than those accumulated in either private-sector defined benefit (pension) plans or defined contribution (401(k)-type) plans. At year-end 2007, IRAs held $4.75 trillion, private-sector defined contribution (401(k)-type) plans held $3.49 trillion, and private-sector defined benefit plans held $2.33 trillion. IRA growth continues to be fueled by rollovers from other types of retirement plans, not new contributions.
• Mutual funds hold most IRA assets: There has been a big shift in market share in IRA assets over the past quarter-century, with mutual funds and brokerage accounts now dominant. Mutual funds held 47 percent of IRA assets at year-end 2007, followed by brokerage accounts (38 per-cent). Life insurance companies (8 percent) and banks/thrifts (7 percent) split the remainder.
• Traditional IRAs still hold most assets: About 90 percent of all IRA assets are held in traditional (taxable on withdrawal) IRAs, but most contributions are going into Roth (untaxed at withdrawal) and other types of IRAs.
August 2008 -- "Saving for Health Care in Retirement: The Use of Health Savings Accounts"
• Use of HSAs: Health savings accounts (HSAs) are tax-favored individual accounts that can be used to cover health insurance premiums and out-of-pocket expenses for health care services, and a possible vehicle for funding future retiree health care costs.
• HSA potential is limited: Statutory contribution limits make it unlikely that these accounts will play more than a minor part in savings for health care costs in retirement. The maximum savings that can be accumulated in an HSA will be far from sufficient to fully cover the savings needed in retirement for insurance premiums and out-of-pocket expenses, especially since individuals can (and may need to) use HSA assets to pay for health care services during their working years or to pay COBRA premiums and insurance premiums during periods of unemployment.
July 2008 -- "EBRI Policy Forum: Defined Contribution Plans in a Post-PPA Environment"
• May 2008 policy forum: The Employee Benefit Research Institute (EBRI) devoted its May 2008 policy forum to an examination of defined contribution plans in the wake of the Pension Protection Act of 2006 (PPA), which had far-reaching effects on 401(k)-type retirement savings plans. Early results indicate PPA is, in fact, beginning to achieve the growth in automatic 401(k) enrollment and savings that its sponsors predicted.
• PPA’s “automatic” provisions getting the attention: Nearly two years after PPA became law, it is the legislation’s “automatic” provisions—automatically enrolling new workers in their employer’s 401(k) plan, automatically putting their contributions into “default” investments, and automatically increasing their annual contributions—that are receiving most attention by retirement professionals.
• Known problems with voluntary enrollment: Experience and research has long shown that when 401(k) enrollment is voluntary and workers must actively decide to take part in the savings plan, a significant number fail to enroll, or, if they do, to save and diversify appropriately. Enactment of PPA was designed to overcome workers’ indecisiveness and inaction by automating their participation, savings, and diversification in the employer’s retirement plan.
Key points of policy forum presenters:
• Automatic enrollment can nearly double participation in some defined contribution plans.
• An increasing number of employers, especially large employers, are adopting automatic enrollment.
• Eliminating the company match in a 401(k) plan seems to have only a modest impact on automatic enrollment.
• Workers appear to be much more willing to accept automatic enrollment today than they were in the 1990s.
• Defined contribution (401(k)-type) retirement plans are becoming popular in many countries worldwide.
Past EBRI Notes articles on retirement and savings
Fast Facts from EBRI -- Updated November 6, 2008
November 6, 2008 “State-by-State Participation in 401(k)-Type Plans”
September 24, 2008 “Gen X and Gen Y Self Description: ‘Hard-Working’”
September 17, 2008 “When Do Gen X and Gen Y Americans Expect To Retire?”
Past Fast Facts from EBRI on retirement and savings
EBRI Surveys -- Updated November 6, 2008
October 2008 - "The 2008 Health Confidence Survey: Rising Costs Continue to Change the Way Americans Use the Health Care System" -- 11th annual HCS: Findings from the 2008 Health Confidence Survey (HCS) continue to demonstrate that rising health care costs are connected to changes in the way that Americans are using the health care system. Most Americans continue to view the country’s overall health care system negatively, feeling it needs a major or even a complete overhaul.
Additional information is at 2008 Health Confidence Survey.
April 2008 - "The 2008 Retirement Confidence Survey: Americans Much More Worried About Retirement, Health Costs a Big Concern" -- Americans’ confidence in their ability to afford a comfortable retirement has dropped to its lowest level in seven years, reflecting worries about health costs, the economy, and home values, according to the 18th annual Retirement Confidence Survey® (RCS). Decreases in confidence occurred across all age groups and income levels but were particularly acute among younger workers and those with lower income.
Additional information is at 2008 Retirement Confidence Survey.
March 2008 - "Preparing for Their Future: A Look at the Financial State of Gen X and Gen Y" -- Members of Generations X and Y, acknowledging that they need to pick up the slack when it comes to planning for their futures, are thinking about retirement and have defined financial goals according to a report released today by the American Savings Education Council (ASEC) and the Divided We Fail group (AARP, Business Roundtable, National Federation of Independent Business and the Service Employees International Union).
The on-line survey of 1,752 individuals between the ages of 19-39 was conducted between January 4 and 24, 2008.
Past EBRI Surveys on retirement and savings
Databook -- see chapter for when last updated.
Chapter 6 -- Income Statistics of the Population Ages 55 and Over - Data is presented here on the following: percentage of the older population in poverty; real median income of the older population by gender; median and mean income of the population by education, marital status and race; real median income by age and source of income; comparison of the measurement of retirement income between the Current Population Survey, Annual Social and Economic (March) Supplement and the National Income and Product Accounts of the United States. The end of the chapter contains a reference section to other EBRI research on income statistics of the population ages 55 and over in a question and answer format.
Chapter 7 -- Sources of Income for Persons Ages 55 and Over - Data is presented here on the following: percentage distribution of population and income by detailed income source, mean income, and median income; aged income from private sector and public sector defined benefit plans; private sector and public sector defined benefit plans by age of recipient; median income from major sources, married couples and unmarried individuals aged 65 and over; percentage of individuals aged 55 and over with income from specified sources and percentage distribution of income from all sources by age; percentage of individuals aged 65 and over with income from specified sources and percentage distribution of income from all sources by income quintile. The end of the chapter contains a reference section to other EBRI research on sources of income for persons ages 55 and over in a question and answer format.
Chapter 8 -- Retirement Annuity and Employment-Based Pension Income - Data is presented here on the following: percentage receiving, median, and mean amount of retirement annuity and/or employment-based pension income recipiency. The data is presented for the following demographics: age, sex, industry, education, marital status, and income quintile. The end of the chapter contains a reference section to other EBRI research on retirement annuity and employment-based pension income in a question and answer format.
Chapter 9 -- U.S. Savings Rates - Data is presented on two government measurements of the personal savings rate in the United States, the National Income and Product Accounts of the United State and the Flow of Funds Accounts of the United States. The end of the chapter contains a reference section to other EBRI research on personal savings in a question and answer format.
Chapter 10 -- Aggregate Trends in Defined Benefit and Defined Contribution Retirement Plan Sponsorship, Participation, and Vesting - Data in this chapter is drawn from four sources: U.S. Department of Labor, Bureau of Labor Statistics, National Compensation Survey; U.S. Department of Labor, Employee Benefit Security Administration, Tabulations off the Form 5500; U.S. Department of Commerce, Bureau of the Census, Current Population Survey, Employee Benefit Supplement and Survey of Income and Program Participation ; U.S. Department of Commerce, Bureau of the Census, Current Population Survey, Annual Social and Economic (or March) Supplement. The end of the chapter contains a reference section to other EBRI research on personal savings in a question and answer format.
