EBRI Issue Brief

Amidst growing concerns about workers outliving their retirement savings, a key question-both as a matter of national retirement policy and understanding the potential role of plan design and education in influencing individual decision-making-is how many retiring workers actually choose to annuitize (to take a stream of lifetime income) vs. opting for a lump-sum payment. The key finding of this study is that differences in defined benefit (DB) plan rules or features result in very different annuitization rates in DB plans...

The 2012 EBRI/MGA Consumer Engagement in Health Care Survey finds continued slow growth in consumer-driven health plans: 10 percent of the population was enrolled in a CDHP, up from 7 percent in 2011. Enrollment in HDHPs remained at 16 percent. Overall, 18.6 million adults ages 21-64 with private insurance, representing 15.4 percent of that market, were either in a CDHP or were in an HDHP that was eligible for an HSA. When their children were counted, about 25 million individuals with private insurance, representing about 14...

THE BULK OF 401(K) ASSETS CONTINUED TO BE INVESTED IN STOCKS: On average, at year-end 2011, 61 percent of 401(k) participants' assets was invested in equity securities through equity funds, the equity portion of balanced funds, and company stock. Thirty-four percent was in fixed-income securities such as stable-value investments and bond and money funds. SEVENTY-TWO PERCENT OF 401(K) PLANS INCLUDED TARGET-DATE FUNDS IN THEIR INVESTMENT LINEUP AT YEAR-END 2011: At year-end 2011, 13 percent of the assets in the EBRI/ICI 401(k) database was invested in target-date funds and 39 percent of 401(k) participants held target-date funds...

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HEALTH COVERAGE RATE INCREASED, UNINSURED DOWN: The percentage of the nonelderly population (under age 65) with health insurance coverage increased to 82 percent in 2011, notable since increases in health insurance coverage have been recorded in only five years since 1994. EMPLOYMENT-BASED COVERAGE REMAINS DOMINANT SOURCE OF HEALTH COVERAGE, BUT CONTINUES TO ERODE: Employment-based health benefits remain the most common form of health coverage in the United States, though it represents a declining share. In 2011, 58...

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This issue brief examines issues related to private health insurance exchanges, possible structures of an exchange, funding, as well as the pros, cons, and uncertainties to employers of adopting them. A summary of recent surveys on employer attitudes are examined, as are some changes that employers have made to other benefits that might serve as historical precedents for a move to some type of defined contribution health benefits approach.

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In 2010, IRA owners were more likely to be male, especially those whose accounts originated from a rollover or were a SEP/SIMPLE. Among all IRA owners in the database, nearly one-half (45.8 percent) were ages 45-64. The average and median IRA account balance in 2010 was $67,438 and $17,863, respectively, while the average and median IRA individual balance (all accounts from the same person combined) was $91,864 and $25,296. Individuals with a traditional-originating from rollovers had the highest average and median balance of $123,426 and $38,138, respectively...

Americans' confidence in their ability to retire comfortably is stagnant at historically low levels. Just 14 percent are very confident they will have enough money to live comfortably in retirement (statistically equivalent to the low of 13 percent measured in 2011 and 2009). Employment insecurity looms large: Forty-two percent identify job uncertainty as the most pressing financial issue facing most Americans today. Worker confidence about having enough money to pay for medical expenses and long-term care expenses in retirement remains well below their confidence levels for paying basic expenses...

PRE- AND POSTRETIREMENT EXPENSES: Before retirement, people pay FICA taxes, incur work-related expenses, and set aside money for retirement. But after retirement, most people have different financial obligations, and, as a result, retirees may still be able to maintain their level of preretirement well-being with very different income levels. Studying income, expenditures, and wealth-holding patterns together provides a more complete idea of how people are doing in terms of being able to afford retirement than arbitrary estimates such as income replacement ratios...

ASSET LEVELS GROWING: In 2011, there was $12.4 billion in health savings accounts (HSAs) and health reimbursement arrangements (HRAs), spread across 8.4 million accounts, according to data from the 2011 EBRI/MGA Consumer Engagement in Health Care Survey, sponsored by EBRI and Matthew Greenwald & Associates. This is up from 2006, when there were 1.3 million accounts with $873.4 million in assets, and 2010, when 5.4 million accounts held $7.3 billion in assets. AFTER LEVELING OFF, AVERAGE ACCOUNT BALANCES INCREASED: After average account balances leveled off in 2008 and 2009, and fell slightly in 2010, they increased in 2011...

SEVENTH ANNUAL SURVEY: This Issue Brief presents findings from the 2011 EBRI/MGA Consumer Engagement in Health Care Survey. This study is based on an online survey of 4,703 privately insured adults ages 21-64 to provide nationally representative data regarding the growth of consumer-driven health plans (CDHPs) and high-deductible health plans (HDHPs), and the impact of these plans and consumer engagement more generally on the behavior and attitudes of adults with private health insurance coverage. Findings from this survey are compared with EBRI's findings from earlier surveys...

THE BULK OF 401(K) ASSETS CONTINUED TO BE INVESTED IN STOCKS: On average, at year-end 2010, 62 percent of 401(k) participants' assets were invested in equity securities through equity funds, the equity portion of balanced funds, and company stock. Thirty-three percent were in fixed-income securities such as stable value investments and bond and money funds. SEVENTY PERCENT OF 401(K) PLANS INCLUDED TARGET-DATE FUNDS IN THEIR INVESTMENT LINEUP AT YEAR-END 2010: At year-end 2010, 11 percent of the assets in the EBRI/ICI 401(k) database were invested in target-date funds and 36 percent of 401(k) participants held target-date funds...

TAX PROPOSALS: Currently, the combination of worker and employer contributions in a defined contribution plan is capped by the federal tax code at the lesser of $49,000 per year or 100 percent of a worker's compensation (participants over age 50 can make additional "catch-up" contributions). As part of the effort to lower the federal deficit and reduce federal "tax expenditures," two major reform proposals have surfaced that would change current tax policy toward retirement savings: A plan that would end the existing tax deductions for 401(k) contributions and replace them with a flat-rate refundable credit that serves as a matching contribution into a retirement savings account...

UNLABELLED: LATEST DATA: This Issue Brief examines the level of participation by workers in public- and private-sector employment-based pension or retirement plans, based on the U.S. Census Bureau's March 2011 Current Population Survey (CPS), the most recent data currently available (for year-end 2010). SPONSORSHIP RATE: Among all working-age (21-64) wage and salary employees, 54.2 percent worked for an employer or union that sponsored a retirement plan in 2010. Among full-time, full-year wage and salary workers ages 21-64 (those with the strongest connection to the work force), 61...

LATEST CENSUS DATA: This Issue Brief provides historical data through 2010 on the number and percentage of nonelderly individuals with and without health insurance. Based on EBRI estimates from the U.S. Census Bureau's March 2011 Current Population Survey (CPS), it reflects 2010 data. It also discusses trends in coverage for the 1994-2010 period and highlights characteristics that typically indicate whether an individual is insured. HEALTH COVERAGE RATE CONTINUES TO DECREASE, UNINSURED INCREASE: The percentage of the nonelderly population (under age 65) with health insurance coverage decreased to 81...

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