Category Archives: Benefits

The 80 Percent Pension Funding Target, High Assumed Returns, and Generational Inequity

Source: Robert M. Costrell, University of Arkansas – Department of Education Reform, EDRE Working Paper No. 2016-04, April 7, 2016

From the abstract:
Generational inequity in pension funding is highly sensitive to the lax policies of 80-percent funding targets and high assumed returns to investment. I develop a simple, powerful relationship between steady-state (SS) inequity in contributions – the percent of extra contributions to fund prior cohorts – and the SS unfunded ratio. I then show how the SS unfunded ratio is governed by x-percent funding targets and the gap between assumed and true returns. The SS degree of inequity is over 60 percent under an 80 percent funding target and over 50 percent with a one point gap between assumed and true returns.

Views on Employment-based Health Benefits: Findings from the 2015 Health and Voluntary Workplace Benefits Survey

Source: Paul Fronstin, Ruth Helmanm Employee Benefit Research Institute (EBRI), EBRI Notes, Vol. 37 no. 3, March 2016

From the summary:
This Notes article reports workers’ opinions about employment-based health coverage, based on data from the 2015 Health and Voluntary Workplace Benefits Survey (WBS). It also examines 2013-2014 WBS data, as well as 1998-2012 data from the Health Confidence Survey (HCS). Both surveys were conducted by the Employee Benefit Research Institute (EBRI) and Greenwald & Associates.

Most workers are satisfied with the health benefits they have now. One-half of those with employment-based health insurance coverage are extremely (12 percent) or very satisfied (38 percent) with their current plans, and 41 percent are somewhat satisfied. However, one-third of workers would change the mix of wages and health benefits: 14 percent say they would trade wages to get more health benefits, and 20 percent say they would surrender some health benefits for higher wages. Nearly one-half of workers report that they would give up a wage increase to maintain their current health coverage….

Portable Benefits and the Gig Economy: A Backgrounder

Source: Adi Kamdar, OnLabor blog, April 8, 2016

The debate surrounding the gig economy has cast light on workers who depend for their livelihood on multiple sources of income.  For example, an Uber driver may also be working for Lyft, and a freelance website designer may have five clients at the same time.  But when classified as contractors, these workers may miss out on employer-provided health benefits, unemployment, worker’s compensation, paid sick days, and more. In a letter titled “Common ground for independent workers,” a group of tech gurus, union leaders, and startup CEOs recently called for a change in how benefits work.  As they argued in the letter: “Everyone, regardless of employment classification, should have access to the option of an affordable safety net that supports them when they’re injured, sick, in need of professional growth, or when it’s time to retire.”  Their call to action pushes for “flexibility and stability”: the flexibility to work multiple jobs, temporarily or long term, with varying schedules—all while experiencing the stability of a safety net.  Workers’ benefits, they say, shouldn’t be tied to an employer. They should be portable.

Summary of the Quarterly Survey of Public Pensions for 2015: Q4

Source: U.S. Census Bureau, G15-QSPP4, March 31, 2016

For the 100 largest public-employee pension systems in the country, assets (cash and investments) totaled $3,243.3 billion in the fourth quarter of 2015, increasing 0.9 percent from the third quarter level of $3,215.9 billion. This increase in assets is mainly due to positive earnings, as evidenced by a gain of $63.6 billion in the fourth quarter. Compared to the same quarter in 2014, assets for these major public pension systems decreased 3.0 percent from $3,343.6 billion. The major asset categories highlighted in this summary (equities, debt instruments, and cash equivalents) do not reflect all the categories published for the Quarterly Survey of Public Pensions…..

State and Local Government Spending on Public Employee Retirement Systems

Source: National Association of State Retirement Administrators (NASRA), NASRA Issue Brief, March 2016

From the introduction:
State and local government pension benefits are paid not from general operating revenues, but from trust funds to which public retirees and their employers contributed while they were working. On a nationwide basis, pension contributions made by state and local governments account for roughly 4.1 percent of direct general spending. Current pension spending levels, however, vary widely and are sufficient for some entities and insufficient for others.

In the wake of the 2008-09 market decline, nearly every state and many cities have taken steps to improve the financial condition of their retirement plans and to reduce costs although some lawmakers have considered closing existing pension plans to new hires, most determined that this would increase — rather than reduce — costs, particularly in the near-term. Instead, states and cities have made changes to the pension plan by adjusting employee and employer contribution levels, restructuring benefits, or both. Generally, adjustments to pension plans have been proportionate to the plan’s funding condition and the degree of change needed.

Trends in Employer-Sponsored Insurance Offer and Coverage Rates, 1999-2014

Source: Michelle Long, Matthew Rae, Gary Claxton, and Anthony Damico, Kaiser Family Foundation, Issue Brief, March 2016

From the summary:
The majority of nonelderly people get their health coverage through an employer-based plan. This issue brief uses data from the National Health Interview Survey (NHIS) to examine trends in employer-sponsored health insurance (ESI) for different types of people and households.1 While ESI remains the leading source of coverage for nonelderly people (those under age 65), the percentage covered by an employer plan has declined over the last fifteen years. A similar pattern exists with firm offer rates; fewer workers were offered health insurance from their employer in 2014 than in 1999. The decrease in offer and coverage rates has not been universal; families with low and modest incomes have been most affected by the decline. While coverage rates have declined over time, the percentage of the nonelderly population covered by ESI is similar between 2013 and 2014.

Both the percentage of employers who offer insurance and the percentage of people covered will be important to watch as the changes brought about by the Affordable Care Act (ACA) continue to unfold. New coverage provisions and financial assistance provided in the ACA affect employers’ decision to offer coverage and employees’ decisions to take up any coverage they are offered at work. The employer shared responsibility provision, for example, requires employers with 50 or more full-time equivalent employees to offer coverage to full-time employees and their dependent children or face a financial penalty. This provision should tend to expand the number of workers offered coverage in these firms, and, because most individuals are required to have health insurance or pay a penalty (the individual responsibility provision), more workers may take up the coverage offered at work. At the same time, new coverage options and financial assistance available through health insurance marketplaces may encourage some small employers (who are exempt from the employer shared responsibility provisions) to stop offering health benefits if they feel that their employees would be better off getting coverage through the marketplaces.2 Larger employers may also reconsider who they offer coverage to; some may stop offering coverage to part-time workers so those workers are eligible to receive a subsidy on the marketplaces. The percentage of people who received coverage through an employer sponsored plan in 2014 remained similar to the coverage rates in 2010, the year of the ACA’s passage.

The Impact of Decoupling of Telework on Job Satisfaction in U.S. Federal Agencies – Does Gender Matter?

Source: Kwang Bin Bae, Dohyeong Kim, The American Review of Public Administration, Vol. 46 no. 3, May 2016
(subscription required)

From the abstract:
This study analyzes the effects of decoupling of telework on job satisfaction using the 2013 Federal Employee Viewpoint Survey. The research divides telework programs for public employees by two criteria: (a) whether or not federal agencies have officially adopted the program, and (b) whether or not public employees actually participate in the program. We find that both organizational adoption and employee participation in telework have a positive relationship with job satisfaction, and these results support the social exchange theory. We also observe that the effects of decoupling of telework on job satisfaction are more significant for female public employees than for male public employees. The results imply that female employees have the lowest levels of job satisfaction when agencies officially adopt telework but employees cannot utilize the program. However, male employees have the lowest levels of job satisfaction when they are unable to utilize a nonexistent telework program.

Private and Public-Sector Retirement Plan Trends

Source: Employee Benefit Research Institute, EBRI Databook on Employee Benefits, Chapter 5, Updated October 2015

Tables include:
• Percentage of Employees Participating in Retirement and Capital Accumulation Plans, by Type of Plan: Medium and Large Private Establishments, 1980-2003
• Percentage of Employees Participating in Retirement and Capital Accumulation Plans, by Type of Plan: Medium and Large Private Establishments, 2004-2015
• Percentage of Employees Participating in Retirement and Capital Accumulation Plans, by Type of Plan: Small Private Establishments, 1990-2015
• Percentage of Employees Participating in Retirement and Capital Accumulation Plans, by Type of Plan: State and Local Governments, 1987-2015
• Summary of Private-Sector Qualified Defined Benefit and Defined Contribution Plans and Participants, Selected Years 1975–1990
• Summary of Private-Sector Qualified Defined Benefit and Defined Contribution Plans and Participants, Selected Years 1991-2006
• Summary of Private-Sector Qualified Defined Benefit and Defined Contribution Plans and Participants, Selected Years 2007-2013

Data-sets used in this chapter:
U.S. Department of Labor, Bureau of Labor Statistics, National Compensation Survey – Tables 10.1a-d The National Compensation Survey (NCS) covers the incidence and de tailed provisions of selected employee benefit plans in private establishments. The data are presented as the percent of employees who have access to or participate in certain benefits, or as average benefit pro visions. Before 1999, data from the Employee Benefit Survey were released in three separate publications covering medium and large private establishments (establishments with 100 or more employees), small private establishments (establishments with 99 or fewer employees), and stat e and local governments. Starting with the 1999 data, BLS began publishing data for all private industry. For further information on the data collection, survey method ology, and data usage please go to the following web site: http://www.bls.gov/ebs/ in the section general overview.

U.S. Department of Labor, Employee Benefit Security Administration, Tabulations off the Form 5500 – Tables 5.2. In compliance with Title I of the Employee Retirement Income Security Act of 1974 (ERISA) all private-sector plan sponsors must file a Form 5500 with the IRS. These forms contain extensive financial, participant, and actuarial data. Such plans may be defined benefit or define d contribution. They generally cover private wage and salary employees and are sponsored either by employers or jointly by employers and unions.

Worker Opinions About Employee Benefits: Differences Among Millennials, Baby Boomers, and Generation X Have Implications for Plan Sponsors

Source: Paul Fronstin and Ruth Helman, Employee Benefit Research Institute, EBRI notes, Vol. 36 No. 12, December 2015

From the press release:
• Millennials are less likely than Baby Boomers and Gen Xers to report health insurance as the most important benefit they receive at work. Millennials are more likely than Baby Boomers or Gen Xers to report that they value life insurance and paid time off as the most important benefit.

• Millennials are less likely than Baby Boomers and Gen Xers to report that the benefits a potential employer offers are extremely important in their decision to accept or reject a job. Millennials are also more likely than Baby Boomers and Gen Xers to be open to non-traditional ways of obtaining benefits.

• Millennials are more likely than other workers to respond that they do not know about their benefits. Participation in various employee benefit programs is generally lower among Millennials than among Baby Boomers and Gen Xers.

Former Presidents: Pensions, Office Allowances, and Other Federal Benefits

Source: Wendy Ginsberg, Daniel J. Richardson Congressional Research Service, CRS Report, RL34631, March 16, 2016

…. This report provides a legislative and cultural history of the Former Presidents Act. It details the benefits provided to former Presidents and their costs. Congress has the authority to reduce, increase, or maintain the pension and benefits provided to former Presidents of the United States. This report considers the potential effects of maintaining the FPA or amending the FPA in ways that might reduce or otherwise modify a former President’s benefits. ….