Category Archives: Benefits

Improving Retirement Readiness for State and Local Government Employees

Source: Kevin S. Seibert, Betty Meredith, International Foundation for Retirement Education, April 2014

From the abstract:
There is convincing evidence that millions of Americans are not prepared for, or even aware of, what is needed for a successful retirement. Baby boomers in particular are approaching this time in their life much differently than previous generations. Issues such as increased longevity, health care costs, solvency of the Social Security system, inflation and uncertain long-term care costs make assessing future retirement needs more challenging than ever before. Without dramatic changes in behavior, a large percentage of 78 million baby boomers and those who follow them will not be able to retire in the same way as their predecessors and many may ultimately need to rely on federal, state and local governmental assistance programs to help them make ends meet. At the same time, due to increasing costs and the economic climate over the past decade, state and local governments (public sector employers) are now struggling to meet their current and future pension obligations in the same way the private sector has been experiencing for years. According to a March 2012 report by the National Conference of State Legislatures, from 2009 through 2011, 43 states enacted major changes in state retirement plans to address long-term funding issues. These changes were designed to reduce pension fund obligations by increasing employee contributions or age and service requirements for retirement, or both, and adjusting benefit provisions in various other ways to reduce costs. Although many states have been unwilling to abandon the traditional defined benefit plan structure, several states now have private sector-like optional defined contribution plans or hybrid plans with a defined benefit and defined contribution component. As millions more state and local government employees (public sector employees) begin to share the retirement savings and investment risks with their employers, it’s time to learn from the early failures and eventual successes of the private sector plan model. …

– 57 percent of workers report the total value of their household’s savings and investments, excluding the value of their primary homes and any defined benefit plans, is less than $25,000.
– Only 13 percent of workers say they are “very confident” they will have enough money to live comfortably after retirement.
– About 46 percent of unmarried elderly persons rely on Social Security for 90 percent or more of their income.
– More than 75 percent of plan sponsors say most of their participants will have to work during their retirement.

“Crisis” Management: Uncertainty and the Workplace

Source: EBRI-ERF Policy Forum, Policy Forum #74, May 2014

PANEL 1: Never Let a (Retirement) Crisis Go to Waste: What’s Broken, What’s Not, and What to Do About It (or Not)
PANEL 2: Be Careful What You Wish For: The Impact of the ACA on Employment‐Based Health Benefits
PANEL 3: Healthy, Wealthy, and Why – In the Midst of Uncertainty, Can Financial Wellness Work?

Watch the presentation here.

Panel 1: Jack VanDerhei Powerpoint
Panel 1: Peggy Collins Powerpoint
Panel 1: Doug Fisher Powerpoint
Panel 1: Sarah Holden Powerpoint
Panel 1: Diane Oakley Powerpoint
Panel 2: Paul Fronstin Powerpoint
Panel 3: Suzanna de Baca Powerpoint

County Health Benefits 2014

Source: Emilia Istrate, Kirk Heffelmire, Molly Longstreth National Association of Counties (NACo), NACo Trends Analysis Paper Series, Issue 2, 2014

From the press release:
America’s counties spend an estimated $20-24 billion on health insurance premiums each year, according to a new study by the National Association of Counties (NACo), covering an estimated 2.5 million county employees and nearly 2.4 million dependents. The report – County Health Benefits 2014 – is based on a survey of nearly 1,000 counties conducted in March 2014 compared with a survey of the same counties in April 2009.
An analysis of survey results reveals:
• County health benefit eligibility for employees and dependents and county spending on health insurance increased significantly over the last five years.
o Between 2009 and 2014, average monthly premiums for county health plans increased by 20 percent.
o Counties offering coverage to all of their part-time employees doubled (from eight to 16 percent).
• Counties are working with their employees to contain health care costs, by continuing to share premium costs or increasing the deductible amounts, copayments or out-of-pockets limits.
• Counties are still grappling with the uncertain effects of the Affordable Care Act (ACA).
o While 34 percent of counties mentioned increased costs associated with ACA implementation, 35 percent reported no ACA impact.
o The complexity of the ACA statute was the most commonly cited barrier to implementing federal health care reform.
• Most counties offer some type of wellness program, at a higher rate than in 2009.
o The number of counties offering wellness programs jumped from 59 percent in 2009 to more than 80 percent this year.
• Counties are far more likely than other employers to offer retiree health benefits.

Paid Parental Leave in the United States: What the Data Tell Us about Access, Usage, and Economic and Health Benefits

Source: Barbara Gault, Heidi Hartmann, Ariane Hegewisch, Jessica Milli, Lindsey Reichlin, Women’s Policy Research (IWPR), March 2014

…This paper reviews research on the benefits of paid parental leave from the perspectives of individuals, families, employers, and the economy overall. It focuses specifically on leave taken to care for a new child (i.e. maternity or paternity leave). It provides context for the discussion of paid parental leave in the United States by describing state, federal, and international laws and regulations that provide workers with access to paid leave and current efforts to expand access; summarizes research on the availability of paid leave according to existing data sources; and makes recommendations for improving data collection and analysis to more clearly describe the extent of paid family leave in the United States. The paper also suggests ways to increase equity in access to paid leave….

2014 Symposium: Reimagining Pensions: The Next 40 Years

Source: Pension Research Council, May 2014

Forty years after the passage of the US Employee Retirement Income Security Act (ERISA) of 1974, confidence in retirement systems is shakier than ever. This event will examine opportunities and challenges for the future of retirement security, with speakers discussing the adequacy, efficiency, equity, and stability of our current retirement model. Participants will also propose options for policy reform and examine new pension provision models including in the international sphere. Conference attendees include academics, actuaries, plan sponsors, benefits specialists, policymakers, and others concerned about pension provision for the future.

Session I: Today’s Retirement System: Adequacy, Equity, Efficiency, and Stability
∙ “Are Retirees Falling Short? Reconciling the Conflicting Evidence” – Alicia Munnell, Matthew S. Rutledge, and Anthony Webb, Boston College
∙ “Retirement Plans and Prospects for Retirement Income Adequacy” – Jack VanDerhei, EBRI
∙ “The Changing Concept of Retirement” – Julia Coronado and Laura Rosner, BNP Paribas
Discussant: Cynthia Mallett, MetLife

Session II: New Thinking about Retirement Risk Sharing
∙ “Risk Sharing Alternatives for Pension Plan Design” – Anna Rappaport, Anna Rappaport Consulting, and Andrew Peterson, Society of Actuaries
∙ “United States Pension Benefit Plan Design Innovation: Labor Unions as Agents of Change” David Blitzstein, Blitzstein Consulting
∙ “The Promise of Defined Ambition Plans: Lessons for the United States” – A. Lans Bovenberg and Theo E. Nijman, Tilburg University

Session III: Implications of the Regulatory and Fiscal Environment for the Future of Pensions
∙ “Cultivating Pension Plans” – John Vine, Covington & Burling LLP
∙ “Entitlement Reform and the Future of Pensions” – Gene Steuerle, Urban Institute; Pamela Perun, Independent Consultant; and Ben Harris, Brookings Institution

Session IV: Practicalities of New Plan Design
∙ “Retirement Shares Plan: A New Model for Risk Sharing” – Don Fuerst, American Academy of Actuaries
∙ “Back to the Future: Hybrid Co-op Pensions and the TIAA-CREF System” – David Richardson and Benjamin Goodman, TIAA-CREF
∙ “Portfolio Pension Plans” – Richard Shea, Covington & Burling LLP
Discussant: John (Jamie) Kalamarides, Prudential Financial

Session V: International Perspectives on Pension Reform
∙ “Australian and United States Retirement Income Systems: Comparisons and Lessons” -John Piggott and Rafal Chomik, University of New South Wales
∙ “Singapore’s Social Security Savings System: Review and Reforms” – Benedict S. K. Koh, Singapore Management University
∙ “Insights from Switzerland’s Pension System” – Monika Buetler, Universitaet St. Gallen

An Update on Pension Obligation Bonds

Source: Alicia H. Munnell, Jean-Pierre Aubry, and Mark Cafarelli, Center for Retirement Research at Boston College, Issue in Brief, SLP#40, July 2014

The brief’s key findings are:
• Some state and local governments issue Pension Obligation Bonds (POBs) to cover their required pension contributions.
• POBs offer budget relief and potential cost savings, but also carry significant risk.
• POBs had a negative average real return from 1992-2009, but show a small gain when the time period is extended to 2014.
• POBs could be a useful tool for fiscally sound governments or as part of a broader pension reform package for fiscally stressed governments.
• But results to date suggest that, instead, POBs tend to be issued by governments under financial pressure who have little control over the timing.

After ‘Harris v. Quinn’: The State of Our Unions

Source: Eileen Boris, Jennifer Klein, Joel Rogers, Joshua Freeman and Jane McAlevey, The Nation, July 2, 2014

After one of Supreme Court’s most anti-union rulings in recent years, is there still time for organized labor to save itself?…

….To help sort through these and other questions, we have gathered up a group of scholars and activists and asked them to expound. They include Eileen Boris and Jennifer Klein, Joel Rogers, Joshua Freeman and Jane McAlevey. Their pieces range from meditations on what Harris v. Quinn means for the vast corps of women (particularly women of color) who make up this new “partial public employee” category to the way the Court has warped the First Amendment into a scythe to slice apart some of our most basic social protections. And if the meditations are not always cheery, well, this isn’t a particularly cheery topic. Then again, it’s not hopeless either. As McAlevey argues, labor still has time to save itself.

Reducing Labor to Love” by Eileen Boris and Jennifer Klein

How Harris v. Quinn and Burwell v. Hobby Lobby Turned the First Amendment into a Weapon” by Joel Rogers

Is Harris v. Quinn a Threat to Labor Peace?” by Joshua Freeman

Labor’s Only Real Choice: Beating Harris v. Quinn and Right-to-Work Attacks from the Inside Out” by Jane McAlevey…

Why the Supreme Court’s Attack on Labor Hurts Women Most

Source: Michelle Chen, The Nation blog, July 7, 2014

…..According to a CEPR analysis of the “union advantage” and gender inequality, union women are more likely to have decent family leave policies, retirement benefits and wages. Unionized female health aides generally earn wages that are 16 percent higher than that of their non-union counterparts. Meanwhile, though the union workforce is shrinking nationwide, women are becoming the majority and have especially high representation in public service jobs, thanks in large part to the immigration-driven growth in Asian American and Latina workers.

And that brings us back to why Illinois home attendants were a perfect target for the anti-union movement. Union-supported homecare demonstrates how women, “big government” and consumers can effectively work together, so naturally, the right is fighting to destroy this model before it catches on in more states.

Hobby Lobby revealed how companies can lord over working women’s reproductive freedom in a deeply inequitable insurance system. Harris struck from another angle—eroding union women’s labor power and threatening public health services in the process. Unions are a tool for resistance; although unionization alone won’t overcome greed or religious chauvinism in corporations, a strong collective bargaining system would give women a platform to hold bosses accountable and thwart reactionary attacks on health programs for workers and the poor…..
Harris v. Quinn Is About the Right of Home Care Workers to Improve Their Wages
Source: Ross Eisenbrey, Economic Policy Institute, Working Economics blog, May 20, 2014

Are City Fiscal Woes Widespread? Are Pensions the Cause?

Source: Alicia H. Munnell, Jean-Pierre Aubry, Josh Hurwitz, Mark Cafarelli, Challenge, Vol. 57 no. 4, July-August 2014
(subscription required)

From the abstract:
Detroit’s bankruptcy and Chicago’s financial problems and large unfunded pension liabilities have attracted national concern. The question is whether cities across the country are about to topple like dominoes—and whether pensions are the problem. The answer, the authors write, appears to be “no” on both fronts.

Trends in Health Coverage for Part-Time Workers, 1999-2012

Source: Paul Fronstin, Employee Benefit Research Institute (EBRI), EBRI Notes, Vol. 35, No. 5, May 2014

From the abstract:
This paper reviews recent trends in coverage for workers by hours worked and firm size. It examines data from the U.S. Census Bureau’s most recent Current Population Survey. It examines trends in coverage for workers employed full time, 30-39 hours, and fewer than 30 hours. The Patient Protection and Affordable Care Act of 2010 (PPACA) requires that employers with 50 or more full-time workers pay a penalty if they fail to provide health coverage to full-time workers in 2014. Although enforcement has been delayed by the Obama administration, it has raised concern that employers may respond by cutting back on health coverage for part-time workers or by increasing the proportion of part-time workers employed. The recent recession has already resulted in an increased use of part-time workers. However, since enactment of PPACA there has been a slight drop in the use of part-time workers. Part-time workers have experienced a much larger decline in coverage than full-time workers. While the recent erosion in coverage for workers employed 40 or more hours per week was stronger in small firms than in large firms, the opposite was true for workers employed less than 30 hours per week. Between 2008 and 2012, workers employed fewer than 30 hours in a small firm experienced an 11 percent decline in coverage while those in a large firm experienced a 15 percent decline. Among workers employed 30-39 hours per week, both those who worked for a large employer and those who worked for a small employer experienced a 9 percent decline in coverage between 2008 and 2012. Overall, those employed by a large firm were slightly more than twice as likely as those employed by a small firm to have coverage through their own job. In 2012, 45.1 percent of these workers employed by a large employer had coverage through their own job compared with 20.5 percent among workers employed by a small employer. While PPACA may affect whether part-time workers get coverage through their job, and employers may adjust the mix of full-time and part-time workers in the future, unemployment rates and the strength of the economy may play a larger role on workforce patterns than PPACA.