Category Archives: Benefits

American Retirement Savings Could Be Much Better

Source: Rowland Davis and David Madland, Center for American Progress, August 2013

From the summary:
The personal retirement-savings plans that most Americans use, such as 401(k)s and Individual Retirement Accounts, or IRAs, are unnecessarily costly and needlessly risky. But instituting another kind of retirement plan that combines the best elements of both defined-contribution and defined-benefit plans—such as the Center for American Progress’s proposed Secure, Accessible, Flexible, and Efficient, or SAFE, Retirement Plan, or the related USA Retirement Funds proposal from Sen. Tom Harkin (D-IA)—could provide a more secure retirement at a far lower cost, according to a new analysis by the Center for American Progress.

These two proposals, also known as collective defined-contribution plans, improve upon the 401(k) model in a number of ways. As described in greater detail in a fall 2012 report, titled “Making Saving for Retirement Easier, Cheaper, and More Secure,” CAP’s SAFE Retirement Plan combines elements of a traditional pension—including regular lifetime payments in retirement, professional management, and pooled investing—with elements of a 401(k), such as predictable costs for employers and portability for workers. (see text box)

Our actuarial analysis finds that CAP’s SAFE Retirement Plan significantly outperforms both 401(k)s and IRAs on cost and risk measures. The results of our study are striking:
– The SAFE Plan costs only half as much for workers. A worker with a SAFE Plan would have to contribute only half as much of their paycheck as a worker saving in a typical 401(k) plan to have the same likelihood of maintaining their standard of living upon retirement.
– The SAFE Plan reduces risk dramatically. A worker with a SAFE Plan is nearly 2.3 times as likely to maintain their standard of living in retirement as a worker with a typical 401(k) account making identical contributions.
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Introduction

2013 Employer Health Benefits Survey

Source: Kaiser Family Foundation and the Health Research & Educational Trust, August 20, 2013

From the abstract:
This annual survey of employers provides a detailed look at trends in employer-sponsored health coverage, including premiums, employee contributions, cost-sharing provisions, and other relevant information. The 2013 survey included almost three thousand interviews with non-federal public and private firms.

Annual premiums for employer-sponsored family health coverage reached $16,351 this year, up 4 percent from last year, with workers on average paying $4,565 towards the cost of their coverage, according to the Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2013 Employer Health Benefits Survey.
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Summary
Press release

2013 Workplace Benefits Report: Employees’ Views on Achieving Financial Wellness

Source: Bank of America/Merrill Lynch, AR1D1838, 2013

From the press release:
Bank of America Merrill Lynch today announced findings from its 2013 Workplace Benefits Report, a study of the increasingly significant role financial benefit plans play in helping the American workforce achieve financial wellness. Based on a nationwide survey of more than 1,000 employees from companies of all sizes, this research offers new insights into the availability, utilization and evolution of these workplace benefits – from 401(k) plans and health savings accounts (HSAs) to financial advice and education.

Key findings include:
• More needs to be done to help employees confidently transition into retirement
• Tax – advantaged saving for medical expenses is becoming the norm, though many are saving less for retirement as a result of rising healthcare costs
• 401(k) contribution rates indicate that the majority of younger workers may be comfortable with an automatic deferral of 5 percent
• One out of four “pre-retirees” – employees who indicate being within five years of retirement – expects to have less than $250,000 saved
• Workers are willing to give up portions of their salary for guaranteed retirement income
• Employees are looking to their employers for access to one-on-one advice from a financial professional
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Download the Presentation

Report: Paid sick leave doesn’t scare away new business

Source: Katie Mcdonough, Salon, June 20, 2013

An audit of Washington, DC’s paid sick leave program reveals skeptics were wrong about its impact on businesses.
Related:
Audit of the Accrued Sick and Safe Leave Act of 2008
Source: Yolanda Branche, Office of the District of Columbia Auditor, June 19, 2013

DC’s Paid Sick Leave Law Had No Negative Effect On Businesses
Source: Bryce Covert, ThinkProgress, June 20, 2013

Policies to Reduce Influenza in the Workplace: Impact Assessments Using an Agent-Based Model
Source: Supriya Kumar, John J. Grefenstette, David Galloway, Steven M. Albert, Donald S. Burke, American Journal of Public Health, Posted online on 13 Jun 2013
(subscription required)

Detroit Bankruptcy Takes Aim at Pensions

Source: Jane Slaughter, Labor Notes, July 19, 2013

…Orr sprung the hurry-up filing yesterday because union pension fund attorneys were scheduled to be in court on Monday, arguing for an injunction against bankruptcy. The state constitution appears to protect public employee pensions: “The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof and shall not be diminished or impaired thereby.” But proponents of making city workers bite the bullet note that bankruptcy judges have wide latitude to break contracts. …

Policies to Reduce Influenza in the Workplace: Impact Assessments Using an Agent-Based Model

Source: Supriya Kumar, John J. Grefenstette, David Galloway, Steven M. Albert, Donald S. Burke, American Journal of Public Health, Posted online on 13 Jun 2013
(subscription required)

From the abstract:
Objectives. We examined the impact of access to paid sick days (PSDs) and stay-at-home behavior on the influenza attack rate in workplaces.

Methods. We used an agent-based model of Allegheny County, Pennsylvania, with PSD data from the US Bureau of Labor Statistics, standard influenza epidemic parameters, and the probability of staying home when ill. We compared the influenza attack rate among employees resulting from workplace transmission, focusing on the effects of presenteeism (going to work when ill).

Results. In a simulated influenza epidemic the attack rate among employees owing to workplace transmission was 11.54%. A large proportion (72.00%) of this attack rate resulted from exposure to employees engaging in presenteeism. Universal PSDs reduced workplace infections by 5.86%. Providing 1 or 2 “flu days”—allowing employees with influenza to stay home—reduced workplace infections by 25.33% and 39.22%, respectively.

Conclusions. PSDs reduce influenza transmission owing to presenteeism and, hence, the burden of influenza illness in workplaces.
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Universal Paid Sick Leave Reduces Spread of Flu, According to Pitt Simulation
Source: Press Release, UPMC/University of Pittsburgh Schools of the Health Sciences, June 13, 2013

Coming Soon to the Big Apple – Paid Sick Days, as New York City Council Overrides Bloomberg Veto

Source: Elise Gould and Doug Hall, Economic Policy Institute (EPI), Working Economics blog, June 28, 2013

Early Thursday, the New York City council successfully overrode Mayor Bloomberg’s veto of a bill giving New York workers access to paid sick leave, at long last. The bill phases in over two years, beginning in April 2014 for businesses with 20 workers or more.

The Funding of State and Local Pensions: 2012-2016

Source: Alicia H. Munnell, Jean-Pierre Aubry, Josh Hurwitz, and Madeline Medenica, State and Local Pension Plans, SLP#32, July 2013

The brief’s key findings are:
– During 2012, using current GASB standards, the funded status of public plans declined slightly from 75 percent to 73 percent.
– This decline reflected slow asset growth, which was only partly mitigated by reduced liability growth.
– States and localities also continued to fall short on their annual required contribution payments.
– Going forward, the funded ratio is projected to gradually move above 80 percent, assuming a healthy stock market.