Source: Barbara A. Butrica, Howard M. Iams, Karen E. Smith, and Eric J. Toder, Center for Retirement Research at Boston College, WP#2009-2, January 2009
From the abstract:
The long-term shift in coverage from defined benefit (DB) pensions to defined contribution (DC) plans may accelerate rapidly as more large companies freeze their DB pensions and replace them with new or enhanced DC plans. This paper uses the Model of Income in the Near Term to simulate the impact of an accelerated transition from DB to DC pensions on the distribution of retirement income among boomers. A scenario in which employers freeze all remaining private sector DB plans and a third of all state and local plans over the next five years will on balance produce more losers than winners among boomers and reduce their average incomes at age 67. Income changes will be largest among higher-income boomers, who have the highest DB coverage rates and projected pension incomes. Furthermore, the numbers of winners and losers and net income changes are much greater for the last wave of boomers (born between 1961 and 1965) than for earlier boomers. Younger boomers are most likely to have their DB pensions frozen with relatively little job tenure and to lose their high accrual years for DB pension wealth, but also to have relatively more years to accumulate DC pension wealth before retirement…
Source: David Rosnick and Dean Baker, Center for Economic and Policy Research, February 2009
From the summary:
Turmoil in the housing and stock markets now threatens the retirement security of tens of millions of baby boomers who looked to their houses and investments as sources of retirement wealth. A new report from the Center for Economic and Policy Research (CEPR) shows that due to the collapse of the housing bubble, the vast majority of near retirees have accumulated little or no wealth. This means that they will be almost completely reliant on Social Security and Medicare to support them in their retirement years.
Source: William J. Wiatrowski, Bureau of Labor Statistics, February 25, 2009
New data from the National Compensation Survey show that 92 percent of government workers have access to one or more types of retirement benefits; 84 percent have access to a traditional defined benefit plan, and two-thirds of those with any retirement benefits have access to more than one plan.
Source: Monique Morrissey, Economic Policy Institute, Economic Snapshot, March 9, 2009
Retirement accounts have lost roughly a third of their value since October 2007, forcing many older workers to scrap their retirement plans. Could this have been averted? Were 401(k) participants to blame for poor investment choices?
Source: Alicia H. Munnell, Francesca Golub-Sass, and Dan Muldoon, Center for Retirement Research at Boston College, IB #9-5, March 2009
From the summary:
The maturation of the 401(k) system and the enactment of the Pension Protection Act of 2006, which made 401(k) plans easier and more automatic, were expected to enhance the role that 401(k)s played in the provision of retirement income. So, originally, the release of the Federal Reserve’s 2007 Survey of Consumer Finances (SCF) seemed like a great opportunity to re-assess 401(k)s. The SCF is a triennial survey of a nationally representative sample of U.S. households, which collects detailed information on households’ assets, liabilities, and demographic characteristics.
Of course, the 2007 SCF reflects a world that no longer exists. Interviews were conducted during the late summer and early fall when the Dow Jones was at 14,000 (the peak was October 9, 2007) and housing prices were only slightly off their peak. While the economic crisis had already begun, its effects were not yet visible. Since the time of the interviews, the stock market has imploded, reducing the value of equities in 401(k) and IRAs by about $2 trillion. Housing prices have fallen by 20 percent. And the crisis has spread to the real economy, throwing 3.6 million people out of work…
data on companies suspending or reducing 401(k) contributions
Source: Kathryn L. Moore, NYU Review of Employee Benefits and Executive Compensation, Chapter 7, 2008
From the abstract:
This article examines the recent trend of transferring employer retiree health care liabilities to VEBAs. After providing a brief history of retiree health benefits and an overview of the basic tax rules governing VEBAs, the article explains the difference between traditional VEBAs and the new retiree health VEBAs. The article then discusses the advantages and limitations of the new VEBAs. The article concludes that the new VEBAs may be an appropriate vehicle for pre-funding retiree health benefits for some employers, particularly financially distressed employers with significant retiree health liabilities and large union forces, but they are not a panacea for the country’s health care financing woes.
Source: Jack VanDerhei, Employee Benefit Research Institute, EBRI Issue Brief, no. 326, February 2009
A new EBRI analysis of the impact of the recent financial crisis on average 401(k) retirement plan balances from Jan. 1, 2008, to Jan. 20, 2009, shows that participants’ losses were largely determined by their account balance, age, and job tenure.
Source: Urban Institute, February 11, 2009
From the abstract:
Older Americans face an uncertain retirement future. Policies are urgently needed to shore up Social Security and Medicare, get health care spending under control, and make staying in the labor force at older ages easier, while still protecting disabled workers. This policy brief summarizes a wide-ranging discussion of retirement issues to explore how public policies might adapt to an aging population.
Source: Jennifer Staman, Congressional Research Service, R40171, January 29, 2009
In December of 2008, Congress unanimously enacted the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA) (P.L. 110-455), which makes several technical corrections to the Pension Protection Act of 2006 (P.L. 109-280) and contains provisions designed to help pension plans and plan participants weather the current economic downturn. This report highlights the provisions of WRERA relating to the economic crisis, such as the temporary waiver of required minimum distributions and provisions that temporarily relax certain pension plan funding requirements. This report also discusses certain technical corrections to the Pension Protection Act made by WRERA, and certain other notable provisions of the Act affecting retirement plans and benefits.
Source: Patrick Purcell, Congressional Research Service, RL33116, January 30, 2009
From February through May of 2003, the U.S. Census Bureau collected information about participation in employer-sponsored retirement plans among individuals in more than 29,000 U.S. households. These data are the most comprehensive source of information available on workers’ participation in employer-sponsored retirement plans from a nationally representative sample of American households.