Category Archives: Retirement

EEOC and Retiree Health Benefits

Source: U.S. Equal Employment Opportunity Commission

From the press release:
The U.S. Equal Employment Opportunity Commission (EEOC)…announced the publication of a final rule allowing employers that provide retiree health benefits to continue the longstanding practice of coordinating those benefits with Medicare (or comparable state health benefits) without violating the Age Discrimination in Employment Act (ADEA). The regulation, which safeguards retiree health benefits, was published in the December 26, 2007 Federal Register.

Final Rule: Age Discrimination in Employment Act; Retiree Health Benefits, Federal Register Notice, December 26, 2007

Questions & Answers about the EEOC’s Retiree Health Rule

Private Pensions: Low Defined Contribution Plan Savings May Pose Challenges to Retirement Security, Especially for Many Low-Income Workers

Source: Government Accountability Office

Over the last 25 years, pension coverage has shifted primarily from “traditional” defined benefit (DB) plans, in which workers accrue benefits based on years of service and earnings, toward defined contribution (DC) plans, in which participants accumulate retirement balances in individual accounts. DC plans provide greater portability of benefits, but shift the responsibility of saving for retirement from employers to employees. This report addresses the following issues: (1) What percentage of workers participate in DC plans, and how much have they saved in them? (2) How much are workers likely to have saved in DC plans over their careers and to what degree do key individual decisions and plan features affect plan saving? (3) What options have been recently proposed to increase DC plan coverage, participation, and savings? GAO analyzed data from the Federal Reserve Board’s 2004 Survey of Consumer Finances (SCF), the latest available, utilized a computer simulation model to project DC plan balances at retirement, reviewed academic studies, and interviewed experts.

Full report

Dept. of Labor Launches New Website on Retirement Laws

Source: U.S. Department of Labor, Employee Benefits Security Administration

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) today announced a new interactive Web tool to serve as a resource for employers in complying with federal employee benefit laws. The ERISA Fiduciary Advisor is designed to help employers and others who provide services to private sector retirement plans understand their responsibilities. The advisor provides an overview of the Employee Retirement Income Security Act (ERISA), including the most common mistakes EBSA finds in its investigations, and provides links to additional information as well as tools to assist plan officials. Strong fiduciary oversight and compliance assistance are both high priorities for EBSA.

Older Workers: Employment and Retirement Trends

Source: Patrick Purcell, Congressional Research Service, Order Code RL30629, September 7, 2007

As the members of the “baby boom” generation (people born between 1946 and 1964) approach retirement, the demographic profile of the U.S. workforce will undergo a substantial shift: a large number of older workers will be joined by relatively few new entrants to the labor force. According to the Census Bureau, while the number of people between the ages of 55 and 64 will grow by about 11 million between 2005 and 2025, the number of people who are 25 to 54 years old will grow by only 5 million. This trend could affect economic growth because labor force participation begins to fall after age 55. In 2006, 91% of men and 76% of women aged 25 to 54 participated in the labor force. In contrast, just 70% of men and 58% of women aged 55 to 64 were either working or looking for work in 2006.

The Other Benefits Mess

Source: Anna Kates Smith, Kiplinger’s Personal Finance magazine, September 2007

A new regulation forces government retirement plans to reveal the cost of their health-benefit promises for the first time.

…State and local governments aren’t required to set aside money to meet future promises other than for retiree pensions. Most pay what they owe each year out of their current budget. But starting this year, government retirement plans must at least account for their long-term health care and other benefits liabilities (known as OPEB, or other post-employment benefits) and publish the calculations.

More Americans Age 55 and Older Are Working Full Time

Source: Craig Copeland, Employee Benefit Research Institute, Vol. 28 no. 8, August 2007

From press release:

As an increasing percentage of older Americans are in the labor force, the trend toward more full-time, full-year work among older workers occurs across virtually every demographic group, according to an article published today by the nonpartisan Employee Benefit Research Institute (EBRI).

These trends mark a significant change in behavior for individuals age 55 and older, the article says, and are likely driven by their need to obtain affordable employment-based health insurance (as opposed to unaffordable or unavailable coverage in the individual market) and the need to continue to accumulate savings in employment-based defined contribution retirement plans.

Growing Older in America: The Health & Retirement Study

Source: Freddi Karp, Editor, National Institute on Aging, National Institutes of Health
U.S. Department of Health and Human Services, NIH Publication No. 07- 5757, March 2007

There is no question that the aging of America will have a profound impact on individuals, families, and U.S. society. The Health and Retirement Study (HRS), sponsored by the National Institute on Aging under a cooperative agreement with the University of Michigan, follows more than 20,000 men and women over 50, offering insight into the changing lives of the older U.S. population. Launched in 1992, this multidisciplinary, longitudinal study has become known as the Nation’s leading resource for data on the combined health and economic conditions of older Americans.

Growing Older in America: The Health & Retirement Study describes the breadth and depth of the HRS to help familiarize a broad range of researchers; policymakers; media; and organizations concerned with health, economics, and aging with this data resource. Published in 2007, this colorful data book describes the HRS’s development and features and offers a snapshot of research findings based on analyses of the Study’s data. Sections of the report look at older adults’ health, work and retirement, income and wealth, and family characteristics and intergenerational transfers. More than 65 figures and tables illustrate the text.

Retirement Decisions: Federal Policies Offer Mixed Signals about When to Retire

Source: Government Accountability Office Report to Congressional Committees, GAO-07-753, July 11, 2007

While many factors influence workers’ decisions to retire, Social Security, Medicare, and pension laws also play a role, offering incentives to retire earlier and later. Identifying these incentives and how workers respond can help policy makers address the demographic challenges facing the nation. GAO assessed (1) the incentives federal policies provide about when to retire, (2) recent retirement patterns and whether there is evidence that changes in Social Security requirements have resulted in later retirements, and (3) whether tax-favored private retiree health insurance and pension benefits influence when people retire. GAO analyzed retirement age laws and SSA data and conducted statistical analysis of Health and Retirement Study data.