EBRI's Retirement Security Research Program

The Retirement Security Research Program has a number of ongoing projects analyzing various elements of retirement income security. Since 1979 the program has tabulated and analyzed the Current Population Survey (CPS) employee benefits supplement (conducted every five years) for the latest data on retirement plan coverage, participation, and vesting; salary reduction plan coverage and participation; IRA eligibility and usage; and lump sum distribution receipt and subsequent rollover or cashout. The program uses each years Form 5500 filings to update trends on the defined benefit, defined contribution, and 401k markets (plans, participants, contributions, and assets).

The program has devoted significant resources over the years to the issue of leakage from the retirement income system, in particular, the cashout of lump sum distributions upon job change. The program has tapped multiple data sources in the process. In addition to the above mentioned CPS tabulations, the program has contracted with the IRS for special tabulations of information form filings (this was first done in 1994, and a new IRS database is currently being analyzed), utilized the annual Retirement Confidence Survey to examine the use of distributions at job change and retirement, sponsored research by two Stanford economists on the topic, and has teamed up with Hewitt to produce an analysis based on their databases.

The program continually examines the ongoing evolution of the employment based retirement income system. Three separate Issue Briefs have been devoted specifically to this issue in recent years. Two focused on a detailed examination of DB/DC trends and the third examined the emergence of hybrid arrangements.

The flexibility of the program allows it to examine other issues that are of relevance for the retirement income security of American workers. For example, a recent Issue Brief provided an in depth analysis of trends in job tenure, security, and stability, and the implications of these trends for retirement income policy and retirement plan design. The program has also worked with the Public Agenda foundation in recent years to help produce the report, "Promises to Keep." Other topics that have been covered over recent years include the impact of market access and investment restrictions on Japanese pension funds, worker displacement in the mid-1990s and its implications, employee retirement patterns, pension fund portfolio turnover and performance evaluation, pension tax expenditures, the impact of retirement plans on national savings, and PBGC solvency.

The most recent addition to this program is the EBRI/ERF Retirement Income Projection Model.It is based on results from the EBRI/ICI Participant-Directed Retirement Plan Data Collection Project (described under the Defined Contribution Research Program) as well as a time series of several hundred plan descriptions used to provide a sample of the various defined benefit and defined contribution plan provisions applicable to plan participants. In addition, several public surveys based on participants self-reported answers (SCF, CPS, and SIPP) were used to model participation, wages, and initial account balance information.

The model currently estimates the balance of any defined contribution plan and/or IRA (whether through regular contributions or rollovers) of the individual at Social Security normal retirement age.In addition, it estimates the accrued benefits earned and assumed to be retained by defined benefit plan participants. The model has recently been updated to allow comparisons between projected retiree income and both deterministic and stochastic retiree expenditures. The model has been used to generate both national and state-specific results:

National: EBRI-ERF Retirement Security Projection Model

  • Can America Afford Tomorrows Retirees: Results From the EBRI-ERF Retirement Security Projection Model. If current patterns continue, there will be an annual shortfall of at least $45 billion by 2030 between the amount retired Americans need to cover basic expenses and what they have. A new study by the Employee Benefit Research Institute in collaboration with the Milbank Memorial Fund suggests that while many middle-income Americans could provide for their own future by saving 5 percent of compensation annually in addition to the retirement benefits they are already expected to receive, this remedy wont work for many in the lower income brackets. Results of the study were published as the November 2003 EBRI Issue Brief. November 2003 Issue Brief

  • "ERISA At 30: The Decline of Private-Sector Defined Benefit Promises and Annuity Payments? What Will It Mean?" This analysis uses variants of the EBRI-ERF Retirement Security Projection Model (RSPM) to provide quantitative assessments of the future financial security implications of a move away from defined benefit promises and from annuity payments ("traditional" employer-provided pensions). May 2004 Issue Brief

State-Specific: Future Retirement Income Assessment Project -- Massachusetts residents who retire over the next three decades generally won't have enough money to cover their living and health care/nursing expenses, according to a study presented to state officials in Boston on Dec. 3, 2002. The Massachusetts Future Retirement Income Assessment Project was conducted by EBRI and the Milbank Memorial Fund, an endowed philanthropic foundation. A similar study (with similar results) was released July 12, 2002, on retirement adequacy of Kansas residents.

The Retirement Security Research Program is complemented by the work of other EBRI retirement income security related programs: the Defined Contribution Research Program, the Social Security Research Program, and the Retirement Confidence Survey Research Program.