NOTES. June 2008, Vol. 29, No. 6. Executive Summary:

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1 NOTES Benefit Cost Comparisons Between State and Local Governments and Private-Sector Employers, p. 2 The Number of Individual Account Retirement Plans Owned by American Families, p. 6 New Publications and Internet Sites, p. 10 Executive Summary: June 2008, Vol. 29, No. 6 Benefit Cost Comparisons Between State and Local Governments and Private-Sector Employers Nature and work forces of public vs. private sector have major differences Major reasons for the differences in total compensation costs between state and local government employers and privatesector employers are the different composition of their respective work forces and the different nature of public- vs. private-sector work. State and local government jobs include education and public safety functions (teachers, police, and firefighters), which involve high levels of education, training, physical fitness, or risk) and largely do not exist in the private sector. Unionization rates also are higher in the public sector than in the private sector. Compensation costs higher for state and local government due to work force characteristics Overall total compensation costs as of September of 2007 were 51.4 percent higher among state and local government employers ($39.50 per hour worked) than among private-sector employers ($26.09 per hour worked). Health and retirement costs higher in the public sector to support better benefits State and local governments have sharply higher costs for health and retirement benefits than private-sector employers, since their workers participate in these benefits at far higher rates and public-sector workers are far more likely to have defined benefit (pension) retirement benefits than are privatesector workers. The Number of Individual Account Retirement Plans Owned by American Families Just over one-half of Americans do not have an individual account retirement plan Half of families in the United States (50.9 percent) do not own an individual account retirement plan at all, but of those that do own at least one plan, most own only one. The minority of families that own more than one individual account plan tend to have a disproportionate amount of assets in these plans. Where the money is Families that own more than one account tend to have family heads between the ages of 35 64, and family income of $50,000 or more. An accurate estimate of total retirement assets requires analysis of families current-job defined contribution plans, former-job defined contribution plans, and their individual account retirement plans. A monthly newsletter from the EBRI Education and Research Fund 2008 EBRI

2 g Benefit Cost Comparisons Between State and Local Governments and Private-Sector Employers By Ken McDonnell, EBRI This article examines some of the causes of the differences in total compensation costs between state and local government employers and private-sector employers. As of September of 2007, overall total compensation costs were 51.4 percent higher among state and local government employers ($39.50 per hour worked) than among private-sector employers ($26.09 per hour worked) (calculated from Figure 1). Total compensation costs consist of two major categories: wages and salaries and employee benefits. For both of these categories, state and local government employers costs were higher than those of private-sector employers: 42.6 percent higher for wages and salaries and 72.8 percent higher for employee benefits (calculated from Figure 1). Work Force Comparisons Major reasons for the differences in total compensation costs between state and local government employers and private-sector employers are the different composition of their respective work forces and the different nature of public- vs. private-sector work. This section looks at two components of the work force: industry groups and occupation groups. Note that the term service is not the same in the industry groupings and occupation groupings: For instance, the public sector classifies public safety jobs (such as police and firefighters, which involve high levels of training, physical fitness, and risk) as being in the service sector, while these functions largely do not exist in the private sector. Data for these two sectors are not identical because not all service workers are employed in the service industries. Industry Groups State and local government workers are highly concentrated in the education sector. This sector includes teachers and university professors, two categories of employees with high unionization rates and high compensation costs. In September 2007, 52.7 percent of all state and local government employees were employed in this sector (Figure 2) and total compensation costs for the education sector were $42.48 per hour worked. By contrast, the private-sector industry group with the largest number of workers was services. In September 2007, services accounted for 47.9 percent of all private-sector workers, and total compensation costs for this group were $24.91 per hour worked. Another factor affecting total compensation costs is union membership. Union presence in an industry is positively correlated with higher total compensation costs. In 2007, 7.4 percent of privatesector workers were members of a union, compared with 36.2 percent of workers in state and local governments (Figure 2). Among private-sector employers, in September 2007, total compensation costs were $35.92 per hour worked for unionized workers, compared with $24.94 for nonunionized workers. Occupation Groups As with the industry groupings, the concentration of occupations among state and local government employers was quite different from that of private-sector employers. A large percentage of state and local government employees were concentrated in teaching (27.0 percent) and in service occupations (31.8 percent) (Figure 3). Teachers had the highest total compensation costs among state and local government employers, $53.39 per hour worked in September By comparison, the largest percentage of private-sector workers was among sales and office occupations (27.3 percent) and service occupations (25.7 percent). Compensation costs for these occupations were low, for sales and office ($20.86) and service ($13.00). The largest gap in compensation costs between state and local government and private-sector workers was among service occupations. In September 2007, the total compensation costs for these workers in state and local governments was $30.74 per hour, compared with $13.00 per hour in the private sector. This difference is a function of the type of occupations in the services category: Among state and local governments, the BLS categorizes police and firefighters among the service occupations. Among private- 2

3 Figure 1 Employer Costs for Employee Compensation and Percentage of All Employees Participating a in Employee Benefit Programs: State and Local Governments and Private Sector State and Local Governments Compensation Compensation Compensation Compensation Private Sector Percentage Percentage Total of Total Total of Total Employee Benefit Program b Costs Costs Participation Costs Costs Participation (September 2007) (Sept. 2007) (September 2007) (March 2007) ($ per hour worked) ($ per hour worked) Total Compensation Costs $ % c $ % c Wages and salaries c c Total benefits c c Paid leave c c Vacations % % Holidays Sick Other c c Supplemental Pay c c Overtime and Premium d c c Shift differentials c c Nonproduction bonuses Insurance c c Life Health Short-term disability Long-term disability Retirement and savings Defined benefit Defined contribution Legally required benefits c c Social Security and Medicare c c e OASDI e c c Medicare c c Federal unemployment insurance f g c c State unemployment insurance c c Workers compensation c c Source: U.S. Department of Labor, Bureau of Labor Statistics, Employer Costs for Employee Compensation September 2007 USDL: (Washington, DC: U.S. Department of Labor, 2007), National Compensation Survey, Employee Benefits in State and Local Governments in the United States, September 2007 (Washington, DC: U.S. Government Printing Office; 2008), and National Compensation Survey: Employee Benefits in Private Industry in the United States, March 2007 (Washington, DC: U.S. Department of Labor, 2007), Note: Because of rounding, sums of individual items may not equal totals. a b c d g Includes workers covered but not yet participating due to minimum service requirements. Does not include workers offered but not electing contributory benefits. Includes only benefit programs that are partially or wholly paid by the employer. Data not available. Includes premium pay for work in addition to the regular work schedule (such as overtime, weekends, and holidays). e Old-Age, Survivors, and Disability Insurance. Cost per hour worked is $0.01 or less. Less than 0.05 percent. f EBRI Notes June 2008 Vol. 29, No

4 sector employers, occupations such as waiters/waitresses and cleaning and building services functions are categorized as service occupations, and these jobs traditionally have low wages. Employee Benefits As noted above, benefit costs of state and local government employers were 72.8 percent higher than those of private-sector employers in September Many factors contribute to this difference. Benefit Costs The two most important voluntary benefit programs an employer provides are health insurance and a retirement and savings plan. There is great cost disparity between these two benefits among state and local government employers and private-sector employers. In September 2007, the average cost per employee per hour worked for health insurance benefits for state and local government employers was $4.35, compared with $1.85 for private-sector employers (Figure 1), a difference of 135 percent (calculated from Figure 1). The disparity was even larger for retirement and savings plans. These cost state and local government employers $3.04 per hour worked in September 2007, compared with $0.92 for private-sector employers, a difference of 230 percent. Participation One of the primary reasons for the difference in benefit costs is that state and local government workers are more likely than their private-sector counterparts to participate in employee benefit programs. Health insurance participation rates among all employees in state and local governments (72 percent in September, 2007) were significantly higher than rates among all employees in the private sector (52 percent in March, 2007) (Figure 1). The disparity was even larger for retirement and savings plans. In September 2007, 86 percent of all employees in state and local governments participated in some type of retirement and savings plan, compared with 51 percent of all employees in the private sector in March As mentioned above, a key factor here is the type of retirement plan in which employees are participating a defined benefit plan or a defined contribution plan. The growing administrative burdens and costs of operating a defined benefit plan are cited by privatesector plan sponsors as a major disincentive to operating this type of retirement plan (see EBRI Issue Brief, no. 232 April 2001, p. 5). Participation in a defined benefit plan is far higher among all workers in state and local governments (79 percent in September 2007) than among all private-sector workers (20 percent in March 2007) (Figure 1). Conclusion The differences in compensation costs between public-sector and private-sector employers are driven by the differing mix of job functions, work force composition, and concentrations of workers. For example, the education sector employs the largest percentage of state and local government employees (52.7 percent), with compensation costs of $42.48 per hour worked in September Among privatesector employees, service industries account for the largest percentage (47.9 percent), with compensation costs of $24.91 per hour worked. The composition of the benefit package is another major factor in explaining the difference in compensation costs. Benefit participation rates are higher for state and local government employees and the costs of providing these benefits are higher. Several datasets were used in this analysis: For compensation costs, the Bureau of Labor Statistics (BLS), Employer Costs for Employee Compensation: September 2007; for private-sector benefit participation, BLS, National Compensation Survey, Employee Benefits in Private Industry in the United States, March 2007; and for state and local government employers, BLS, National Compensation Survey, Employee Benefits in State and Local Governments in the United States, September Employment by industry group data come from BLS, Employment and Earnings, December 2007; and employment by occupation data are from EBRI tabulations of the Current Population Survey, March 2007 Supplement, U.S. Census Bureau. 4

5 Figure 2 Employment and Total Compensation Costs, by Industry Group and Union Membership, State and Local Governments and Private Sector State and Local Governments Private Sector Total Total Compensation Compensation Employment Costs a Employment Costs a (Sept. 2007) (Sept. 2007) (Sept. 2007) (Sept. 2007) Total 19,391,200 $39.50 Total 116,348,000 $26.09 Education 52.7% Construction 6.7% Hospitals Manufacturing General administration Trade, transportation, and utilities Local government utilities 1.2 b Information Local government transportation 1.3 b Financial activities Other 8.2 b Services Professional and business services Education and health services Leisure and hospitality services Other services Members of a union c Members of a union c c c Non-union workers c Non-union workers c Source: EBRI tabulations of data from U.S. Department of Labor, Bureau of Labor Statistics, Employment & Earnings: December 2007 (Washington, DC: U.S. Department of Labor, 2007), Employer Costs for Employee Compensation September 2007, USDL: (Washington, DC: U.S. Department of Labor, 2007), U.S. Department of Commerce, Bureau of the Census, Statistical Abstract of the United States, 2008 (Washington, DC: U.S. Government Printing Office, 2008), and unpublished data from the U.S. Department of Labor, Bureau of Labor Statistics. Data are expressed as dollars per hour worked. Data not available. Data are for a b c Figure 3 Employment and Total Compensation Costs in State and Local Governments and Private Sector by Occupation Group, Ages 16 and Older State and Local Governments Private Sector Total Total Compensation Compensation Employment Costs Employment Costs (2006) (Sept. 2007) (2006) (Sept. 2007) Total 18,476,664 $ ,348,553 $26.09 Management, professional and related Service % % Professional and related Teachers a Sales and office Natural resources, construction, and maintenance Production, transportation, and material moving Source: EBRI tabulations of data from the Current Population Survey March 2007 Supplement; U.S. Department of Labor, Bureau of Labor Statistics, Employer Costs for Employee Compensation September 2007, USDL: (Washington, DC: U.S. Department of Labor, 2007), and unpublished data from U.S. Bureau of Labor Statistics. a Includes postsecondary teachers; primary, secondary, and special education teachers; and other teachers and instructors. 5

6 References Employee Benefit Research Institute estimates from the Current Population Survey, March 2007 Supplement. McDonnell, Ken. Benefit Cost Comparisons Between State and Local Governments and Private-Sector Employers. EBRI Notes, no. 4 (Employee Benefit Research Institute, 2005): 2 5. U.S. Department of Labor. Bureau of Labor Statistics. Employer Costs for Employee Compensation Historical Listing March 2004 September Washington, DC: Bureau of Labor Statistics, Employment and Earnings, December Vol. 54, no. 12. Washington, DC: Bureau of Labor Statistics, National Compensation Survey: Employee Benefits in Private Industry in the United States, March Washington, DC: Bureau of Labor Statistics, National Compensation Survey, Employee Benefits in State and Local Governments in the United States, September Washington, DC: Bureau of Labor Statistics, VanDerhei, Jack, and Craig Copeland. The Changing Face of Private Retirement Plans. EBRI Issue Brief, no. 232 (Employee Benefit Research Institute, 2001). Wiatrowski, William. (1988) Comparing Employee Benefits in the Private and Public Sector. Monthly Labor Review (December 1988): 3-8. g The Number of Individual Account Retirement Plans Owned by American Families by Craig Copeland, EBRI Introduction The continued growth in assets of individual account retirement plans (employment-based defined contribution (DC) plans (such as 401(k)s) and individual retirement accounts (IRAs)) and the growing reliance of workers on these forms of retirement plans has led to much research on average balances in these plans and the percentage of workers who own them. 1 However, as employment-based defined contribution plans have matured, and the number of workers with these plans has increased, there is a growing probability that when these workers retire or leave their jobs, they will have one or more accounts with a former employer or rollover IRAs. The 2004 Survey of Consumer Finances (SCF) conducted by the Federal Reserve (the latest data available) is used to determine the percentage of family heads and families that own multiple individual account retirement plans those with both a current-job DC plan and an IRA or former-job DC plan. The SCF is the most detailed national survey on the wealth of American families, including wealth held in employment-based retirement plans and IRAs. 2 This research first looks at ownership of individual account retirement plans by family heads, then examines ownership of these plans across families. In brief, the data show that the majority of families in the United States do not own an individual account retirement plan at all, but of those that do own at least one plan, most own only one. However, the minority of families that own more than one individual account plan tend to have a disproportionate amount of the assets in these plans, so looking only at these families current-job DC plan would significantly underestimate their total retirement assets. 6

7 Family Heads Distribution of the Number of Individual Accounts Owned Seventy-five percent of family heads in 2004 did not own either an IRA or a current-job defined contribution (DC) plan (Figure 1). However, 41 percent owned at least one individual account retirement plan. The 25 percent of family heads owning an IRA broke down into 16.2 percent owning one, 6.5 percent owning two, and 2.3 percent owning three or more. For current-job DC plan owners, the distribution was 22.1 percent owning one, 2.2 percent owning two, and 0.2 percent owning three or more. Consequently, 65 percent of IRA owners own only one and 90 percent of current-job DC owners own only one. Of those who own at least one individual account retirement plan, 62 percent only own one. As the age of the family head increases, the likelihood of owning more than one account increases. Among family heads ages 55 64, 26.4 percent own two or more individual plan retirement accounts (48 percent of those owning at least one account). The same pattern occurs as family income increases, as 40.1 percent of family heads with family income of $100,000 or more own two or more individual account retirement plans (53 percent of those that own at least one account). This coincides with the higher assets found in these accounts owned by those in these age and income groups. 3 Distribution of the Number of Individual Accounts Owned by Families Just over one-half (50.9 percent) of American families (head and spouse, if applicable) in 2004 did not own an individual account retirement plan (Figure 2). This number increased for the various types of individual account plans, as 71.1 percent of families did not own an IRA, 69.6 percent did not own a current-job DC plan, and 67.1 percent did not own any DC plans (current or former-job). The breakdown of the 28.9 percent of those owning an IRA is 13.0 percent with one IRA, 8.8 percent with two IRAs, and 7.1 percent with three or more IRAs. The breakdown of ownership for total DC plans was more skewed toward one account than IRA ownership, as 23.7 percent owned one account, 7.5 percent owned two accounts, and 1.6 percent owned three or more. When looking at ownership of the total individual account plans, those with three or more accounts made up 13.5 percent of the families, another 12.6 percent had two accounts, while 23.1 percent had just one account. There is a significant increase in the likelihood that a family owns an account and more than one account as the age of the family head increases through age 65. Among those families with a head younger than 35 years old, 39.5 percent owned an account and 6.6 percent owned three or more accounts. For families with a head years of age, these numbers increased to 61.8 percent and 24.0 percent, respectively. This same pattern holds true across ages for the various types of the individual account retirement plans. An increase in the family s income also is correlated with a significant increase in the ownership of these individual account retirement plans by the family, as well as the percentage with more than one account. Approximately 8 percent of families with income less than $10,000 owned an individual account retirement plan, with just 0.1 percent owning three or more. As family income reached $100,000 or more, 85.1 percent of the families owned an account and 43.5 percent owned three or more. Average and Median Number of Accounts Owned Among families that own an individual account retirement plan, the average number of accounts owned is 2.07 and the median is 2.00 (Figure 3). For those families owning an IRA, the median and average number owned is Among those families owning a current-job DC plan or a current- and/or former-job DC plan, the median is 1.00 account owned and the average is For total DC plan owners, the average number of accounts owned is The average number of individual account plans increases with age through age 65: from 1.63 accounts for those families with a head younger than 35 years old to 2.42 accounts for families with heads ages The increase in family income has the same result. Families with income below $10,000 that own an account on average owned 1.08 accounts, compared with 2.86 accounts owned by families with family income of $100,000 or more. The same patterns emerged for the various account types. Percentage Who Own Current-Job DC Plan Who Own another Plan Many Americans begin their retirement savings through an employment-based retirement plan. Consequently, their main account typically starts as a current-job DC plan, such as a 401(k). The percentage of individuals who have an individual account retirement plan account in addition to this current-job DC plan is an important research topic, as it sheds light on the full extent of individuals and families total retirement assets. 7

8 Figure 1 Distribution of the Number of Individual Account Retirement Plans Owned by Family Heads, by Various Family Head Characteristics and Individual Account Retirement Plan Types, 2004 Individual Retirement Accounts (IRAs) Current-Job Defined Contribution Plans Total Individual Account Retirement Plans Total 75.1% 16.2% 6.5% 2.3% 75.6% 22.1% 2.2% 0.2% 58.9% 25.5% 10.6% 5.1% Age of Head < Race White Non-Hispanic Nonwhite Family Income Less than $10, $10,000 $24, $25,000 $49, $50,000 $99, $100,000 or more Source: Employee Benefit Research Institute estimates from the 2004 Survey of Consumer Finances. Figure 2 Distribution of the Number of Individual Plan Retirement Accounts Owned by Families, by Various Family Head Characteristics and Individual Account Plan Types, 2004 Individual Retirement Current-Job Defined Accounts (IRAs) Contribution Plans Total Defined Total Individual Account Contribution Plans Retirement Plans Total 71.1% 13.0% 8.8% 7.1% 69.6% 22.7% 6.7% 1.1% 67.1% 23.7% 7.5% 1.6% 50.9% 23.1% 12.6% 6.4% 3.8% 3.3% Age of Head < Race White Non-Hispanic Nonwhite Family Income Less than $10, $10,000 $24, $25,000 $49, $50,000 $99, $100,000 or more Source: Employee Benefit Research Institute estimates from the 2004 Survey of Consumer Finances. 8

9 Figure 3 Average and Median Number of Individual Account Retirement Plans Owned by Families Who Own a Specific Account and Any Account, by Various Family Head Characteristics and Individual Account Plan Types, 2004 Individual Retirement Current-Job Defined Total Defined Total Individual Account Accounts (IRAs) Contribution Plans Contribution Plans Retirement Plans Average Median Average Median Average Median Average Median Total Age of Head < Race White Non-Hispanic Nonwhite Family Income Less than $10, $10,000 $24, $25,000 $49, $50,000 $99, $100,000 or more Source: Employee Benefit Research Institute estimates from the 2004 Survey of Consumer Finances. Figure 4 Percentage of Families Who Own a Current-Job Defined Contribution Plan Who Also Own an Individual Retirement Account, or a Former-Job Defined Contribution Job, and the Average Number of Those Accounts Owned, by Various Family Head Characterisitics, 2004 Individual Retirement Accounts (IRAs) Former-Job Defined Contribution Plans Percentage Average Percentage Average Total 38.2% % 1.21 Age of Head < Race White Non-Hispanic Nonwhite Family Income Less than $10, $10,000 $24, $25,000 $49, $50,000 $99, $100,000 or more Source: Employee Benefit Research Institute estimates from the 2004 Survey of Consumer Finances. 9

10 In 2004, 38.2 percent of American families owned a current-job DC plan and an IRA (Figure 4). Of those with an IRA, on average the families own 2.00 IRAs in addition to the current-job DC plan. Among these current-job DC plan owners, 4.3 percent own a former-job DC plan and own an average of 1.21 such accounts. The probability of those having a current-job DC plan and also owning an IRA increases with the age of the family head through age 65 and with family income. The likelihood of those having a current-job DC plan also owning a former-job DC plan decreased as age increased. Five percent of families headed by someone younger than 35 years of age with a current-job DC had a former-job DC plan, compared with 3.8 percent for families headed by someone age The likelihood of owning a former-job DC plan also increases with family income. Conclusion The vast majority of family heads and families own either one individual account retirement plans or have no account. Those families that do own more than one account tend to have family heads between the ages of and with family income of $50,000 or more. Assets in these accounts are also concentrated in families with these characteristics. If a family owning a current-job DC plan owns another individual account retirement plan, they are far more likely to own IRAs and more likely on average to own more IRAs than former-job DC plans. Families headed by younger heads appear to be more likely to leave their assets in a former-job DC plan, while families with older heads appear to roll over their assets to an IRA. Regardless of where families assets are held, they will be missed if the focus of research is only on their current-job DC plan. Endnotes 1 For example, see Craig Copeland, Ownership of Individual Retirement Accounts (IRAs) and 401(k)-Type Plans, EBRI Notes, no. 5 (Employee Benefit Research Institute, May 2008): 2 12; and Jack VanDerhei, Sarah Holden, Craig Copeland, and Luis Alonso, 401(k) Plan Asset Allocation, Plan Balances, and Loan Activity in 2006, EBRI Issue Brief, no. 308 (Employee Benefit Research Institute, August 2007). 2 See Craig Copeland, Individual Account Retirement Plans: An Analysis of the 2004 Survey of Consumer Finances, EBRI Issue Brief, no. 293 (Employee Benefit Research Institute, May 2006) for more information on the Survey of Consumer Finances. 3 See Craig Copeland, Total Individual Account Retirement Plan Assets, by Demographics, 2004, EBRI Notes, no. 3 (Employee Benefit Research Institute, March 2008): 2 9. g New Publications and Internet Sites [Note: To order U.S. Government Accountability Office (GAO) publications, call (202) ] Employee Benefits Martocchio, Joseph J. Employee Benefits: A Primer for Human Resource Professionals. $ The McGraw-Hill Companies, Order Services, P.O. Box , Columbus, OH , (877) , fax: (614) , pbg.ecommerce_custserv@mcgraw-hill.com, Health Insurance Golub, Ira M., and Roberta K. Chevlowe. COBRA Handbook Edition. $245. Aspen Publishers, 7201 McKinney Cir., PO Box 990, Frederick, MD 21705, (800) , U.S. Government Accountability Office. Health Savings Accounts: Participation Increased and Was More Common among Individuals with Higher Incomes. Order from GAO. 10

11 Pension Plans/Retirement Hawthorne, Fran. Pension Dumping: The Reasons, the Wreckage, the Stakes for Wall Street. $ Ingram Publisher Services, One Ingram Blvd., P.O. Box 3006, LaVergne, TN , (800) or (866) , fax: (800) , Web Documents 2008 Investment Company Fact Book Milliman Medical Index National Study of Employers Top Five Total Rewards Priorities Survey Closing the Gap: A Proposal to Deliver Affordable, Quality Health Care to All Americans Comparison of Key Elements of FSAs, HRAs, and HSAs Defined Contribution Pension Plans in the Public Sector: A Best Practice Benchmark Analysis Employer Comparable Contributions to Health Savings Accounts Under Section 4980G; Final Regulations [as published in the Federal Register on April 17, 2008] January 2008 Census Shows 6.1 Million People Covered by HSA/High-Deductible Health Plans Myths and Facts Regarding 401(k) Plan Fees National Compensation Survey: Retirement Benefits in State and Local Governments in the United States, Participant Perceptions and Decision-Making Concerning Retirement Benefits [Working Paper] Regulation Relating to Qualified Default Investment Alternatives in Participant-Directed Individual Account Plans Social Security Programs Throughout the World: The Americas,

12 EBRI Notes i EBRI Employee Benefit Research Institute Notes (ISSN ) is published monthly by the Employee Benefit Research Institute, th St. NW, Suite 878, Washington, DC , at $300 per year or is included as part of a membership subscription. Periodicals postage rate paid in Washington, DC, and additional mailing offices. POSTMASTER: Send address changes to: EBRI Notes, th St. NW, Suite 878, Washington, DC Copyright 2008 by Employee Benefit Research Institute. All rights reserved, Vol. 29, no. 6. Who we are What we do Our publications Orders/ subscriptions The Employee Benefit Research Institute (EBRI) was founded in Its mission is to contribute to, to encourage, and to enhance the development of sound employee benefit programs and sound public policy through objective research and education. EBRI is the only private, nonprofit, nonpartisan, Washington, DC-based organization committed exclusively to public policy research and education on economic security and employee benefit issues. EBRI s membership includes a cross-section of pension funds; businesses; trade associations; labor unions; health care providers and insurers; government organizations; and service firms. EBRI s work advances knowledge and understanding of employee benefits and their importance to the nation s economy among policymakers, the news media, and the public. It does this by conducting and publishing policy research, analysis, and special reports on employee benefits issues; holding educational briefings for EBRI members, congressional and federal agency staff, and the news media; and sponsoring public opinion surveys on employee benefit issues. EBRI s Education and Research Fund (EBRI-ERF) performs the charitable, educational, and scientific functions of the Institute. EBRI-ERF is a tax-exempt organization supported by contributions and grants. EBRI Issue Briefs are periodicals providing expert evaluations of employee benefit issues and trends, as well as critical analyses of employee benefit policies and proposals. EBRI Notes is a monthly periodical providing current information on a variety of employee benefit topics. EBRI s Pension Investment Report provides detailed financial information on the universe of defined benefit, defined contribution, and 401(k) plans. EBRI Fundamentals of Employee Benefit Programs offers a straightforward, basic explanation of employee benefit programs in the private and public sectors. The EBRI Databook on Employee Benefits is a statistical reference work on employee benefit programs and work force-related issues. Contact EBRI Publications, (202) ; fax publication orders to (202) Subscriptions to EBRI Issue Briefs are included as part of EBRI membership, or as part of a $199 annual subscription to EBRI Notes and EBRI Issue Briefs. Individual copies are available with prepayment for $25 each (for printed copies). Change of Address: EBRI, th St. NW, Suite 878, Washington, DC, , (202) ; fax number, (202) ; subscriptions@ebri.org Membership Information: Inquiries regarding EBRI membership and/or contributions to EBRI-ERF should be directed to EBRI President/ASEC Chairman Dallas Salisbury at the above address, (202) ; salisbury@ebri.org Editorial Board: Dallas L. Salisbury, publisher; Steve Blakely, editor. Any views expressed in this publication and those of the authors should not be ascribed to the officers, trustees, members, or other sponsors of the Employee Benefit Research Institute, the EBRI Education and Research Fund, or their staffs. Nothing herein is to be construed as an attempt to aid or hinder the adoption of any pending legislation, regulation, or interpretative rule, or as legal, accounting, actuarial, or other such professional advice. EBRI Notes is registered in the U.S. Patent and Trademark Office. ISSN: /90 $ Did you read this as a pass-along? Stay ahead of employee benefit issues with your own subscription to EBRI Notes for only $89/year electronically ed to you or $199/year printed and mailed. For more information about subscriptions, visit our Web site at or complete the form below and return it to EBRI. Name Organization Address City/State/ZIP Mail to: EBRI, th St. NW, Suite 878, Washington, DC, or Fax to: (202) , Employee Benefit Research Institute Education and Research Fund. All rights reserved.