Benefits April 28, 2003

Boomers, Gen Xers Will Have, Need More Retirement Income: GAO

April 28, 2003 (PLANSPONSOR.com) - The continued shift from defined benefit to defined contribution plans does not appear to have much effect on the relative pension income of "Boomers" and Gen Xers, according to a new report.
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In fact, the General Accounting Office (GAO) says that Boomers and Gen X households headed by an individual aged 25 to 34 appear to have significantly more assets on an inflation-adjusted basis than current retirees did at the same age. On the other hand, they also appear to have more debt.

Housing, Pension Impact

Most of the large increase in assets between current retirees and the Baby Boom generation is due to increased ownership and equity in housing. The GAO report, done at the request of Representative Rob Andrews (D-New Jersey), ranking minority member, Subcommittee on Employer-Employee Relations, Committee on Education and the Workforce, notes that contributions to DC pension plans play a role in explaining what the report characterized as a “modest increase in assets” between the Baby Boom and Generation X, in part because data utilized in its analysis did not reflect the value of future benefits from DB pension plans.

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Perhaps not surprisingly, of the three generational groups, members of Generation X carry the most debt. Still, for Baby Boom and Generation X households with positive net worth – that is, where assets exceed debt – at age 25 to 34, net worth is 60% greater than that of current retirees when they were the same age.

Living Longer

The report cautioned, however, that particularly for Generation X, greater life expectancy may require more assets to cover more years in retirement and greater assets may also be required to support higher standards of living. They may also not have the resources currently available to retirees, or projected to be there for Boomers – notably Social Security.

The GAO report notes that while Generation X workers will likely have similar levels of retirement income in real terms (adjusted for inflation) at age 62 as their counterparts in the Baby Boom generation, the former may only be able to replace a smaller percentage of their preretirement income. Possible contributors to this impact are reduced Social Security benefits for Gen Xers compared with current levels and/or higher taxes and delayed eligibility, according to the report.

The report acknowledges that worker income and education levels will have an impact on retirement income, noting that retirement income is lower for the less educated and for single women.

Compliance April 25, 2003

EEOC Expands Mediation Program

April 25, 2003 (PLANSPONSOR.com) - Civil rights boards in nine states are joining the US Equal Employment Opportunity Commission (EEOC)'s voluntary mediation program to settle private-sector discrimination charges.
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>Under a pilot program, the agency’s district offices will send appropriate charges to the participating Fair Employment Practices Agencies (FEPAs) for mediation. If both sides can hammer out an agreement, the FEPA mediator will help the parties draft a settlement agreement, which is then returned to the EEOC for closure under routine procedures. If the parties are unable to settle, the case goes back to the EEOC for investigation, the agency said in an announcement. Local EEOC officials will monitor and document the FEPAs’ mediation performance.

>The latest agencies to join the EEOC program on a contract basis include:

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  • The Alaska Commission for Human Rights
  • The City of New York Commission on Human Rights
  • The Florida Commission on Human Rights
  • The Indiana Civil Rights Commission
  • The Iowa Civil Rights Commission
  • The Kansas City Human Relations Department
  • The Ohio Civil Rights Commission
  • The New Mexico Department of Labor
  • The South Carolina Human Affairs Commission.

>The launch of the FEPA Mediation Pilot follows the recent implementation of a “Referral Back” Mediation Pilot for private employers, in which discrimination charges filed with the EEOC will be sent back to a participating employer’s internal dispute resolution program, as appropriate.

>Under the EEOC’s National Mediation Program, first implemented in 1999, EEOC has conducted more than 44,000 mediations, resolving over 29,000 charges and obtaining over $400 million in benefits with an average processing time of 86 days. In total, EEOC maintains contractual relationships and worksharing agreements with over 90 FEPAs nationwide to process discrimination charges filed against private employers or state and local governments.

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