EBRI: Plan Participation Among Families Is Up

July 23, 2003 (PLANSPONSOR.com) - More than four out of 10 families had a participant in an employment-based retirement plan in 2001, a level virtually unchanged from 1998's figures.

The figures from 2001 might not indicate much of a shift in the previous three years, but going back to 1992, headway is being made on increasing participation levels.   Where in 2001, 41.6% of families were represented by participation in either a defined benefit or defined contribution plan, in 1992, this same figure was only 38.8%, according to a release of data on the Survey of Consumer Finances by the Employee Benefit Research Institute (EBRI).

In fact, the percentage of families participating only in a defined contribution plan rose to 57.7% in 2001, from 37.5% in 1992.   Conversely, only 19.5% of families had only a defined benefit plan in 2001.

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Additionally, the recent results showed 31.4% of families owned either an individual retirement account (IRA) or a Keogh plan, an increase from 28.4% in 1998 and 26.1% in 1992. Furthermore, more than half (58.6%) of families had a participant in a current or previous employer’s retirement plan or an IRA/Keogh, which is an increase from the 53.3% in 1992.

Contributions Levels

Looking at the defined contribution plan, plan balances are also on the rise – albeit the data only includes 2001’s figures, which missed a year of market declines in 2002.   Among all families with a defined contribution plan in 2001, the median plan balance was $18,000, an 81.8% increase from the 1992’s figures and a 10.2% rise since 1998. Similarly, among families with an IRA/Keogh plan, the median value of their plan was $27,000 in 2001, up 24% from 1998.

Outside of the employer-sponsored retirement plan, EBRI’s study also examined IRA holdings among families.   Not surprisingly, the most commonly owned IRA was the regular IRA, owned by 42.2% of family heads. This was followed by:

  • Rollover IRA held by 25.7%
  • Roth IRA owned by 16.4%.

However, when broken down by assets, family heads with rollover-IRAs-only moved to the top spot, accounting for 36.0% of the total assets, while the owners of regular-IRAs-only accounted for 31.3% of the assets.

Insurance Broker Comp Now Draws Spitzer's Gaze

June 11, 2004 (PLANSPONSOR.com) - Three large U.S. insurance providers revealed Friday that they had been hit with subpoenas from New York Attorney General Eliot Spitzer seeking information on broker compensation.

The latest information demands to Aetna Inc., CIGNA Corp., and MetLife, Inc. are part of the attorney general’s broader investigation into whether fees that insurers pay brokers as an incentive to sell their products pose a conflict of interest .

Late Thursday, theHartfordsaid that it, too, had received a subpoena.   The investigation reportedly centers on compensation paid to brokers for exceeding sales goals and keeping down claims costs that may undermine the brokers’ loyalty to their customers, both corporations and consumers, who pay the same brokers fees and commissions to arrange coverage.  

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Several insurance brokers disclosed in late April that they had received subpoenas from Spitzer, including Marsh and Aon, the two largest in the world, and Willis Group Holdings, according to the NY Times.  

It’s the latest in a series of investigative forays for Spitzer’s office which, in addition to the mutual fund trading scandal, has recently initiated investigations of variable annuity practices (see  Spitzer Turns Regulatory Gaze on Variable Annuity Products ) health insurance companies (see  Spitzer Goes After Health Plans ), and ex-NYSE Chairman Dick Grasso’s compensation package (see  Spitzer Slaps Former NYSE Head Grasso with Pay Suit ).

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