Benefits January 18, 2005

Retirement Plan Participation on the Rise

January 18, 2005 (PLANSPONSOR.com) - Employee participation in individual retirement plans has increased considerably from 1996 to 2001, according to the Employee Benefits Research Institute (EBRI).
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In what seems to be an encouraging sign for retirement savings, worker participation in a 401(k)-type plan increased from 23% in 1996 to 28% in 2001, while the percentage of those who owned an individual retirement account (IRA) increased from 16% in 1996 to 19% in 2002. The percentage of Americans owning either type of plan increased from 34% to 40% over that time frame, while the percentage owning both increased from 6% to 9%.

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The average 401(k)-type plan balance for those between the ages of 21 and 64 rose from $25,208 in 1996 to $33,647 in 2002, while the average IRA balance increased from $23,025 to $26,951 over the same duration, according to the study. The percentage of workers who contributed their maximum amount to their 401(k) rose from 3.2% to 5.6% from 1996 to 2001.

Not surprisingly, the number of years contributing to plan correlates highly with account balance, with 13 years being pegged by EBRI as sufficient to support “a number of years” of retirement. Only 20% have reached such a threshold, however.

There is also a strong correlation between age and participation, the study finds, with only 10% of those between the ages of 21 and 24 holding an account, compared to over 50% for those between 55 and 64. Workers who are white, married or male are also more likely to own such accounts and have higher balances than their comparison groups, the study found.

The EBRI study also looks at the income for elderly Americans. It was found that the median income level for the elderly population in 2003 was $15,007, up from the 1975 figure of $11,376 (constant 2003 dollars were used in the calculation). Social security made up the largest portion of retirement income for those over 65 in 2003, accounting for 41.9% of income on average. Retirement plans made up 20.6%, income from assets 13.9%, and earnings 21.7%. Elderly women (50.8%) derived much more of their income from Social Security than did men (35.5%). The lowest quintile received 91.2% of their retirement income from Social Security in 2003, while the highest quintile received 19.5% of their income from the federal retirement program.

The EBRI study is available here .

Compliance January 14, 2005

Civil Rights Battle Brewing Over HIV Firing Appeal

January 14, 2005 (PLANSPONSOR.com) - Civil rights advocates are warning that a Denver federal judge's ruling that a blood bank was entitled to transfer an HIV-positive employee to a job with no donor contact could open disabled workers up to new workplace discrimination.
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>Plaintiff John Couture has appealed the August 2004 ruling by US District Judge Robert Blackburn dismissing his suit against the Bonfils Blood Center and several civil rights groups are trying to intervene in the case before the US 10 th Circuit Court of Appeals, according to an Associated Press news report.

According to the AP, Couture told a supervisor at Bonfils he had the AIDS virus in 2001, when Couture was training to take blood from donors. The two sides disagree about the circumstances of Coutre’s subsequent departure from Bonfils; the company said Couture resigned when he was offered the other job with no donor contact while he insisted his departure was against his will because he wanted to stay in the old job.

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dismissed Couture HIV discrimination suit, ruling that the worker hadn’t suffered harm because he voluntarily resigned and that he didn’t have legal standing to sue because his former employer had offered him a job with the same salary and benefits.

The civil rights groups have asked the 10 th Circuit for permission to intervene in the appeal, saying that Blackburn’s decision could open gaping holes in discrimination protections – a request Bonfils is opposing. “What the court is essentially saying is it’s not discriminatory to so-called laterally transfer those people to a back-office, stockroom job,” John Hummel, an attorney for The Center’s Legal Initiative Project, told the AP.

Couture, who said he hoped to use the blood bank job to start a medical career, now works as a dialysis technician. He said he first filed the lawsuit just to get his job back but now sees an opportunity for public education.

“There might be a slight decline (in blood donations) until they can get the word out there’s no way you can get HIV while giving blood,” he told the AP. “(Any perceived threat) is all supposition. The bottom line is, was my HIV status ever going to get out to the public? Probably not.”

Bonfils supplies more than 80% of the blood used in Colorado hospitals. The Supreme Court and lower federal courts have held that HIV infection is a disability, meaning the Americans with Disabilities Act bars employers from discriminating against HIV-positive plaintiffs.

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