EBRI 2022 Year in Review

This year, the Employee Benefit Research Institute (EBRI) focused on financial wellness, relaunched our retirement security calculator, and investigated new challenges facing the provision of employee health benefits. In addition, EBRI continued recognition of retirement security leadership and prepared for the retirement transition of our own CEO. In this year in review, we recognize these goings-on and more.

1. Collaborative Research — This year marks the third anniversary of the Public Retirement Research Lab (PRRL), a collaborative effort between EBRI and the National Association of Government Defined Contribution Administrators (NAGDCA). Over these three years, PRRL has released a dozen research reports on the savings experiences of public defined contribution plan participants. In the most recent study, conducted in collaboration with JPMorgan (with which EBRI commenced a consumer research collaboration in 2021), we found that households with public-sector DC plan participants who have a primary DB plan feel more comfortable spending than those without a primary DB plan. The comfort level of those with a primary DB plan may be misplaced for the households with newly hired participants, as the benefits from the primary plan are likely to be less than those of longer-tenured or retired cohorts. As a result, the households with new hires may not be as prepared for retirement as they expect.

2. Retirement Summit —Joined by representatives of the U.S. Department of Labor and the U.S. Chamber of Commerce, EBRI hosted a full-day Retirement Summit on December 1, 2022. The event convened high-ranking thought leaders in the retirement industry, including employers, consultants, policymakers, regulators, and academics to tackle the important challenge of creating a more integrated, equitable, and effective U.S. retirement system. The Summit drew upon a history of public and private convenings aimed to improve American savings, namely the 1998, 2002, and 2006 National SAVER Summits. Topics of the Summit were (1) improving individuals’ access to the retirement system; (2) reducing leakage from the retirement system; (3) helping people spend down their assets in retirement (generating income); and (4) improving the investment outcomes for American workers within the retirement system.

3. Ray Lillywhite Award —EBRI awarded Sens. Rob Portman (R-OH) and Ben Cardin (D-MD) this year’s Ray Lillywhite Award, which honors individuals for their extraordinary lifetime contributions to Americans’ economic security. Sens. Cardin and Portman were selected for the award in recognition of their tireless and inspirational leadership and advocacy in advancing policies to improve the retirement system for workers and retirees alike. The award also comes as Sen. Portman retires from the Senate.

4. CEO Retirement —We can’t talk about retirement security leadership without recognizing the contributions of our own CEO, Lori Lucas. Her history with EBRI dates back to 1999: Before signing on as president and CEO in 2018, she held roles that included vice chair and research chair. Lori coincidentally began her tenure as EBRI president and CEO in the same year the organization celebrated its 40th anniversary, and she was instrumental in implementing a new vision — one that took EBRI into the future while honoring and preserving the organization’s deep history, founding mission, and established reputation as the premier research organization across all aspects of the employee benefits space. The entire EBRI team wishes Lori the best on her next adventure and looks forward to remaining connected as she becomes CEO emeritus.

5. Ballpark E$timate Relaunch — In honor of National Retirement Security Week, EBRI announced the launch of a re-envisioned Ballpark E$timate® calculator to help individuals estimate their savings needs and future spending during retirement. Originally launched as a part of the EBRI Emmy-Award-winning “Choose to Save” campaign several decades ago, the Ballpark E$timate has been redesigned to better help people connect with their future retired selves — and be more apt to engage and take steps to improve retirement outcomes.

6. Financial Wellbeing —EBRI conducted its fifth annual Financial Wellbeing Employer Survey (FWES) and its fifth Financial Wellbeing Symposium in 2022, exploring how employers are adapting their financial wellness solutions to their employees’ evolving needs — and to their own new budgeting constraints. Another key focus of EBRI research in this area was learning how employers are gauging and measuring the success of their financial wellness offerings.

7. Health Savings Accounts (HSAs) and Pre-Deductible Coverage —EBRI’s work on this topic underscores two convergent themes: the intersection of health and wealth and value-based insurance design. IRS Notice 2019-45 allows HSA-eligible health plans the flexibility to cover 14 medications and other health services used to prevent the exacerbation of chronic conditions prior to meeting the plan deductible. EBRI found that expanding coverage for these services would have a small impact on premiums. Similarly, if employers were allowed to expand coverage beyond the IRS-allowed 14 services, the impact on premiums would also be small.

8. Virtual Care — COVID-19 changed the landscape of health care in the United States in 2020, and telemedicine offered a unique solution for addressing health care needs within the challenges of a pandemic. EBRI’s research series on telemedicine found a significant decline in face-to-face services and a significant increase in telemedicine visits at the onset of the pandemic. Use of telemedicine does not necessarily induce higher health care spending, however, as patients who used telemedicine also used in-person services more frequently compared with patients who did not use telemedicine, and the successful management of chronic conditions can help prevent the onset of more serious illnesses and more costly care in the future.

9. Preventive Services —Coverage for certain preventive services that are covered under the Patient Protection and Affordable Care Act (ACA) may be in question, as a case before the U.S. District Court for the Northern District of Texas challenges that mandatory coverage. A new EBRI pulse survey of employers asked what actions they might take if allowed to reintroduce cost sharing on preventive services, and 80 percent of HR decision makers who responded said they would continue to cover preventive services. EBRI research also found that adding cost sharing for these preventive services would have next to no impact on employer spending.

10. Mental Health — Mental health is an increasing concern in America, with rising rates of both adults (1 in 5) and youth (1 in 6) experiencing mental illness each year and over 20 million Americans having a substance use disorder. The COVID-19 pandemic has further exacerbated this problem nationally and in the workplace. With increases in both the number of individuals diagnosed with mental health disorders and use of health care services, higher spending is of great concern to plan sponsors of health benefit programs. EBRI’s work on mental health spending and the inclusion of mental health issues in the FWES help demonstrate the growing connection between insurance coverage, financial security, and mental health.

11. Diversity — EBRI continued to apply a diversity, equity, and inclusion (DEI) lens on employee benefits this year with new analyses on the LGTBQ community, women, and the Hispanic and Blackcommunities. In addition, we formalized EBRI’s DEI Council — which, among other goals, informs EBRI’s research from a diversity, equity, and inclusion perspective. The DEI Council’s initial output was a roundtable discussion of the impact of student loan debt on diverse workers’ financial stability. The Council addressed findings from the student loan debt research of EBRI and others, including key takeaways and possible implications and solutions.

Helping Workers Empathize With — and Plan for — Their Future Selves

Retirement confidence and retirement knowledge go hand in hand: According to the Retirement Confidence Survey, workers who are confident in their retirement prospects are far more likely to have calculated how much money they will need to live comfortably in retirement than workers who are less confident (53 percent vs. 18 percent, respectively). 

In recognition of this fact, the Employee Benefit Research Institute has long championed the idea that retirement savings calculators should be simple. Indeed, that was a key part of EBRI’s Emmy award-winning, multimedia Choose to Save® educational campaign, which started in the 1990s: to provide consumers with a wide variety of free savings tools and information to help them plan for all aspects of their financial security. Essential to that effort was the original Ballpark E$timate® retirement planning calculator, which was geared to quickly help workers estimate how much they need to save for retirement.

Today, retirement calculators like the original Ballpark E$timate have become commonplace. Yet, as recently as this year, the Retirement Confidence Survey finds that fewer than half of both workers and retirees have tried to calculate how much money they need for retirement.

One reason behavioral economists give for workers’ disinterest in planning for retirement is lack of empathy for their future retired self. Indeed, studies suggest that young people may identify as little with their future, older selves as they do with complete strangers.[1] That’s why, when EBRI recently reimagined its Ballpark E$timate tool, we designed it with an eye to helping people connect with their older selves — and therefore be more apt to engage and take steps to improve outcomes. EBRI’s new Ballpark E$timate achieves this by asking users to consider their current state of retirement savings and then to envision what their retired state might look like. Based on analysis from the Health and Retirement Study (HRS), the tool then categorizes users — much like an online personality-type quiz would.

Borrowing another concept from behavioral finance — social comparisons — the Ballpark E$timate further compares users by type (again, using data from the Health and Retirement Study). For example, say the user learns that she will likely be in the “Struggling” category in retirement. The Ballpark E$timate will explain that Struggling Retirees have average spending that is in the lowest quartile of retirees. This, ideally, prompts users to explore how they can move into a better retiree category. To help with that, the Ballpark E$timate shows other retirement types that users can aspire to — as well as what it takes to get to these outcomes in terms of additional savings.

Finally, the Ballpark E$timate shows how much retirees spend in retirement.  For example, Struggling Retirees would be told that based on their retiree profile, their average annual before-tax retirement expenses would be just over $18,000 in today’s dollars. Users would also be told that much of this spending tends to go to housing — 47 percent according to analysis of HRS data — with 13 percent going to food and 11 percent going to health care.

Ideally, the behavioral prompts within the Ballpark E$timate help users:

• Envision themselves in the retirement reality for which they are on track.
• Determine if that is the reality they want for their future self.
• If not, change their approach to saving for retirement.

EBRI is excited to roll out its new and improved Ballpark E$timate. We thank the RRF Foundation on Aging for their support, as well as members of EBRI’s Retirement Security Research Center for their input on this important initiative.

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[1]Hershfield, Hal E. and Daniel M. Bartels (2018), “The Future Self,” In Oettingen, G., Sevincer, A.T., & Gollwitzer, P.M. (eds). The Psychology of Thinking about the Future. The Guilford Press, 89-109

Understanding the Toll of Caregiving on Financial Security

Rosalynn Carter, former first lady, once said, “There are only four kinds of people in this world: those who have been caregivers, those who are currently caregivers, those who will be caregivers, and those who will need caregivers. Caregiving is universal.”

My husband falls into the first category, as he was my caregiver a year ago when I broke my leg so severely that I was confined to a wheelchair for months.  In addition to taking care of me — which included ferrying me to doctors’ appointments and physical therapy — he continued to work full time, take care of all of the household chores, etc.

As most caregivers find, it wasn’t easy. Indeed, caregivers report tolls including physical strain, emotional stress, and difficulty caring for their own health. But what may be less appreciated is the financial strain of being a caregiver.  Indeed, a report by AARP and the National Alliance for Caregiving found that more than a quarter of caregivers forgo saving, more than one-fifth have used up their personal short-term savings, and more than one-tenth have used long-term savings — such as retirement accounts — while caregiving.

In October, the 33^rd annual Retirement Confidence Survey (RCS) will turn its attention to the retirement challenges faced by workers and retirees who are caregivers of parents, spouses, or children with special needs. In addition to its traditional core findings, the survey will compare workers and retirees with their caregiving counterparts when it comes to financial goals, planning for retirement, retirement confidence, preparing and transitioning to retirement, workplace savings, trusted sources of information, and income and spending in retirement.

Meanwhile, the Workplace Wellness Survey will also tackle the topic of caregiving, comparing workers with their caregiving counterparts when it comes to workplace financial wellness, including debt and emergency savings assistance, voluntary benefits, mental health, worker satisfaction with benefits, work-life balance, and flexible work arrangements.

We have a five-star group of sponsors for both surveys, but more are welcome.  If the impact of caregiving on retirement and overall financial wellness are priorities for your organization, please join us in this important research by reaching out to Romanchak@ebri.org.

Taking Care of Your Future Self

How many times have you made a commitment that your Future Self regretted? For example, perhaps in January you agreed to attend a work function in June, imagining how great it would be for your career. Yet, by June, your Current Self thinks mainly about how inconvenient the function is and feels a certain resentment that Past Self committed to it.

Researchers call this temporal discounting, a phenomenon whereby people feel more connected to their current self than their future self, and indeed greatly discount the future self’s needs. According to researchers Hal Ersner-Hershfield et al., this lack of empathy for one’s future self may have implications for saving for retirement. “If people consider the future self as a stranger, then they may rationally have no more reason to save money for themselves than to give the money to a stranger.”[1]

I thought about this as I was reviewing EBRI’s recent “Retiree Reflections” research. Fielded in Spring 2022, the survey asked more than 1,100 American retirees between the ages of 55 and 80 what they wished they’d done differently in preparing for retirement. For many, the message was clear: They wished their younger selves had been a lot more considerate of their future selves. They wished they’d planned earlier for retirement and changed their financial habits during their working years to improve their current financial situation. Specifically, they wished they’d spent less on discretionary items such as vacations, friends, and even children’s college tuition. One wrote, “Instead of buying trendy clothes/shoes I should have bought stocks.” Another opined they would have been better off it they had: “Saved more and not gave too much to my kids.”

Yet, the next generation of retirees may not fare much better than today’s retirees. According to the 2022 Retirement Confidence Survey (RCS), 4 in 10 workers say that saving for or paying off a child’s education is reducing the amount they are saving for retirement. And nearly half of workers say debt has negatively impacted their ability to save for retirement. Worse, over its long history, the RCS has consistently shown that workers tend to expect their future selves to work longer than retirees say they actually do.

Ersner-Hershfield et al. propose that allowing people to interact with age-progressed renderings of themselves could cause them to allocate more resources to the future. Indeed, participants in one of their researchers’ studies interacted with realistic computer renderings of their future selves using immersive virtual reality hardware and interactive decision aids. In all cases, the research found, those who interacted with their virtual future selves exhibited an increased tendency to accept later monetary rewards over immediate ones — in other words, savings behaviors. With respect to retirement, the RCS shows that just going through the exercise of calculating how much one needs to save for retirement may help make it easier for workers to identify with their future retired self. According to the RCS, workers who perform such a calculation are dramatically more likely than those who have not to report they or their spouse have saved any money for retirement and to say they or their spouse are currently saving for retirement. Or perhaps such individuals started out more empathetic with their future selves to begin with.

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[1] “Saving for the future self: Neural measures of future self-continuity predict temporal discounting.” Hal Ersner-Hershfield, G. Elliot Wimmer, and Brian Knutson. Department of Psychology, Stanford University, 2009.

The Cost of Miscalculating Investment Risk-Taking

I invested in my first mutual fund when I was in my 20s. It was a balanced fund, with 40 percent in fixed income.

Why did I invest so much in fixed income when I was that young, knowing I was saving for the long term? I was an inexperienced investor at that time. Further, Black Monday was fresh in my mind — with the Dow Jones Industrial Average dropping 22.6 percent in one day in 1987. This led me to conclude that it was best to start out conservative — without realizing how much upside I might sacrifice over a long time horizon.

It turns out that even today, some young people are still prone to favoring heavy fixed income allocations in their retirement portfolios. According to new findings from EBRI and NAGDCA’s Public Retirement Research Lab (PRRL), the typical state of California government worker aged 25 to 34 has more than a third of their defined contribution (DC) assets in short-term fixed income and stable-value funds. This contrasts with typical target-date fund allocations of just over 10 percent in fixed income for those with 30- to 40-year time horizons.

Of course, 25- to 34-year-old Californian public DC plan investors may feel good about limiting their exposure to the stock market given recent volatility. But the fact remains that stocks outperformed short-term bonds in almost 90 percent of the 10-year periods since I started investing, and the average annual outperformance of stocks over short-term fixed income for that full time period was nearly 10 percentage points.

Interestingly, when we look at how 25- to 34-year-old public DC plan employees are invested across the rest of the country, we find that the short-term fixed-income and stable-value allocations are much lower. Instead, for these investors, target-date funds are the most prevalent allocation — with an average allocation of 74 percent among the youngest demographic nationwide (excluding California).

Of course, sponsors of government plans may take the position that because many government workers will ultimately have defined benefit plan income at their disposal in retirement, there is less need for these workers to assume stock-market risk within their defined contribution plans. As such, conservative investing by young government workers shouldn’t be considered a problem. On the other hand, the presence of a defined benefit annuity to provide secure income in retirement might give participants freedom to take on more risk in their defined contribution accounts. And further, leaving money on the table is rarely an ideal investment strategy.

Launching EBRI’s New Diversity, Equity, and Inclusion Council

The Employee Benefit Research Institute has been focusing increasingly on research that helps policymakers, providers, employers, and others better understand the impact of employee benefits on diverse communities. Such research in the past year includes the following Issue Briefs:

• The “Examining HSAs Through a DEI Lens” Issue Brief examined the stark differences in HSA behavior that are found based on accountholder race, ethnicity, gender, and income.
• The “Impact of Five Legislative Proposals and Industry Innovations on Retirement Income Adequacy” Issue Brief found that proposals such as expanding automatic enrollment and enhancing the Saver’s Credit could have the greatest positive impact on the net outcomes of families headed by Black and Hispanic workers.
• “Understanding the Finances of Rural vs. Urban Americans“ revealed that rural Americans were more likely to own their home and a vehicle, while they were less likely to own a retirement account or stocks and mutual funds than were urban Americans.
• “Making Workplace Wellness Programs Fit the Needs of Black and Hispanic Workers: Findings From the 2021 Workplace Wellness Survey” identified that higher-income Black and Hispanic workers were less likely than White workers to give top ratings to their employers’ efforts to improve various aspects of worker well-being across physical health, emotional/mental health, and financial dimensions.
• Meanwhile, “2021 EBRI Financial Wellbeing Employer Survey: Focus on COVID-19 and Diversity Goals” found that benefit decision makers were highly likely to agree that their companies provide safe spaces for their employees to provide feedback on their needs, understand the needs of their distinct employee population, and have put substantial effort into identifying the financial wellness needs and inequities among their work force demographics.
• “Labor Force Participation and the Pandemic: Making Sense of the Changes” showed that Black Americans stood out as being particularly hard hit during 2020; Black American males and females had the largest percentage decline in the number employed from 2019 to 2020.
• “2021 Retirement Confidence Survey: A Closer Look at Black and Hispanic Americans” revealed that the wealth gap between White Americans and Black or Hispanic Americans remains even as income rises, and that Black and Hispanic Americans were more likely to consider debt to be a major or minor problem for their household than White Americans, across each income group.
• “The Status of American Families’ Accumulations in Individual Account Retirement Plans and Differences by Race/Ethnicity: An Analysis of the 2019 Survey of Consumer Finances” learned that families with minority heads were much less likely to have individual account retirement plans, and when they did own these plans, the median amount held in them was significantly less than for those with White, non-Hispanic heads.

About EBRI’s Diversity, Equity, and Inclusion Council

In order to better understand the diversity, equity, and inclusion (DEI) research needs of EBRI’s members and the benefits community in general, EBRI is forming a Diversity, Equity, and Inclusion Council. This will consist of DEI-focused individuals within EBRI member organizations.

The EBRI DEI Council will:

We will kick off the Council shortly and will have a DEI discussion group at our upcoming Research Committee meeting in May. If you are interested in participating in this council, please let me know at lucas@ebri.org.

Talking About My Generation: Comparing the Financial Wellness of Baby Boomers, Gen Xers and Millennials

In a recent discussion of environmental, social, and governance (ESG) investments with EBRI members, we considered how social concerns of prior generations of Americans in their twenties aligned with those of twenty-somethings today. Being a late Baby Boomer, I was dubious: The 1980s were the era of “Wall Street” and Gordon Gekko, after all — not social consciousness. Yet at the same time, early Baby Boomers who came of age in the 1960s and 1970s were of a different mindset still.

While we didn’t come to any definitive answer about social awareness across generations on the call, EBRI does have some definitive data on financial preparedness across generations. In a recent Issue Brief, EBRI used Survey of Consumer Finances (SCF) data to compare the financial wellbeing of Baby Boom, Generation X, and Millennial families of the same age. The findings were not encouraging.    

Overall, Generation X families were less likely to own a home or have any retirement plan than were Baby Boom families at the same ages. Further, the share of families having any retirement plan was lower among Generation X families than among Baby Boom families at the same ages across most race/ethnicity categories.

For Millennial families, things look even worse. According to the SCF data, homeownership rates are lower for Millennials than for Generation X families at the same ages. Further, the median net worth of Millennial families was lower than for Generation X families of the same ages, driven by the much lower net worth of those in the highest income quartile.

The one overriding financial indicator that was universally higher for the Millennial families compared with the Generation X families is not a good one: Millennials’ median debt levels are higher, led by substantially higher incidence and amounts of student loan debt. Further, Black and lower-income Millennials were particularly impacted by increased student loan debt. Black Millennials have also particularly experienced higher median debt-to-asset ratios compared with their Generation X peers as a result.

According to EBRI’s Employer Financial Wellbeing survey, employers are taking steps to understand the financial wellbeing needs of diverse workers, including surveying employees and holding focus groups. They are also adding diversity, equity, and inclusion efforts to their financial wellness strategy, such as offering communication and education materials in multiple languages (40 percent), ensuring that the look and feel of communications/solutions is diverse (39 percent), and ensuring that financial counselors or coaches are diverse in terms of race and ethnicity (36 percent). This latter effort dovetails with the fact that, according to the 2022 Retirement Confidence Survey, Hispanic and Black Americans are more likely to say that a connection or commonality between them and the advisor is important. This includes a preference for working with an advisor who has had a similar upbringing or similar life experiences to them, working with an advisor who is affiliated with their employer, working with an advisor who has a similar racial/ethnic background to them, and working with an advisor who is the same gender as them. Black and Hispanic workers were also more likely to say that one-onone, personalized education would be a valuable potential improvement to workplace retirement savings plans.

Why Patients Aren’t Cost-Conscious Consumers of Health Care

When I was the head of retirement research at Hewitt Associates in the early 2000s, the concept of consumer-driven health care was just beginning to gain traction. My initial take was: We’ve come to realize in the retirement space that it’s asking too much of people to make sophisticated savings and investment decisions. That’s why we’ve gone in the opposite direction by implementing auto features in 401(k) plans (automatic enrollment, target-date funds, etc.). How are health care decisions easier?

My view hasn’t changed: When people need health care, they think like patients, not consumers. And I recently experienced that myself when I broke my leg in Iceland. Sitting at the admissions desk in the emergency room, I was told that my insurance wouldn’t be accepted. I could hand over my credit card or leave. My leg was broken in three places, I was 5 ½ hours from Reykjavik, and I was in excruciating pain. I didn’t even ask how much it would cost. I gave them the credit card. Later, I was asked if I wanted surgery to repair my leg or to be released to somehow make my way home to get surgery in the United States. Again, all I could think about is how much worse my injury would be if I tried to move (my broken bone was a fraction of an inch from piercing my skin). I didn’t ask how much surgery would cost. I told them to go ahead.

In his research in pricing differential by site of treatment, Paul Fronstin, EBRI’s Director of the Health Research and Education Program, fortunately shows that not every health care cost management solution must rely on the patient/consumer. In his Location, Location, Location series, Paul employs the IBM® Marketscan® Commercial Claims and Encounters Database to examine how site of treatment impacts price for health care services. Specifically, he finds that when it comes to cost differences between obtaining certain treatments as hospital outpatient departments vs. obtaining the exact same treatment at physician offices, hospitals charge:

• 81 percent more for oncology medications than physician offices, controlling for drug mix and treatment intensity.[1]
• A median of 91 percent more for certain lab, imaging, and selected specialty medications than physician offices.[2]
• An average of 200 percent more per unit price for physician-administered outpatient drugs.[3]

In his newest Fast Fact, Paul offers three possible ways that employers can help overcome these price differentials:

• Engage patients through increased price transparency.
• Remove hospital outpatient departments from their network.
• Exert pressure on hospitals to shift their pricing. 

Regarding the first option, Paul notes that even recent public policy efforts to address pricing transparency have fallen short: Since the Hospital Price Transparency Final Rule went into effect this year, a third of hospitals have still not posted usable pricing data and another 12 percent posted data that fell well short of the requirements.

Another drawback is the challenge that patients/consumers may face in making decisions based on pricing. Again, this is well-trodden ground in the retirement space. In 2009, Beschears, Choi, Laibson, and Madrian explored whether the SEC’s Summary Prospectus simplifying mutual fund disclosure helped investors avoid costly sales loads. The researchers found that even with a one-month investment horizon, subjects did not avoid loads because they were confused, overlooked them, or believed their chosen portfolio was superior to a load-minimizing alternative.

An example of this latter type of misperception — let’s call it premium price bias, or the conviction that you get what you pay for — in the site of treatment space is that a cancer patient might mistakenly assume that it is worth paying more for treatment at a hospital facility. For example, they might believe that the hospital facility may have better access to emergency treatment in the event of an adverse reaction. They likely wouldn’t know that, in reality, it probably makes no difference; many hospital facilities are physician offices that were acquired by hospitals.

Paul notes that the second two solutions aren’t perfect, either. Regarding exerting pressure on hospitals, increasing consolidation of health care providers makes it difficult. As for removing the hospitals from their network, this may not work well in areas with limited provider choices or in areas where powerful hospital systems limit payers’ ability to exclude certain high-cost provider locations from their network.

Still, neither of these solutions rely on the patient to be cost-conscious when it comes to health care. And in my experience, that’s a good thing.

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[1] https://www.ebri.org/health/publications/fast-facts/content/how-site-of-treatment-markups-for-infused-oncology-medications-drive-cost-differences-over-time

[2] https://www.ebri.org/health/content/cost-differences-for-oncology-medicines-based-on-site-of-treatment

[3] https://www.ebri.org/publications/research-publications/issue-briefs/content/location-location-location-spending-differences-for-physician-administered-outpatient-medications-by-site-of-treatment

The Common Denominator: Understanding the Importance of Commonality When It Comes to Retirement Advice

In my recent testimony on “Gaps in Retirement Savings Based on Race, Ethnicity and Gender” for the U.S. Department of Labor Advisory Council on Employee Welfare and Pension Benefit Plans, one of the key discussion points was the importance of “commonality.” Specifically, “2021 Retirement Confidence Survey (RCS): A Closer Look at Black and Hispanic Americans” found that — when looking for an advisor — Black and Hispanic Americans were asked if “working with an advisor who has had a similar upbringing or life experience as you” was an important criterion: 61 percent of Black respondents and 57 percent of Hispanic respondents, vs. 41 percent for White respondents, said this criterion was important.

However, one cohort that expressed less interest in having an advisor with a similar upbringing or life experience was female workers, with 45 percent saying this was important. Also of less importance to female workers was whether the advisor was the same gender as them: Only 27 percent said this was important, compared with 39 percent of males.[1]

This may bear some further investigation. In “2020 Retirement Confidence Survey: Attitudes Toward Retirement by Women of Different Marital Statuses,” we examined responses of women by marital status and found that while married women workers listed a professional financial advisor as one of the top three sources of information they use for retirement planning, financial advisors were not among the top three listed for divorced or never-married women — who instead used family and friends, Google, or none of the above.

Part of this finding may owe to the fact that divorced and never-married women have substantially less assets than their married female counterparts: 38 percent of divorced and 42 of never-married women workers had less than $1,000 saved, compared with 14 percent of married women workers. The divorced women workers were markedly more likely to have smaller levels of assets, as 72 percent had less than $25,000 in assets vs. 54 percent for never-married women workers and 31 percent for married women workers. Not surprisingly, given their low levels of assets, divorced women workers expressed far more interest in access to emergency savings accounts or programs to help with near-term needs than long-term savings help. 

The 2022 Retirement Confidence Survey will continue to explore differences in savings and retirement by gender. We will also oversample LGBTQ+ workers and retirees to further understand how various cohorts are approaching saving for and living in retirement. Please consider partnering with EBRI on this important work and sponsoring the 2021 Retirement Confidence Survey: Focus on Gender, Marital Status, and the LGBTQ Community.  Contact jaffe@ebri.org.

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[1] From the 2021 RCS Funders Report, which is available only to sponsors of the RCS.

After the Pandemic: Getting Exhausted and Stressed Workers Back on Track

The Employee Benefit Research Institute (EBRI) recently asked its members to create a word cloud answering the question, “When you think of the impact the past 1+ years has had on you, what word comes to mind?” 

Of course, with word clouds, the more people that respond with a given word, the bigger that word becomes.  One word truly stood out in responses from members: exhausted.

These senior-level executives of health benefits, retirement, and financial services providers, associations, and plan sponsors described being over-worked, burned out, drained, anxious, stressed, and feeling adrift — among other things. Some did note positives, such as spending more time with family, learning to be a better leader, and getting in touch with what really matters. However, far more noted being stuck, feeling like they were in the movie Groundhog Day, and experiencing a lack of belonging and disconnection.

The experience of EBRI members corresponds to findings by author Jennifer Moss, who surveyed more than 1,500 people from 46 countries in various sectors, roles, and seniority levels. She found that in response to COVID-19, respondents overwhelmingly reported that their work life was getting worse, that their well-being had declined, and that they were struggling to manage their workloads and had experienced burnout “often” or “extremely often” in the previous three months.

One antidote to workplace burnout, of course, is engagement. But how do employers re-engage a work force that has been isolated, financially stressed, and emotionally drained? And what benefits are available and effective to facilitate this? These are questions the EBRI will explore in the remainder of 2021 and beyond.

Physical, Emotional, and Financial Health

For example, EBRI is currently working with Greenwald Research and a dozen sponsors to design the 2021 Workplace Wellness Survey (WWS).[1] The survey will garner worker perceptions on how well employers are helping them navigate the challenges they are facing when it comes to physical, emotional, and financial health considerations. For example, the WWS will delve into how telework has impacted workers’ financial well-being, mental health, and physical well-being and health. It will also explore how workers value caregiving and paid time-off benefits. Also, this year for the first time, the survey will explore differences among diverse populations when it comes to workplace wellbeing — including Hispanic and Black Americans’ experiences in these areas.

In a separate employer survey through EBRI’s Financial Wellbeing Research Center,[2] EBRI will query employers about how they are changing their focus when it comes to financial wellness benefits in light of the current environment. Areas of exploration will include: Are emergency savings vehicles becoming more central to financial wellness benefits, and if so, what do they look like? Are employers increasing their efforts to financially support caregivers? How are furloughed or laid-off workers being accommodated as they re-enter the workplace?

Mental Health and Stress

Through EBRI’s health benefits research, we’ll explore how COVID-19 may have contributed to the demand for mental health services, including spending on mental health as well as use and spending among those with mental health conditions.

The 2021 Consumer Engagement in Health Care Survey[3] will specifically focus on employee stress: the amount of stress workers are experiencing, the causes of stress, and the use of behavioral health and mental health services to combat this stress.

The Impact of Policymaking

Clearly, policymakers can also play a role in getting exhausted and stressed workers back on track. Last month, I testified at a Senate HELP Committee hearing that, among other things, sought to understand the role of the employer and emergency savings. Responses to the Workplace Wellness Survey have shown that workers not only want but expect their employers’ support when it comes to physical, mental, and financial wellness.[4] But EBRI analysis also shows the limitations of relying on existing workplace savings vehicles to support such needs as emergency savings.[5] Instead, the testimony contemplated the impact of alternatives, such as dedicated workplace emergency savings accounts. As policymaking evolves in these areas, EBRI will continue to seek to provide needed education on these topics.

Join Us in Being Part of the Solution

EBRI is always looking for partners to work with us as we explore research topics. If you or your organization are interested in the topic of workplace stress and mental health, let us know. The more thought leadership we have around these issues, the better we will be able to successfully navigate our way out the other end of this pandemic.

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[1] https://www.ebri.org/health/Workplace-Wellness-Survey

[2] https://www.ebri.org/financial-wellbeing/financial-wellbeing-research-center

[3] https://www.ebri.org/health/ebri-greenwald-consumer-engagement-healthcare-survey

[4] https://www.ebri.org/health/Workplace-Wellness-Survey

[5] https://www.ebri.org/publications/research-publications/issue-briefs/content/cares-act-implications-for-retirement-security-of-american-workers