Tackling Complexity in Retirement Benefits: Challenges and Directions for the NCS

By Dworak-Fisher, Keenan; Wiatrowski, William J. | Monthly Labor Review, July 2011 | Go to article overview

Tackling Complexity in Retirement Benefits: Challenges and Directions for the NCS


Dworak-Fisher, Keenan, Wiatrowski, William J., Monthly Labor Review


As the retirement benefits landscape has become more complex, it has become more challenging/or the National Compensation Survey to capture it comprehensively; the data presented in this article indicate that the current NCS statistics are still very useful but identify some areas in which improvements could be made

Retirement benefits have long been a prominent component of compensation in America. In 1986, they composed 3.8 percent of all compensation paid to private industry workers, (1) and this percentage has remained relatively stable through the decades: in December 2009, contributions to retirement were 3.4 percent. (2) Yet, beneath this relative stability in compensation share, the retirement benefits landscape has undergone many changes, bringing increased diversity and complexity to the underlying offerings. The BLS National Compensation Survey (NCS) has tried to keep up with this evolution by making appropriate changes as time has gone along, and for the most part it has been successful. But this process entails tradeoffs between continuity and responsiveness, so challenges to accurate reporting will always remain.

This article briefly reviews the evolution of the retirement benefits landscape and the adjustments made by the succession of BLS benefits surveys. It then discusses some of the ongoing challenges faced by the NCS in dealing with new complexity in retirement benefits. One challenge is the increasing number of defined benefit plans that have been "frozen," which raises concerns about measures of benefit access; another challenge is the expanding role of retirement-savings vehicles having no employer contribution, which are becoming a fundamental component of the retirement benefits landscape. After detailing these particular challenges, the article discusses a larger implication of the growing complexity of retirement plans: the increasing difficulty of using statistics that are based on retirement plans (as opposed to people) to understand the experiences of individual workers. We envision an expansion in the outputs of the NCS to include measures tracking the prevalence of various plan features across different types of plans, and we work through an example using microdata from the current survey.

The evolution of retirement benefits

As described in detail by Patrick W. Seburn, pensions in the United States have a long history that dates back to the plans offered by several railroads, banks, and utility companies in the late 1800s and early 1900s. (3) By the 1970s, retirement plans had risen in prevalence to cover about 50 percent of the workforce, (4) and most conformed to the same structure--that of the defined benefit plan. In 1974, Congress passed the Employee Retirement Income Security Act (ERISA) to safeguard the accrued benefits of workers. By adding section 401(k) to the Internal Revenue Code, ERISA also established an additional vehicle for tax-deferred retirement savings through the employer, and soon the number of defined contribution plans began to grow precipitously.

When defined contribution plans first emerged, they were usually offered as supplements to defined benefit plans, which still dominated the landscape. However, this trend soon changed course, and more and more employers offered defined contribution plans as the primary retirement-savings vehicle for their employees. (5) At the same time, many of the extant defined benefit plans were terminated, causing the total number of defined benefit plans to fall. (6) By the mid-1990s, defined contribution plans were the predominant form of retirement-savings vehicle used by private industry workers. (7)

There have also been changes in the nature of retirement benefits within the defined benefit and defined contribution categories. In the 2000s, there was a sharp increase in the number of defined benefit plans that were "frozen"; when plans are frozen, new employees are barred from enrolling, and in some cases employers' contributions end altogether. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Tackling Complexity in Retirement Benefits: Challenges and Directions for the NCS
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.