Nevin's Data "Points"

“Presumably, if workers earned income in a retirement account, it is safe to assume that they had a retirement account…”. Ya think? That somewhat self-evident statement is drawn from a recent Issue Brief  by the non-partisan Employee Benefit Institute (EBRI). That it was necessary is a cautionary tale about the blind reliance on data, even from a credible source, that looks suspicious. It relates to the Current Population Survey (CPS), Annual Social and Economic Supplement (fielded in March of each year) to the CPS, conducted by the U.S. Census Bureau – a report that had long been one of the most cited sources [i]  of income data for those whose ages are associated with being retired. ‘Bold’ Move The problem appears to have its roots in a well-intentioned attempt to provide a more accurate read on income from DC plans. Responding to research that indicated that the CPS misclassified and generally underreported income, particularly pension income, th...

As human beings, we’re drawn to perspectives, including surveys and studies that validate our sense of the world. This “ confirmation bias ,” as it’s called, is the tendency to search for, interpret, favor, and recall information in a way that confirms our preexisting beliefs or hypotheses. It also tends to make us discount findings that run afoul of our existing beliefs. In its simplest terms then, when you see a headline that confirms your sense of the world, you’ll be naturally inclined to embrace and remember it as a validation of what you already perceive reality to be. Even if the grounds supporting that premise are shaky, sketchy, or (shudder) downright scurrilous. Here are some things to look for – likely in the fine print – as you evaluate those findings. There can be a difference between what people say they will (or might) do and what they actually will. No matter how well targeted they are, surveys (and studies that incorporate the outcome of surveys) must rely on w...

Have you heard this one? “Only about half of working Americans are covered by a workplace retirement plan.” Sure you have. It’s a statistic that is widely cited and reported, both in the mainstream press and on Capitol Hill. It comes from a reliable, objective source (the U.S. Census Bureau’s Current Population Survey) and conjures up a compelling need for action by advisors (and others) hoping and working to expand the availability of workplace retirement plans. In reviewing the Census Bureau data, the Employee Benefit Research Institute (EBRI) recently noted that , in 2011, 78.5 million workers worked for an employer or union that did not sponsor a retirement plan. That is the “less than half” number cited, and reported, with such vigor. However, when you look at the data underlying that aggregate number, you find it includes: 8.9 million people who were self-employed (and thus arguably are prevented from being covered by their own inaction); 6.2 million who were under the...

People are often grouped into one of two camps: the optimists, who generally see the glass as half-full, and the pessimists, and who are said to view the glass as half-empty. One of the most commonly cited data points about retirement is that “only about half of working Americans are covered by a workplace retirement plan.” Drawn from the U.S. Census Bureau’s Current Population Survey (CPS), it’s cited by both those who see the current system as inadequate (or worse), as well as its most ardent champions—in other words, both by those who see the glass as half-full, and those who are inclined to see it as half-empty. This is a data point that we’ve written about before , and one that was acknowledged in a recent EBRI Issue Brief [1] that explored various demographic and economic factors that affect retirement plan participation. The data point is relatively simple math: the number of workers who say they participated in a workplace retirement plan divided by the total number of w...

Sooner or later, at just about every retirement plan conference, you’ll hear someone—and generally more than just one someone—cite the statistic that “only about half of working Americans are covered by a workplace retirement plan.” It’s a data point that is widely and openly presented as fact—not only by those inclined to dismiss the current system as inadequate (or worse), but even by some of its most ardent champions, who see it as a call to action for expanded access to these programs. It’s drawn from the U.S. Census Bureau’s March 2012 Current Population Survey (CPS).(1) But does it tell the full story? A recent EBRI Issue Brief notes that in 2011, 78.5 million workers worked for an employer/union that did not sponsor a retirement plan. Looking specifically at those who did not work for an employer that sponsored a plan, the report notes that: 8.9 million were self-employed (and were thus barred from having a plan by their own inaction). 6.2 million were under the age of 2...