March 23, 2025 • 34 mins
American Retirement Association Brian Graff routinely argues that no one grows up wanting to be a D.C. Pension Geek—it just sorta happens.
But Barb Marder actually DID want to be a D.C. Pension Geek at a relatively young age.
The president and CEO of the Employee Benefit Research Institute (EBRI) joins Graff for a fascinating discussion about EBRI's mission, its role in the Washington policy debate, and why the current retirement system is constantly attacked.
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Episode Transcript
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Speaker 1 (00:00):
Employees really weren't, unlike me, who stayed
with Mercer for 40 years.
People really weren't stayingwith one employer for their full
career and if you don't, youreally don't get the full
benefits of a defined benefitplan.
Speaker 2 (00:12):
DC Pension Geeks brings you exclusive
conversations with topretirement policymakers and
regulators in and aroundWashington DC, hosted by Brian
Graff, an attorney, accountant,former Capitol Hill staffer and
CEO of the American RetirementAssociation.
If you're looking for aninsider's view of all the twists
and turns that Washington takeson the road to ensuring a
(00:33):
secure retirement for millionsof Americans, you're in the
right place.
Welcome to DC Pension Geeks.
Speaker 3 (00:39):
All right, everybody.
Welcome back to another episodeof DC Pension Geeks.
I'm Brian Graff, ceo of theAmerican Retirement Association
and with me today, veryfortunate to have our guest
Barbara Marder.
And Barbara is the CEO of theEmployee Benefits Research
(01:02):
Institute.
Or is it president Barb?
Speaker 1 (01:05):
President and CEO.
Speaker 3 (01:06):
President and CEO.
You got both titles.
Good for you.
Apparently, yeah, I only getone CEO.
Woe is me, anyway.
So, as I indicated, she'spresident and CEO, or she
indicated president and CEO ofthe Employee Benefits Research
Institute, which is asignificant player in the policy
(01:27):
world here in Washington DCwith respect to employee
benefits, and a particular noteto us is obviously their role in
retirement policymaking, andwe're going to get into that.
But, as tradition has it, we'regoing to start with a little
(01:48):
bit more about you personally,and what we'd like to ask is you
know, how did you end up beinga pension geek and get into the
retirement world?
Because, like me, no oneactually thought about doing
this when they were inelementary school.
Speaker 1 (02:08):
Well, you're right, brian, I did not think about it
in elementary school, but I willsay that I ended up being a
pension geek before I leftcollege.
Speaker 3 (02:18):
Ooh intriguing.
Speaker 1 (02:21):
Yes, In my senior year of college I was a math and
economics double major and myadvisor said you should look
into being an actuary and I hadnever heard of that.
So they arranged for me to havean internship with a pension
actuarial consulting firm and Idid that part-time.
(02:44):
My senior year took my firstactuarial exam and they hired me
out of college.
So there I was, all of probably21, a pension actuary or a
budding pension actuary, and Istayed with that firm just for
(03:10):
about another six months andthen in 1983, I joined Meidinger
at the time, and then Meidingerwent through a whole series of
mergers, ended up being mergedwith Mercer, and I spent 40
years of my career at Mercer.
Speaker 3 (03:23):
So so you knew you wanted to be a pension actuary
when you were starting the SOAexams.
Is that what I heard?
Speaker 1 (03:30):
Yeah, I did.
I mean I did Again.
Until my senior year of collegeI had never heard of being an
actuary or the actuarialprofession but then really
investigated the profession andI even interviewed like for the
job.
I even interviewed a socialsecurity.
I interviewed with someinsurance companies and actually
(03:50):
the sort of the people Iinterviewed suggested you'd be
great in consulting, you shoulddefinitely head into the
consulting field and I continuedwith the exams and the rest was
history.
So a pension geek at a veryearly age.
Speaker 3 (04:09):
Fantastic.
So did you?
I mean, did you focus obviouslyfocus primarily on larger
defined benefit plans?
I assume yes, both singleemployer and multi-employer.
Speaker 1 (04:24):
Yes, Both single employer and multi-employer
Mostly single employer, Mostlysingle employer.
A few public plans versusprivate, but mostly large
private defined benefit plans.
And then I'm going to say aboutmaybe 10 years in, I was
exposed to the definedcontribution side as well and
(04:45):
did a fair bit of consulting onthat side.
And at one point at Mercer Iwas the global defined
contribution consulting leader.
So I actually organized peoplearound the globe at Mercer who
were leading that country'sdefined contribution consulting
(05:07):
work and it was prettyfascinating because it, you know
, the idea really was what canwe pick up from one country that
could help inform the other?
So that was really, it wasreally a meeting of kind of
thought leaders to try to helppredict what might be coming and
to actually bring bestpractices and maybe worst
(05:28):
practices, making sure we knewabout them and we could bring
them to the different countries.
Speaker 3 (05:33):
So you kind of saw, you know, in your practice.
You were firsthand witnessingthe kind of transition away from
larger defined benefit plans todefined contribution plans and
sort of consulting with largeemployers on, on and on how to
do that.
Obviously, some of thecontroversial, you know, going
(05:55):
back into the nineties, or theconversions to cash balance
plans among and then and thenthe controversies around you
know the of, essentially, youknow terminating plans and
having them bought out byinsurance companies to de-risk
(06:21):
the employer's liability.
On the DC side, you know, oneof the things that we hear from
in Washington is this sort ofwoe around this transition that
has occurred over the lastseveral decades and that wistful
(06:43):
thinking about the good olddays when everyone had a defined
benefit plan, although Isometimes question how really
good that was, because you knowonly certain people at certain
employers did have those things,but when they did they were
great.
I mean, do you have anythoughts yourself as to?
(07:07):
You know why that happened andis it realistic?
As you know, someone likeBernie Sanders would like to see
to go back to those days ofprimarily defined benefit plans.
Speaker 1 (07:24):
Yeah, I do have fond memories of defined benefit
plans and, you know, was evenfortunate to be working with
organizations when, you know,the interest rate environment
was very favorable and many ofthese plans had surpluses and
you know our big job wasfiguring out how to spend those
(07:46):
surplus assets to benefitparticipants Right.
So you know there were reallythe some of the good old days of
defined benefits.
Speaker 3 (07:55):
Particularly in the 90s, there were the proposals
that were also controversial, toallow employers to take money
out of the plan.
Speaker 1 (08:04):
Yes, yes, so there were right.
There were kind of goodintentions and perhaps not as
good intentions about the use ofthose surplus assets, for sure,
but that's.
The issue is that you know whatwas once a very favorable
interest rate in economicenvironment, then it wasn't.
(08:24):
And you know corporations can't.
It's very difficult for them todeal with that kind of
volatility, and you know balancesheet volatility and the
accounting rules, and so it's.
I think it's understandablethat companies were skittish
(08:44):
about the plans.
And then I do think, combinedwith the changes in the
workforce and the fact thatemployees really weren't unlike
me who stayed with Mercer for 40years, people really weren't
staying with one employer fortheir full career.
And if you don't, you reallydon't get the full benefits of a
defined benefit plan.
(09:04):
And then you know again, backin the day, vesting schedules
were much longer.
People had to be with anemployer a fairly long period of
time to even get anything.
So, they weren't.
You know, they weren'teverything to everyone.
They were definitely great forsome and I know retirees who
have defined benefit plans.
(09:24):
They're typically very, veryhappy, very comfortable,
satisfied in retirement.
That's great.
But there were just too manyother economic and kind of
corporate factors that went intothat equation that made it
really not a sustainable model.
Speaker 3 (09:50):
And I've looked into this, spoken about this before.
I agree with you.
I actually I specifically pointto the change in the accounting
rules by the FinancialAccounting Standards Board that
were really the death knell forcorporate-defined method plans.
Because of that balance sheetvolatility, that became
(10:11):
unacceptable and if theleadership of publicly held
corporations' job is primarilyto enhance shareholder value, it
was very much contrary to that.
Speaker 1 (10:24):
Yeah, and then once you know, sort of once one large
company made the decision, youknow, then you're also looking
at competitive advantage ordisadvantage.
So if they do not have thatkind of balance, reliability and
I keep mine, you know wheredoes that leave me from a
competitive standpoint?
So it started to kind of getthat's where I feel like a lot
(10:48):
of the momentum came from Agreed.
Speaker 3 (10:51):
So let's go back to EBRI, so tell the audience you
know what is EBRI, what is it,what's its mission, what's its
focus and you know what its roleis in policymaking today.
Speaker 1 (11:06):
Absolutely.
And again, thanks for theopportunity to talk to your
audience about EBRI and what wedo.
So we are a member-fundednonprofit research institute and
our mission is to provideobjective, independent,
nonpartisan research to informand educate policymakers, as
(11:32):
well as inform the rest of theindustry in terms of product
development and marketinnovation.
We're not a trade association.
Ebrd does not advocate or lobby, but we are very comfortable
with our you know just the factsthe best data and information
(11:55):
being used by those who doadvocate to be sure that those
who are talking to policymakershave the best possible
information in their hands.
And then EBRI does directlyeducate policymakers, whether
that's through the research thatwe publish.
We have policymakers all thetime coming to our website
(12:17):
looking at our research, usingour research.
It's quoted often by many, manydifferent government
organizations.
And then we also do directlyhave educational sessions with
staffers and people on the Hill,again with the idea to let's
(12:37):
just make sure that, as thesepolicymakers are making
decisions, as they're hearingfrom the lobbyists and the
advocates, that they also havethe information to be able to
challenge the information, to beable to challenge, ask the
right questions and make thebest decisions.
And I think it is a unique rolethat EBRE plays, because we are
(13:04):
unique in that we're providingthis information, but we don't
take positions one way or theother.
Speaker 3 (13:07):
So, and you're right, I do think it is an important
and unique role and we're, as anorganization the ARA is very
happy to be involved with, as amember of, and we're very happy
to have you as a memberprominent things from a subject
(13:31):
matter, substance standpoint,that you guys produced the
Retirement Confidence Survey, aswell as the simulation model
that sort of projects out howAmerican workers will do under
various proposals.
Can you talk a little bit aboutboth those?
Speaker 1 (13:48):
Absolutely.
The Retirement ConfidenceSurvey, I think, is one of the
most robust pieces of research.
It's a survey of both workersand retirees.
We've been doing it for 30years.
We're able to not just look atcurrent sentiment and confidence
(14:09):
in retirement but actually lookat changes in that over a year,
so it's really interesting.
But it really covers such awide range of topics from how
confident are you that you'll beable to live a secure and
financially secure retirement?
But we asked questions aboutguaranteed income and I thought
(14:32):
one of the just really afascinating finding from the
2023 survey is we asked workersyou know how many of you what
percentage would be interestedin having purchasing some kind
of a guaranteed income productat retirement.
And it's around 80%, which Ithink is substantial.
(14:59):
When we looked at that by age,the youngest people, those in
the 25 to 29 age group 93% saidthey would be interested.
So it's very interesting to methat this youngest generation is
probably looking out.
They're seeing what's happening, maybe even looking at family
members or you know what's goingon and saying, wow, you know, I
(15:21):
should try to find a way tomake sure I have some kind of
guaranteed income in retirement,probably not thinking that
Social Security will be onesource of that.
They may not think of those twotogether.
We do ask questions aboutSocial Security and confidence
that Social Security will bethere, et cetera.
But people are pretty confidentthat it will be.
(15:42):
But you know, it's veryinteresting.
So that's retirement confidencehas lots of different facets to
it and the retirement securityprojection model is very
interesting.
It's a stochastic model and itallows us to look at the impact
of different policy changes onthe overall savings US savings
(16:03):
gap.
So we can really get veryspecific about whether a
particular policy will increasethe shortfall.
The saving shortfall willreduce the saving shortfall by
how much, and then we can lookat it by all kinds of different
demographic cuts and ages andincome.
So it's a very powerful tool tolook at the impact of different
(16:26):
changes.
Speaker 3 (16:28):
So, talking a little bit more about the retirement
confidence survey, there's ahuge gap in perception about the
?
U the sky is falling.
And then there's others whofeel economists that feel that
(16:59):
you know everything's completelymisconstrued by those
economists.
And quite the contrary.
The IRS data, for example,shows that seniors are actually
doing quite well, in factarguably better, than their
younger working counterparts tosome degree.
So do you see that distinctionin the RCS between people
(17:24):
actually kind of who are nervousas they encroach retirement and
then when they get there, ohwell, this is not so bad.
Speaker 1 (17:33):
Yeah, actually, the confidence and satisfaction
levels in retirement are pretty,I mean, they're pretty
optimistic.
It's not like a third of peopleare confident they'll have
enough money in retirement orthat they're retiring and will
have enough to last the rest oftheir retirement.
The numbers are in the 60, 70%that they're confident they will
(17:58):
have money to live throughouttheir retirement, which, again,
that's pretty optimistic.
So so agree with you that youknow you do see surveys all
across the board and you know,clearly, looking at current
retirees versus people who won'tbe retiring for another 30
years, I mean you'll definitelysee differences.
(18:19):
But I would say, all in all,our surveys are relatively
optimistic about having enoughfor a secure retirement.
Speaker 3 (18:29):
So you mentioned Social Security, so you
mentioned Social Security.
Sometimes, when I'm attendingsessions or talking to policy
(18:51):
folks, particularly economists,about the retirement system,
it's almost as if SocialSecurity doesn't exist, and one
of the things that is afrustration for me is that lack
of recognition that we actuallydo have a mandatory retirement
system and it's a definedbenefit plan, by the way and the
(19:12):
critical role that it plays inconjunction, the foundational
role that it plays inconjunction with the private
system, and I think you guys areworking on trying to link those
two together in a more holisticway to demonstrate that value
proposition.
Speaker 1 (19:31):
Yeah, you're right, I mean we think about the
three-legged stool or whateverwe want to call that value
proposition.
Yeah, you're right, I mean wethink about the three-legged
stool or whatever we want tocall that now.
But clearly the US system is aprivate-public partnership and,
as you say, social Security is avery important piece of the
(19:52):
equation for many, many workers.
And we did.
In fact, craig previewed someresearch at our December Policy
Forum.
In fact, will Hansen was on thepanel where we discussed it.
And you know the replacement.
We were looking at replacementratios.
So we were looking to see ifyou combine for a full career,
(20:16):
if you combine Social Securitywith the income that you would
expect to get from a definedcontribution plan.
Obviously we have manyassumptions underlying that.
The replacement ofpre-retirement income when you
bring the two together wasstrong.
(20:38):
Again, now I'm talking about afull career.
You know a 30-year careerworker, but you know that
doesn't have to be with oneemployer.
Speaker 3 (20:49):
You know which is sort of used to be in the
defined benefit.
I mean, I think your modelassumes that there might be some
gaps in contributions in theprivate sector, which is pretty
typical, but in general, youknow, throughout that 30 years
you're obviously in the socialsecurity system but you're also,
for at least a sizable portionof that 30 years, contributing
(21:10):
to a defined contribution plan.
Speaker 1 (21:12):
Exactly least a sizable portion of that 30 years
contributing to a definedcontribution plan?
Exactly, yeah, but the result Imean, and especially for middle
income you know, I know thereis some talk about that the
current private definedcontribution system really only
benefits the most highly paid,but our numbers definitely show
the impact on the middle classof you know, the current, the
(21:35):
current private definedcontribution system plus Social
Security.
Speaker 3 (21:39):
Right, you know some people say that Social Security
for the does a pretty good jobfor lower income individuals in
retirement.
But you know it's the middleclass that would really be
suffering in the absence of adefined contribution system,
absolutely so recently there'sbeen this Washington DC love
(22:03):
affair among some of the policywonks with our good friends down
under in Australia, and theycall it the superannuation
system, which is their versionof a mandatory retirement system
, which one of the things thatdrives me crazy about these
(22:26):
comparisons is that people tendto compare the Australian system
with the 401k system, and it'sreally apples and oranges,
because the Australian system isa mandatory retirement system.
The 401k system is asupplementary retirement system,
private, on top of ourmandatory retirement system, and
(22:48):
I've tried to stress to some ofthese academics, to no avail,
that the real comparison shouldbe between the Social Security
system in our country andAustralia's mandatory retirement
system, which is, you know, aDC system versus a DB system.
Right, and why do we have thatgap of understanding about how
(23:22):
the US system really is a dualsystem, when everyone seems to
be making these comparisons?
Speaker 1 (23:38):
either, without really contemplating the fact
that we do have this dual model.
Yeah, I think you know.
I think it's complicatedbecause when you look at either
system, as you were saying,there's different components to
it.
There's, you know, the SocialSecurity, the safety net
component that actually bothcountries' retirement systems
have.
Speaker 3 (23:57):
Although the Australian fallback, they have a
quote old age pension default.
For someone who you know who isbut the A, it's very minimal.
Speaker 1 (24:10):
It's quite low.
Speaker 3 (24:11):
Yeah, it's very small and it's only for a very
limited number of people, basedon their incomes, whereas Social
Security, you know, providesbenefits yeah, particularly
again for middle income folkswho would be not anywhere close
to a reasonable incomepercentage of replacement income
(24:32):
in the absence of SocialSecurity.
So, yes, there is that, youknow, minimal component of if
things go awry but it is a DCmodel that we're depending on
the economy assets could go down.
Speaker 1 (24:48):
Right, exactly, exactly.
I mean, I think, those enamoredof the Australia system and you
know I did.
Actually, mercer puts out aglobal pension index every year.
Speaker 3 (24:58):
I always think it's interesting to see where you
know, yeah, I'm aware, and I getfrustrated with it.
Speaker 1 (25:05):
You know clearly Australia is way ahead of the US
.
But interestingly, when youlook at the subindexes as it
goes to adequacy the sort of theadequacy I'm just looking so
Australia's adequacy subindexwas like 68.4 and the US was
63.9.
(25:26):
It's not that radicallydifferent.
There are other parts of theindex that really drive the
comparisons, not as much onadequacy, but I think it really
gets to that the fact that it'smandatory, which means there's
broader coverage.
We have a mandatory system too,right, right, but people don't
like.
Again, it's complicated becausepeople are comparing apples and
(25:50):
oranges.
But you know again, with amandatory system you get, you
know, broad coverage of workersand different kinds of workers
self-employed, evenself-employed, you know,
part-time.
Speaker 3 (26:00):
So I think that's it's like Social Security does.
Speaker 1 (26:03):
Right, but that's where I think people get really
enamored with the system as, aswell as other mandatory systems
that are that look like ourdefined contribution system, you
know, but are, but aremandatory.
Speaker 3 (26:20):
So I feel like that's where so the way, so the way I
view it is if we have amandatory defined benefit system
and yes, it needs to get funded, but I'm I'm completely
operating under the assumptionthat that will get figured out,
it'll be fixed.
Yeah, it's going to getaddressed.
Fixed may be too strong a wordbut it's going to get addressed
because politically there's nochoice and it's going to be
(26:43):
maintained as a defined benefitsystem.
It's not going to be privatizedas the political word that's
been used about the socialsecurity system before.
So we're going to have a DBsystem and then we're going to
have a DC system.
And I think the question iswould it be a good idea for the
(27:06):
government to be running both?
And my view, I think our viewas an organization, is that's
not a good idea.
We like the idea of thegovernment running the DB
component, but we don't want thegovernment centralizing and
running the DC component.
That would be a concern from adiversification standpoint.
(27:29):
I think people would love,people like the idea of having
that dual model because of thatdiversification.
Speaker 1 (27:37):
Yeah, I mean the private-public partnership has
served us really well with theretirement system and it feels
like a very radical shift andmaybe unnecessary to go in that
direction.
Again, you know EBRE doesn'ttake positions, but we certainly
support the employer provided,the employer provided system.
(28:01):
We are the Employee BenefitResearch Institute after all, so
the I mean.
The other thing that I think isinteresting is there there's
more to come in terms oflegislation that's already been
passed, that hasn't been, youknow, that hasn't gone into
place yet.
That will continue to addresssome of the gaps, whether it's,
(28:25):
you know, coverage gaps or it's,you know, things like auto
enrollment to increase savingsrate, especially among lower
income, the savers match.
There's lots of things that havealready been passed that will
go into place over the next fewyears that will continue to fix
(28:45):
some of the challenges to thecurrent public-private system,
public-private system.
I'd love to see how thosethings shake out, how they work.
I don't think we're necessarilydone.
I think there's plenty of othertweaks.
I'm not saying there will be asecure 3.0 or whatever, but
there are plenty more thingsthat I think are being
considered.
I know, you know, I've heardlots of different things.
Speaker 3 (29:08):
I'd love to see the impact of those before we, you
know, go to some radical changeat this point and there are
proposals, I certainly agreewith you, and, by the way, there
will be a Secure 3.0, it's justa question of when and, along
those lines, you know there areideas being talked about to try
(29:28):
to, as you said, not only do wewant to see what happens with
the implementation of things inSecure 2.0, but there are
further ideas being consideredto try to close the private
coverage gap amongst thoseemployees that don't have access
(29:50):
to a workplace retirement plan.
And, frankly, something youmentioned, the gig work, the,
you know, the gig economy.
There's a, there's a growingnumber of workers in this
country and that probably thatshift is probably not going to
reverse anytime.
Yeah, who are not, you know,who are self-employed in some
(30:10):
capacity, and we want to try tomake it easier for them to save
on a, on a on top of socialsecurity too.
Speaker 1 (30:18):
Absolutely.
Yeah, I think.
I think there are so manythings that are being kicked
around that you know.
Again, I'd love to see whatwill happen over the next few
years, as both things alreadyenact, you know, things already
legislated and others come intoplay.
So I think it'll be interestingand in the meantime, I'm sure
(30:40):
we'll continue to hear thedebate about you know where we
should scrap everything and godo this and do that, but you
know those kind of very radicalchanges.
I'm not sure the industry isready for that, but you know.
Speaker 3 (31:00):
You know, I'm not just, not only the industry, but
I'm not sure the, you know, I'mnot sure the American people
are ready for that either.
I mean, I think the idea ofhaving, you know, the government
controlling all of myretirement savings is something
that, at least among certainquarters of our country,
there'll be a lot of resistanceto that.
So I think building on thesuccess of the current system,
(31:26):
which isn't perfect by any means, is a lot more pragmatic and
likely to occur than, you know,throwing the whole thing out,
which is something I've tried tostress to my academic friends,
who are more inclined to throweverything out, like, listen,
let's work together on things tomake the current thing better,
as opposed to fighting eachother over.
(31:48):
You know, having the thingcompletely blown up, which you
know is, as you said, unlikelyto happen anytime soon.
Listen, this has been great.
Really appreciate your time.
Is there one thing that you'dwant the people in the
retirement industry to knowabout what EBRI's doing in the
future that they should belooking for?
Speaker 1 (32:11):
Oh, good question.
We have a very, very ambitiousresearch agenda for 2025, both
on the retirement side, thehealth side, financial
well-being.
We're actually we're just inthe process we look at financial
well-being benefits beingoffered across employers.
(32:31):
We've typically done that onlyfor large, large employers.
We're now actually looking atthat for small and medium-sized
employers.
So we are trying to take a lookat the research that we're
doing and making sure it's, youknow, as broad and covers as
many different types ofbusinesses as possible.
(32:52):
So you know I'm excited aboutthat.
I know Craig actually justreleased retirement security
projection modeling, results ofthe auto, all the different auto
features, autoenrollmentportability,
(33:12):
auto-escalation.
So I mean there's lots ofinteresting things that we're
going to be looking at in thecourse of 2025.
And I hope people will continueto check us out and you'll
continue to see EBRE quoted inthe media pretty much every
business day of the year.
And to find out more informationabout EBRE, go to day of the
(33:34):
year and to find out moreinformation about EBRI, go to
EBRIorg and you can look at themembership information, and lots
of EBRI information is actuallyavailable to the public.
That's part of our mission.
And then, of course, there issome of our research.
That's for members only.
Speaker 3 (33:49):
That's EBRIorg.
Well, thank you so much foryour time.
Thanks for having me.
Speaker 1 (33:53):
Really appreciate it.
Thanks for having me, brian,appreciate it.
(34:14):
Thank you.
Employees really weren't, unlike me, who stayed
with Mercer for 40 years.
People really weren't stayingwith one employer for their full
career and if you don't, youreally don't get the full
benefits of a defined benefitplan.
Speaker 2 (00:12):
DC Pension Geeks brings you exclusive
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Graff, an attorney, accountant,former Capitol Hill staffer and
CEO of the American RetirementAssociation.
If you're looking for aninsider's view of all the twists
and turns that Washington takeson the road to ensuring a
(00:33):
secure retirement for millionsof Americans, you're in the
right place.
Welcome to DC Pension Geeks.
Speaker 3 (00:39):
All right, everybody.
Welcome back to another episodeof DC Pension Geeks.
I'm Brian Graff, ceo of theAmerican Retirement Association
and with me today, veryfortunate to have our guest
Barbara Marder.
And Barbara is the CEO of theEmployee Benefits Research
(01:02):
Institute.
Or is it president Barb?
Speaker 1 (01:05):
President and CEO.
Speaker 3 (01:06):
President and CEO.
You got both titles.
Good for you.
Apparently, yeah, I only getone CEO.
Woe is me, anyway.
So, as I indicated, she'spresident and CEO, or she
indicated president and CEO ofthe Employee Benefits Research
Institute, which is asignificant player in the policy
(01:27):
world here in Washington DCwith respect to employee
benefits, and a particular noteto us is obviously their role in
retirement policymaking, andwe're going to get into that.
But, as tradition has it, we'regoing to start with a little
(01:48):
bit more about you personally,and what we'd like to ask is you
know, how did you end up beinga pension geek and get into the
retirement world?
Because, like me, no oneactually thought about doing
this when they were inelementary school.
Speaker 1 (02:08):
Well, you're right, brian, I did not think about it
in elementary school, but I willsay that I ended up being a
pension geek before I leftcollege.
Speaker 3 (02:18):
Ooh intriguing.
Speaker 1 (02:21):
Yes, In my senior year of college I was a math and
economics double major and myadvisor said you should look
into being an actuary and I hadnever heard of that.
So they arranged for me to havean internship with a pension
actuarial consulting firm and Idid that part-time.
(02:44):
My senior year took my firstactuarial exam and they hired me
out of college.
So there I was, all of probably21, a pension actuary or a
budding pension actuary, and Istayed with that firm just for
(03:10):
about another six months andthen in 1983, I joined Meidinger
at the time, and then Meidingerwent through a whole series of
mergers, ended up being mergedwith Mercer, and I spent 40
years of my career at Mercer.
Speaker 3 (03:23):
So so you knew you wanted to be a pension actuary
when you were starting the SOAexams.
Is that what I heard?
Speaker 1 (03:30):
Yeah, I did.
I mean I did Again.
Until my senior year of collegeI had never heard of being an
actuary or the actuarialprofession but then really
investigated the profession andI even interviewed like for the
job.
I even interviewed a socialsecurity.
I interviewed with someinsurance companies and actually
(03:50):
the sort of the people Iinterviewed suggested you'd be
great in consulting, you shoulddefinitely head into the
consulting field and I continuedwith the exams and the rest was
history.
So a pension geek at a veryearly age.
Speaker 3 (04:09):
Fantastic.
So did you?
I mean, did you focus obviouslyfocus primarily on larger
defined benefit plans?
I assume yes, both singleemployer and multi-employer.
Speaker 1 (04:24):
Yes, Both single employer and multi-employer
Mostly single employer, Mostlysingle employer.
A few public plans versusprivate, but mostly large
private defined benefit plans.
And then I'm going to say aboutmaybe 10 years in, I was
exposed to the definedcontribution side as well and
(04:45):
did a fair bit of consulting onthat side.
And at one point at Mercer Iwas the global defined
contribution consulting leader.
So I actually organized peoplearound the globe at Mercer who
were leading that country'sdefined contribution consulting
(05:07):
work and it was prettyfascinating because it, you know
, the idea really was what canwe pick up from one country that
could help inform the other?
So that was really, it wasreally a meeting of kind of
thought leaders to try to helppredict what might be coming and
to actually bring bestpractices and maybe worst
(05:28):
practices, making sure we knewabout them and we could bring
them to the different countries.
Speaker 3 (05:33):
So you kind of saw, you know, in your practice.
You were firsthand witnessingthe kind of transition away from
larger defined benefit plans todefined contribution plans and
sort of consulting with largeemployers on, on and on how to
do that.
Obviously, some of thecontroversial, you know, going
(05:55):
back into the nineties, or theconversions to cash balance
plans among and then and thenthe controversies around you
know the of, essentially, youknow terminating plans and
having them bought out byinsurance companies to de-risk
(06:21):
the employer's liability.
On the DC side, you know, oneof the things that we hear from
in Washington is this sort ofwoe around this transition that
has occurred over the lastseveral decades and that wistful
(06:43):
thinking about the good olddays when everyone had a defined
benefit plan, although Isometimes question how really
good that was, because you knowonly certain people at certain
employers did have those things,but when they did they were
great.
I mean, do you have anythoughts yourself as to?
(07:07):
You know why that happened andis it realistic?
As you know, someone likeBernie Sanders would like to see
to go back to those days ofprimarily defined benefit plans.
Speaker 1 (07:24):
Yeah, I do have fond memories of defined benefit
plans and, you know, was evenfortunate to be working with
organizations when, you know,the interest rate environment
was very favorable and many ofthese plans had surpluses and
you know our big job wasfiguring out how to spend those
(07:46):
surplus assets to benefitparticipants Right.
So you know there were reallythe some of the good old days of
defined benefits.
Speaker 3 (07:55):
Particularly in the 90s, there were the proposals
that were also controversial, toallow employers to take money
out of the plan.
Speaker 1 (08:04):
Yes, yes, so there were right.
There were kind of goodintentions and perhaps not as
good intentions about the use ofthose surplus assets, for sure,
but that's.
The issue is that you know whatwas once a very favorable
interest rate in economicenvironment, then it wasn't.
(08:24):
And you know corporations can't.
It's very difficult for them todeal with that kind of
volatility, and you know balancesheet volatility and the
accounting rules, and so it's.
I think it's understandablethat companies were skittish
(08:44):
about the plans.
And then I do think, combinedwith the changes in the
workforce and the fact thatemployees really weren't unlike
me who stayed with Mercer for 40years, people really weren't
staying with one employer fortheir full career.
And if you don't, you reallydon't get the full benefits of a
defined benefit plan.
(09:04):
And then you know again, backin the day, vesting schedules
were much longer.
People had to be with anemployer a fairly long period of
time to even get anything.
So, they weren't.
You know, they weren'teverything to everyone.
They were definitely great forsome and I know retirees who
have defined benefit plans.
(09:24):
They're typically very, veryhappy, very comfortable,
satisfied in retirement.
That's great.
But there were just too manyother economic and kind of
corporate factors that went intothat equation that made it
really not a sustainable model.
Speaker 3 (09:50):
And I've looked into this, spoken about this before.
I agree with you.
I actually I specifically pointto the change in the accounting
rules by the FinancialAccounting Standards Board that
were really the death knell forcorporate-defined method plans.
Because of that balance sheetvolatility, that became
(10:11):
unacceptable and if theleadership of publicly held
corporations' job is primarilyto enhance shareholder value, it
was very much contrary to that.
Speaker 1 (10:24):
Yeah, and then once you know, sort of once one large
company made the decision, youknow, then you're also looking
at competitive advantage ordisadvantage.
So if they do not have thatkind of balance, reliability and
I keep mine, you know wheredoes that leave me from a
competitive standpoint?
So it started to kind of getthat's where I feel like a lot
(10:48):
of the momentum came from Agreed.
Speaker 3 (10:51):
So let's go back to EBRI, so tell the audience you
know what is EBRI, what is it,what's its mission, what's its
focus and you know what its roleis in policymaking today.
Speaker 1 (11:06):
Absolutely.
And again, thanks for theopportunity to talk to your
audience about EBRI and what wedo.
So we are a member-fundednonprofit research institute and
our mission is to provideobjective, independent,
nonpartisan research to informand educate policymakers, as
(11:32):
well as inform the rest of theindustry in terms of product
development and marketinnovation.
We're not a trade association.
Ebrd does not advocate or lobby, but we are very comfortable
with our you know just the factsthe best data and information
(11:55):
being used by those who doadvocate to be sure that those
who are talking to policymakershave the best possible
information in their hands.
And then EBRI does directlyeducate policymakers, whether
that's through the research thatwe publish.
We have policymakers all thetime coming to our website
(12:17):
looking at our research, usingour research.
It's quoted often by many, manydifferent government
organizations.
And then we also do directlyhave educational sessions with
staffers and people on the Hill,again with the idea to let's
(12:37):
just make sure that, as thesepolicymakers are making
decisions, as they're hearingfrom the lobbyists and the
advocates, that they also havethe information to be able to
challenge the information, to beable to challenge, ask the
right questions and make thebest decisions.
And I think it is a unique rolethat EBRE plays, because we are
(13:04):
unique in that we're providingthis information, but we don't
take positions one way or theother.
Speaker 3 (13:07):
So, and you're right, I do think it is an important
and unique role and we're, as anorganization the ARA is very
happy to be involved with, as amember of, and we're very happy
to have you as a memberprominent things from a subject
(13:31):
matter, substance standpoint,that you guys produced the
Retirement Confidence Survey, aswell as the simulation model
that sort of projects out howAmerican workers will do under
various proposals.
Can you talk a little bit aboutboth those?
Speaker 1 (13:48):
Absolutely.
The Retirement ConfidenceSurvey, I think, is one of the
most robust pieces of research.
It's a survey of both workersand retirees.
We've been doing it for 30years.
We're able to not just look atcurrent sentiment and confidence
(14:09):
in retirement but actually lookat changes in that over a year,
so it's really interesting.
But it really covers such awide range of topics from how
confident are you that you'll beable to live a secure and
financially secure retirement?
But we asked questions aboutguaranteed income and I thought
(14:32):
one of the just really afascinating finding from the
2023 survey is we asked workersyou know how many of you what
percentage would be interestedin having purchasing some kind
of a guaranteed income productat retirement.
And it's around 80%, which Ithink is substantial.
(14:59):
When we looked at that by age,the youngest people, those in
the 25 to 29 age group 93% saidthey would be interested.
So it's very interesting to methat this youngest generation is
probably looking out.
They're seeing what's happening, maybe even looking at family
members or you know what's goingon and saying, wow, you know, I
(15:21):
should try to find a way tomake sure I have some kind of
guaranteed income in retirement,probably not thinking that
Social Security will be onesource of that.
They may not think of those twotogether.
We do ask questions aboutSocial Security and confidence
that Social Security will bethere, et cetera.
But people are pretty confidentthat it will be.
(15:42):
But you know, it's veryinteresting.
So that's retirement confidencehas lots of different facets to
it and the retirement securityprojection model is very
interesting.
It's a stochastic model and itallows us to look at the impact
of different policy changes onthe overall savings US savings
(16:03):
gap.
So we can really get veryspecific about whether a
particular policy will increasethe shortfall.
The saving shortfall willreduce the saving shortfall by
how much, and then we can lookat it by all kinds of different
demographic cuts and ages andincome.
So it's a very powerful tool tolook at the impact of different
(16:26):
changes.
Speaker 3 (16:28):
So, talking a little bit more about the retirement
confidence survey, there's ahuge gap in perception about the
?
U the sky is falling.
And then there's others whofeel economists that feel that
(16:59):
you know everything's completelymisconstrued by those
economists.
And quite the contrary.
The IRS data, for example,shows that seniors are actually
doing quite well, in factarguably better, than their
younger working counterparts tosome degree.
So do you see that distinctionin the RCS between people
(17:24):
actually kind of who are nervousas they encroach retirement and
then when they get there, ohwell, this is not so bad.
Speaker 1 (17:33):
Yeah, actually, the confidence and satisfaction
levels in retirement are pretty,I mean, they're pretty
optimistic.
It's not like a third of peopleare confident they'll have
enough money in retirement orthat they're retiring and will
have enough to last the rest oftheir retirement.
The numbers are in the 60, 70%that they're confident they will
(17:58):
have money to live throughouttheir retirement, which, again,
that's pretty optimistic.
So so agree with you that youknow you do see surveys all
across the board and you know,clearly, looking at current
retirees versus people who won'tbe retiring for another 30
years, I mean you'll definitelysee differences.
(18:19):
But I would say, all in all,our surveys are relatively
optimistic about having enoughfor a secure retirement.
Speaker 3 (18:29):
So you mentioned Social Security, so you
mentioned Social Security.
Sometimes, when I'm attendingsessions or talking to policy
(18:51):
folks, particularly economists,about the retirement system,
it's almost as if SocialSecurity doesn't exist, and one
of the things that is afrustration for me is that lack
of recognition that we actuallydo have a mandatory retirement
system and it's a definedbenefit plan, by the way and the
(19:12):
critical role that it plays inconjunction, the foundational
role that it plays inconjunction with the private
system, and I think you guys areworking on trying to link those
two together in a more holisticway to demonstrate that value
proposition.
Speaker 1 (19:31):
Yeah, you're right, I mean we think about the
three-legged stool or whateverwe want to call that value
proposition.
Yeah, you're right, I mean wethink about the three-legged
stool or whatever we want tocall that now.
But clearly the US system is aprivate-public partnership and,
as you say, social Security is avery important piece of the
(19:52):
equation for many, many workers.
And we did.
In fact, craig previewed someresearch at our December Policy
Forum.
In fact, will Hansen was on thepanel where we discussed it.
And you know the replacement.
We were looking at replacementratios.
So we were looking to see ifyou combine for a full career,
(20:16):
if you combine Social Securitywith the income that you would
expect to get from a definedcontribution plan.
Obviously we have manyassumptions underlying that.
The replacement ofpre-retirement income when you
bring the two together wasstrong.
(20:38):
Again, now I'm talking about afull career.
You know a 30-year careerworker, but you know that
doesn't have to be with oneemployer.
Speaker 3 (20:49):
You know which is sort of used to be in the
defined benefit.
I mean, I think your modelassumes that there might be some
gaps in contributions in theprivate sector, which is pretty
typical, but in general, youknow, throughout that 30 years
you're obviously in the socialsecurity system but you're also,
for at least a sizable portionof that 30 years, contributing
(21:10):
to a defined contribution plan.
Speaker 1 (21:12):
Exactly least a sizable portion of that 30 years
contributing to a definedcontribution plan?
Exactly, yeah, but the result Imean, and especially for middle
income you know, I know thereis some talk about that the
current private definedcontribution system really only
benefits the most highly paid,but our numbers definitely show
the impact on the middle classof you know, the current, the
(21:35):
current private definedcontribution system plus Social
Security.
Speaker 3 (21:39):
Right, you know some people say that Social Security
for the does a pretty good jobfor lower income individuals in
retirement.
But you know it's the middleclass that would really be
suffering in the absence of adefined contribution system,
absolutely so recently there'sbeen this Washington DC love
(22:03):
affair among some of the policywonks with our good friends down
under in Australia, and theycall it the superannuation
system, which is their versionof a mandatory retirement system
, which one of the things thatdrives me crazy about these
(22:26):
comparisons is that people tendto compare the Australian system
with the 401k system, and it'sreally apples and oranges,
because the Australian system isa mandatory retirement system.
The 401k system is asupplementary retirement system,
private, on top of ourmandatory retirement system, and
(22:48):
I've tried to stress to some ofthese academics, to no avail,
that the real comparison shouldbe between the Social Security
system in our country andAustralia's mandatory retirement
system, which is, you know, aDC system versus a DB system.
Right, and why do we have thatgap of understanding about how
(23:22):
the US system really is a dualsystem, when everyone seems to
be making these comparisons?
Speaker 1 (23:38):
either, without really contemplating the fact
that we do have this dual model.
Yeah, I think you know.
I think it's complicatedbecause when you look at either
system, as you were saying,there's different components to
it.
There's, you know, the SocialSecurity, the safety net
component that actually bothcountries' retirement systems
have.
Speaker 3 (23:57):
Although the Australian fallback, they have a
quote old age pension default.
For someone who you know who isbut the A, it's very minimal.
Speaker 1 (24:10):
It's quite low.
Speaker 3 (24:11):
Yeah, it's very small and it's only for a very
limited number of people, basedon their incomes, whereas Social
Security, you know, providesbenefits yeah, particularly
again for middle income folkswho would be not anywhere close
to a reasonable incomepercentage of replacement income
(24:32):
in the absence of SocialSecurity.
So, yes, there is that, youknow, minimal component of if
things go awry but it is a DCmodel that we're depending on
the economy assets could go down.
Speaker 1 (24:48):
Right, exactly, exactly.
I mean, I think, those enamoredof the Australia system and you
know I did.
Actually, mercer puts out aglobal pension index every year.
Speaker 3 (24:58):
I always think it's interesting to see where you
know, yeah, I'm aware, and I getfrustrated with it.
Speaker 1 (25:05):
You know clearly Australia is way ahead of the US
.
But interestingly, when youlook at the subindexes as it
goes to adequacy the sort of theadequacy I'm just looking so
Australia's adequacy subindexwas like 68.4 and the US was
63.9.
(25:26):
It's not that radicallydifferent.
There are other parts of theindex that really drive the
comparisons, not as much onadequacy, but I think it really
gets to that the fact that it'smandatory, which means there's
broader coverage.
We have a mandatory system too,right, right, but people don't
like.
Again, it's complicated becausepeople are comparing apples and
(25:50):
oranges.
But you know again, with amandatory system you get, you
know, broad coverage of workersand different kinds of workers
self-employed, evenself-employed, you know,
part-time.
Speaker 3 (26:00):
So I think that's it's like Social Security does.
Speaker 1 (26:03):
Right, but that's where I think people get really
enamored with the system as, aswell as other mandatory systems
that are that look like ourdefined contribution system, you
know, but are, but aremandatory.
Speaker 3 (26:20):
So I feel like that's where so the way, so the way I
view it is if we have amandatory defined benefit system
and yes, it needs to get funded, but I'm I'm completely
operating under the assumptionthat that will get figured out,
it'll be fixed.
Yeah, it's going to getaddressed.
Fixed may be too strong a wordbut it's going to get addressed
because politically there's nochoice and it's going to be
(26:43):
maintained as a defined benefitsystem.
It's not going to be privatizedas the political word that's
been used about the socialsecurity system before.
So we're going to have a DBsystem and then we're going to
have a DC system.
And I think the question iswould it be a good idea for the
(27:06):
government to be running both?
And my view, I think our viewas an organization, is that's
not a good idea.
We like the idea of thegovernment running the DB
component, but we don't want thegovernment centralizing and
running the DC component.
That would be a concern from adiversification standpoint.
(27:29):
I think people would love,people like the idea of having
that dual model because of thatdiversification.
Speaker 1 (27:37):
Yeah, I mean the private-public partnership has
served us really well with theretirement system and it feels
like a very radical shift andmaybe unnecessary to go in that
direction.
Again, you know EBRE doesn'ttake positions, but we certainly
support the employer provided,the employer provided system.
(28:01):
We are the Employee BenefitResearch Institute after all, so
the I mean.
The other thing that I think isinteresting is there there's
more to come in terms oflegislation that's already been
passed, that hasn't been, youknow, that hasn't gone into
place yet.
That will continue to addresssome of the gaps, whether it's,
(28:25):
you know, coverage gaps or it's,you know, things like auto
enrollment to increase savingsrate, especially among lower
income, the savers match.
There's lots of things that havealready been passed that will
go into place over the next fewyears that will continue to fix
(28:45):
some of the challenges to thecurrent public-private system,
public-private system.
I'd love to see how thosethings shake out, how they work.
I don't think we're necessarilydone.
I think there's plenty of othertweaks.
I'm not saying there will be asecure 3.0 or whatever, but
there are plenty more thingsthat I think are being
considered.
I know, you know, I've heardlots of different things.
Speaker 3 (29:08):
I'd love to see the impact of those before we, you
know, go to some radical changeat this point and there are
proposals, I certainly agreewith you, and, by the way, there
will be a Secure 3.0, it's justa question of when and, along
those lines, you know there areideas being talked about to try
(29:28):
to, as you said, not only do wewant to see what happens with
the implementation of things inSecure 2.0, but there are
further ideas being consideredto try to close the private
coverage gap amongst thoseemployees that don't have access
(29:50):
to a workplace retirement plan.
And, frankly, something youmentioned, the gig work, the,
you know, the gig economy.
There's a, there's a growingnumber of workers in this
country and that probably thatshift is probably not going to
reverse anytime.
Yeah, who are not, you know,who are self-employed in some
(30:10):
capacity, and we want to try tomake it easier for them to save
on a, on a on top of socialsecurity too.
Speaker 1 (30:18):
Absolutely.
Yeah, I think.
I think there are so manythings that are being kicked
around that you know.
Again, I'd love to see whatwill happen over the next few
years, as both things alreadyenact, you know, things already
legislated and others come intoplay.
So I think it'll be interestingand in the meantime, I'm sure
(30:40):
we'll continue to hear thedebate about you know where we
should scrap everything and godo this and do that, but you
know those kind of very radicalchanges.
I'm not sure the industry isready for that, but you know.
Speaker 3 (31:00):
You know, I'm not just, not only the industry, but
I'm not sure the, you know, I'mnot sure the American people
are ready for that either.
I mean, I think the idea ofhaving, you know, the government
controlling all of myretirement savings is something
that, at least among certainquarters of our country,
there'll be a lot of resistanceto that.
So I think building on thesuccess of the current system,
(31:26):
which isn't perfect by any means, is a lot more pragmatic and
likely to occur than, you know,throwing the whole thing out,
which is something I've tried tostress to my academic friends,
who are more inclined to throweverything out, like, listen,
let's work together on things tomake the current thing better,
as opposed to fighting eachother over.
(31:48):
You know, having the thingcompletely blown up, which you
know is, as you said, unlikelyto happen anytime soon.
Listen, this has been great.
Really appreciate your time.
Is there one thing that you'dwant the people in the
retirement industry to knowabout what EBRI's doing in the
future that they should belooking for?
Speaker 1 (32:11):
Oh, good question.
We have a very, very ambitiousresearch agenda for 2025, both
on the retirement side, thehealth side, financial
well-being.
We're actually we're just inthe process we look at financial
well-being benefits beingoffered across employers.
(32:31):
We've typically done that onlyfor large, large employers.
We're now actually looking atthat for small and medium-sized
employers.
So we are trying to take a lookat the research that we're
doing and making sure it's, youknow, as broad and covers as
many different types ofbusinesses as possible.
(32:52):
So you know I'm excited aboutthat.
I know Craig actually justreleased retirement security
projection modeling, results ofthe auto, all the different auto
features, autoenrollmentportability,
(33:12):
auto-escalation.
So I mean there's lots ofinteresting things that we're
going to be looking at in thecourse of 2025.
And I hope people will continueto check us out and you'll
continue to see EBRE quoted inthe media pretty much every
business day of the year.
And to find out more informationabout EBRE, go to day of the
(33:34):
year and to find out moreinformation about EBRI, go to
EBRIorg and you can look at themembership information, and lots
of EBRI information is actuallyavailable to the public.
That's part of our mission.
And then, of course, there issome of our research.
That's for members only.
Speaker 3 (33:49):
That's EBRIorg.
Well, thank you so much foryour time.
Thanks for having me.
Speaker 1 (33:53):
Really appreciate it.
Thanks for having me, brian,appreciate it.
(34:14):
Thank you.
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