Automatic IRAS: Lower-Earning Households Could Realize Increases in Retirement Income
Published: 2013-08-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Participants in DC plans and IRAs may receive tax incentives for their contributions and lower-earning households may qualify for the Saver's Credit, an additional tax incentive for their contributions. However, less than half of the workforce participates in an employer-sponsored plan and upper-income workers have been more likely to take advantage of associated tax incentives. In recent years, proposals have been put forth to modify the Saver's Credit and create automatic IRAs, under which employers who do not sponsor a plan would generally be required to offer their employees the opportunity to save in an IRA through payroll deduction. These proposals would have fiscal impacts for the federal government.
GAO was asked to review tax incentives for contributions to DC plans and automatic IRAs. GAO examined (1) the earnings and tax rates of households that do not have DC plans or IRAs, (2) the effects of the Saver's Credit on retirement income, and (3) the effects of automatic IRAs on retirement income, especially for low- and middle-income workers. GAO examined the characteristics of households that do not take advantage of these tax incentives using data from the 2010 Survey of Consumer Finances, simulated the effects of the Saver's Credit and automatic IRAs, and reviewed related proposals.
GAO is making no recommendations. GAO received technical comments on a draft of this report from the Department of Labor and the Department of the Treasury, and incorporated them as appropriate.
section_title: What GAO Found
paragraphs: Households without employer-sponsored defined contribution (DC) pension plans or individual retirement accounts (IRA) had lower incomes and tax rates than households with those plans, and are also likely to have limited additional resources to draw upon in retirement, according to GAO estimates. The median adjusted gross income for households without DC plans or IRAs was $32,000, compared to $75,000 for those that did have them. The median marginal tax rate for households without DC plans or IRAs was 15 percent, compared to 25 percent for households with those savings vehicles. A defined benefit (DB) pension plan could provide a monthly benefit during retirement years for those without a DC plan or IRA; however, in 2010 only 15 percent of married households and 11 percent of single households without a DC plan or IRA had a DB plan.
The existing Saver's Credit tax incentive could result in small increases in a household's retirement annuity--that is, the household's annual retirement income received from DC or DB plans. GAO estimates that, on account of this credit, the median annuity increase for households in the lowest earnings quartile ($929-34,377) would be $155. If, however, the Saver's Credit was refundable (i.e., could generate a tax refund in excess of tax paid), it could result in larger increases in households' annuities across all earnings levels, and the median increase for households in the lowest earnings quartile would be $876 per year.
Implementing automatic IRAs, unless waived by participants, could expand retirement coverage and modestly increase retirement annuities for households at all earnings levels. Specifically, 7 percent of all households could receive retirement annuities from automatic IRAs even though these households had no DB or DC plans, according to GAO's projections. Workers with DB or DC plans could also benefit from automatic IRAs at certain points in their lifetime if their jobs do not offer such plans. Moreover, low-income workers could see a sizable increase in their annuities under automatic IRAs and the existing Saver's Credit--the projected median dollar increase for these households' annual retirement annuity would be $479.

section_title: Letter
paragraphs: Workers who make contributions to defined contribution (DC) pension  plans and individual retirement accounts (IRAs) meeting certain  qualifications receive favorable federal tax treatment, such as tax  deferred savings. These tax preferences are one of the largest tax  expenditures in the federal government. Under DC plans and certain  IRAs, taxes on contributions and investment earnings are deferred until  benefits are received in retirement. In fiscal year 2012, the estimated  revenue loss associated with these accounts included $51.8 billion for DC  plans and $16.2 billion for IRAs. In addition, an estimated $1.1 billion in  federal tax revenue was forgone in fiscal year 2012 due to the Saver’s  Credit, a tax credit to encourage workers with low earnings to contribute  to a pension plan or an IRA. The purpose of giving such plans and IRAs  preferential tax treatment is to encourage employers to form new plans or  maintain existing ones and to encourage workers to save for retirement.
Studies  workers are not prepared for retirement, even with these tax incentives.  Further, as we have previously reported, there is concern that much of  the tax benefits flow to workers with higher earnings who have a greater  incentive to save, and the financial constraints on lower-wage workers  limit their ability to contribute to tax-qualified plans.
In recent years, both members of Congress and the President have  proposed requiring employers who do not sponsor a plan to offer their  employees the opportunity to make contributions to an IRA through  automatic payroll deduction. In addition, in his 2010 and 2011 budgets,  the President proposed modifying the existing Saver’s Credit by making it  refundable, expanding the number of households eligible for the credit by  increasing the adjusted gross income (AGI) limit, and providing the same  credit rate to all recipients. Bills pending before Congress in 2012 and  2013 would make various changes to the Saver’s Credit as well, including  making it refundable.
In light of your interest in understanding the extent to which workers with  lower earnings could benefit from tax-deferred retirement savings  accounts and automatic IRAs, this report addresses the following  questions:  1.  What are the earnings and tax rates of households that do not have  DC plans or IRAs?  2.  What are the effects of the Saver’s Credit on retirement income?  3.  How would automatic IRAs affect retirement income, especially for  low- and middle-income workers?
To answer the first question, we used data from the 2010 Survey of  Consumer Finances (SCF) to analyze the earnings and tax rates of  households that did not take advantage of the existing tax incentives for  retirement saving. To answer the two subsequent questions, we used the  Policy Simulation Group’s (PSG) microsimulation models to assess the  distributional effects of the existing Saver’s Credit, the President’s 2011  budget proposal to modify the Saver’s Credit, and H.R. 4049, which  would have established automatic IRAs and which was pending before  the 112th Congress. We also reviewed relevant federal laws and  regulations, as well as, presidential and legislative proposals related to  the Saver’s Credit and automatic IRAs. We conducted a data reliability  assessment of the PSG models and selected variables from the SCF by  conducting electronic data tests for completeness and accuracy,  reviewing documentation on the dataset, or interviewing knowledgeable  officials about how the data are collected and maintained and their  appropriate uses. We found that for the purposes of our analysis, the data  that we analyzed were sufficiently reliable. Finally, we interviewed experts  in the area of retirement income security.
We conducted this performance audit from May 2012 to August 2013 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: U.S. Retirement Saving System
paragraphs: According to one study, in 2011, 54 percent of wage and salary workers  aged 21-64 worked for an employer that sponsored a pension plan, such  as a defined benefit (DB) plan or a DC plan, but only about 45 percent of  wage and salary workers aged 21-64 actually participated in the plan.  DB plans provide periodic benefits in retirement that are generally based  on employees’ salaries and years of service. Employers may also choose  to sponsor DC plans, under which both employers and employees can  make contributions to the plan. Distributions in retirement are, in turn,  based on contributions and investment returns in these accounts.
Private sector employer-sponsored DB and DC plans are generally  subject to the Employee Retirement Income Security Act of 1974  (ERISA), as amended, which establishes standards for private sector  pension plans and sets forth protections for participants in these plans.  The Department of Labor’s Employee Benefits Security Administration  (EBSA) generally administers and enforces the Title I provisions of  ERISA. These employer-sponsored plans must also meet certain  requirements in the Internal Revenue Code (IRC), which are enforced by  the Internal Revenue Service (IRS).
Individuals can also save for retirement through IRAs, which allow  individuals to make contributions for retirement regardless of whether   The IRS has primary  they are covered by an employer-sponsored plan.responsibility for ensuring that IRAs meet IRC requirements necessary to  qualify for preferential tax treatment.
Employers are continuing to shift away from sponsoring DB plans toward  sponsoring DC plans. Data from the Department of Labor show that over  the past few decades, DC plans have become the predominant plan type  offered by private sector employers. Indeed, in 2010, over 90 percent of  all employer-sponsored plans were DC plans. IRAs have also grown in  importance in recent years and are a key retirement savings vehicle for  many individuals. According to data from the Investment Company  Institute, in the first quarter of 2013, IRA assets represented a larger  portion of total U.S. retirement assets than 401(k) plans, the main type of  DC plan. Specifically, IRA assets totaled almost $5.7 trillion, which  represents about 27 percent of U.S retirement assets. In comparison,  401(k) assets accounted for about $3.8 trillion, or 18 percent, of U.S.  retirement assets. Rollovers from 401(k) plans and other employer- sponsored plans are the predominant source of contributions to IRAs.  Approximately 95 percent of money contributed to traditional IRAs in 2008  was attributable to rollovers, primarily from employer-sponsored plans.The greater reliance on DC plans and IRAs in the current retirement  landscape indicates that the tax incentives are increasingly relevant for  promoting retirement saving.
section_title: Tax Incentives for Retirement Saving
paragraphs: Tax preferences for pension plans are structured to encourage individuals  to save for retirement. Contributions to DC plans that fall within certain  limits and investment earnings on assets are not taxed until distributions  are paid to participants. Further, there are tax incentives for  contributions to IRAs. There are two main types of IRAs: traditional and  Roth.
A traditional IRA allows individuals to make tax deductible  contributions to their accounts, and distributions are generally subject  to income tax. For traditional IRAs, deductions for contributions are  subject to limits based on income and pension coverage. Distributions   made prior to age 59 ½, other than under specific exceptions, are  generally subject to additional 10 percent tax.
A Roth IRA allows individuals to make after-tax contributions to their  accounts, and generally distributions after age 59 ½ for accounts at  least 5 years old are not subject to income tax. For Roth IRAs,  distributions prior to age 59 ½ are taxable on portions attributable to  earnings on contributions with an additional 10 percent tax on  distributions other than for specified purposes.
section_title: Saver’s Credit
paragraphs: To further encourage low- and middle-income individuals and families to  save for retirement, the Economic Growth and Tax Relief Reconciliation  Act of 2001 authorized a nonrefundable tax credit (the Saver’s Credit) of  up to $1,000 against federal income tax. Eligibility is based on a  worker’s adjusted gross income (AGI) and contributions made to qualified  pension plans and IRAs. The credit rate phases out as AGI increases,  and the rate is applied to qualified contributions up to $2,000 for  individuals and $4,000 for households. The total Saver’s Credit amount  is equal to the amount of contributions multiplied by the credit rate (see  table 1). Because the credit is nonrefundable, the ability to receive the full  amount of credit is limited not only by income eligibility, but also by  whether the taxpayer’s tax liability is large enough. In fiscal year 2012, the  Saver’s Credit cost the federal government about $1.1 billion in revenue  forgone, and revenue losses are estimated to amount to $6.2 billion for fiscal years 2013-2017, according to the Department of the Treasury.
To expand retirement savings incentives for working families, the  President’s fiscal year 2010 and 2011 budgets proposed modifying the  Saver’s Credit. These modifications included: (1) making the credit  refundable, (2) eliminating phase-out of the credit rate so that all eligible  households would receive a 50 percent credit rate, and (3) extending the  AGI limit to $85,000 for married couples filing their federal income taxes  jointly. The estimated cost for this expansion of the Saver’s Credit was  $323 million for fiscal year 2011 and $29.8 billion for fiscal years 2011- 2020, according to the President’s 2011 budget proposal.Committee on Taxation estimated that the Administration’s 2011 proposal   The Joint  would have cost about $27.5 billion for the same period. These  modifications were not adopted and were not included in the President’s  budget proposals for fiscal years 2012 through 2014. Bills introduced  during the current and immediately preceding legislative sessions include  provisions for similar modifications to the Saver’s Credit, including making  the credit refundable and increasing the AGI range for taxpayers eligible  for the 50 percent credit rate.
section_title: Automatic IRA Proposals
paragraphs: Automatic enrollment has been advocated as a way to encourage greater  participation in 401(k) plans. Our past work has shown that automatic  enrollment policies considerably increased 401(k) participation rates for  plans that adopted them. Automatic IRAs would similarly extend the  benefits of payroll-deduction savings and automatic enrollment.  Legislative proposals to establish automatic IRAs have been introduced in  both the House of Representatives and the Senate in recent legislative  sessions.through 2014 included a proposal to establish automatic IRAs.
Additionally, the President’s budgets for fiscal years 2010  Under the 2012 automatic IRA legislative proposal, certain employers  who do not maintain a qualified pension plan would be required to make  available an automatic IRA arrangement to eligible employees. Typically,  under this proposal, 3 percent of the employee’s salary would be  automatically contributed to an IRA through payroll deduction, unless the  employee elects to terminate his or her participation. Investment options  for automatic IRAs would be limited to certain types of funds, such as  principal preservation and target-date or life cycle funds, and target-date  funds would be the default investment option. If the employer elects,  employees would also have the option of using their contributions to  purchase a retirement bond, which would provide a low-cost investment  option where small account balances are pooled together until they are  large enough to be profitable in the private market. This proposal also  includes a provision for a tax credit for small employers to recoup start-up  costs of establishing and maintaining automatic IRAs, such as setting up  an automatic payroll deduction for employees. Automatic IRAs would also  introduce costs to the federal government through the loss of federal  income tax revenue. According to the President’s 2014 budget proposal,  losses for automatic IRAs are estimated to amount to $1.1 billion for fiscal  year 2015 and $17.6 billion for fiscal years 2014 through 2023, if the  proposal were to be enacted.
section_title: Households Without DC Plans or IRAs Had Lower Adjusted Gross Incomes
subsections: section_title: Households That Do Not Save for Retirement Have Lower Adjusted Gross Incomes and Marginal Tax Rates Than Those That Do Save
paragraphs: We found that households that do not save for retirement had lower AGI  than those that do, regardless of age group or tax filing status (see fig. 1).  Based on our analysis of the SCF data, we estimate that in 2010  approximately 43 percent of households working in the private sector did   We also estimate that the median AGI of all  not have a DC plan or IRA.households that did not have a DC plan or IRA was $32,000, compared to  $75,000 for those that did—a difference of about 43 percent. These  trends hold across age groups and tax filing statuses in 2010. In addition,  we estimate that 56 percent of single households did not have a DC plan  or IRA, while 36 percent of married households did not and married  household AGI was consistently higher than single household AGI.
In addition, households without DC plans or IRAs have lower median  marginal tax rates than households with DC plans or IRAs. A marginal tax  rate is the rate of tax paid on the next dollar of income that a taxpayer  earns. Generally households with higher earnings have higher marginal  tax rates, and tax incentives are worth more to these households. Based  on our analysis of the 2010 SCF data, we estimate the median marginal  tax rate for households with DC plans or IRAs to be 25 percent and 15  percent for households without such savings vehicles. Across age groups  and tax filing statuses, more households with higher median marginal tax  rates took advantage of tax incentives for retirement saving than  households with lower median marginal tax rates (see fig. 2). For  example, married households age 45 to 54 that did not have a DC plan or  IRA had a median marginal tax rate of 15 percent, and those that did  save had a median marginal tax rate of 25 percent. Single households  age 45 to 54 that did not have a DC plan or IRA had a median marginal tax rate of 15 percent, compared to 22 percent for those that did save.
As mentioned previously, DB plans typically provide a monthly benefit  once an individual reaches retirement age and could be a source of  retirement income for households without DC plans or IRAs. However,  the prevalence of DB plans has declined over the past few decades.  Consistent with overall trends, we found that few households without DC  plans or IRAs have a DB plan (see fig. 3). Only 15 percent of married  households and 11 percent of single households without a DC plan or  IRA had a DB plan. Although most households without a DC plan or IRA  also do not have a DB plan, the first earnings quartile is worse off. For  example, an estimated 5 percent of married households in the first  earnings quartile had a DB plan, compared to an estimated 27 percent  and 31 percent of married households in the third and fourth earnings   The shift away from DB plans and the limited  quartiles, respectively.number of households that have them highlights the importance of other  retirement savings vehicles such as DC plans or IRAs.
We also analyzed the net worth—the difference between gross assets  and liabilities—of single and married households without DC plans or  IRAs by income quartile. Our evidence suggests that in addition to some  households not having a DC plan or IRA, these households also may  have limited additional assets to draw upon in their retirement years. For  example, single households in the first income quartile without a DB plan  had an estimated average net worth of $17,164. Married households in  the first income quartile without a DB plan had an estimated average net  worth of $70,485.
section_title: Modifying the Existing Saver’s Credit Could Result in Larger Increases in Retirement Income
paragraphs: The Saver’s Credit could increase retirement income for a sizeable  portion of the population, especially if modifications, such as making it  refundable and expanding eligibility, are included in its design. To  analyze the effect of the credit on retirement income, we modeled two  different Saver’s Credit scenarios: the existing credit and a modified  refundable credit. (See “Saver’s Credit Modeling Scenarios” text box  and app. II for detailed descriptions of these scenarios and the underlying  assumptions). Specifically, we projected the effects of the two different  Saver’s Credits for a cohort of individuals born in 1995 (see fig. 4). We  assumed that all eligible taxpayers claimed the credit, and found that  under the existing Saver’s Credit, just over a third of all individuals would  be projected to receive the credit at some point during their working  years. In contrast, we projected that about half of all individuals would  receive the credit at some point during their working years if it were  refundable. According to experts, the nonrefundable nature of the existing  credit may limit its utility for low-income households. Specifically, many  low-income households do not receive the full amount of the credit  because their tax liability is not high enough. Our estimates show that  changing the current design of the credit to make it refundable could  substantially increase the percentage of individuals who would receive  the credit. However, such modifications to the credit would also result in  increased costs to the federal government through the loss of tax revenue  and increased outlays.
Under both scenarios, the lowest two earnings quartiles have the largest  percentage of individuals who could receive the credit. For example,  under the existing Saver’s Credit, about 45 percent of individuals in each  of the lowest two earnings quartiles could receive it. Alternatively, a  refundable Saver’s Credit could result in more middle-income workers  receiving the credit, with an estimated 60 percent of individuals in the  second earnings quartile potentially receiving it. Because we present our  results across earnings quartiles that were based on lifetime earnings,  these results reflect individuals who could have received the credit while  they were lower earners but subsequently became higher earners.
Households could experience larger retirement annuity increases from a  refundable Saver’s Credit than the existing credit, according to our  projections (see fig. 5). For the purposes of this report, household  retirement annuities include all annual retirement income received from  DC or DB plans and represent income that the household receives in  retirement. DB plans typically provide benefits in the form of periodic  payments which can be summed together into one annual payment. DC  account balances represent a worker’s DC or IRA savings from past jobs,  and we assumed that at retirement, workers used their entire DC account  balance to purchase an annuity. We estimate that the median increase in  households’ retirement annuity under the existing credit could be $103  per year. In contrast, under a refundable Saver’s Credit, the median  increase could be $655 per year, according to our simulations. For both  Saver’s Credit scenarios, low- and middle-earning households could   For households in the lowest  receive the largest benefit from the credit.earnings quartile, we projected that the median increase in annuity under  the existing Saver’s Credit would be $155 per year, while the median  increase in annuity under a refundable credit would be $876 per year. In  addition, about 21 percent of households in the lowest earnings quartile  could see an additional $1,000 to $1,999 per year in their retirement  annuities under a refundable credit. Under the existing credit, only 6  percent of households could potentially receive an increase in annuity of  this size.
Our estimates of the percent change in median household retirement  annuities show similar trends. The refundable Saver’s Credit results in a  larger percent increase in the median household retirement annuity at all  earnings levels. In both scenarios, the projected percent increase in the  median household retirement annuity for the lowest earnings quartile was  larger than the increase for other earnings quartiles. According to our  projections, the percent increase in the median retirement annuity for low- earning households would be 4 percent under the existing Saver’s Credit  and 15 percent under a refundable credit.
section_title: Automatic IRAs Could Increase Retirement Income for Households at All Earnings Levels
subsections: section_title: Automatic IRAs Could Increase the Number of Lower-Earning Households with Retirement Savings and Modestly Increase Retirement Income
paragraphs: Automatic IRAs provide a new opportunity to increase the number of  households saving for retirement at all earnings levels. We project that 7  percent of all households had no retirement annuities from DB or DC  plans but could receive annuity income from automatic IRAs. (See  “Automatic IRA and Saver’s Credit Modeling Scenarios” text box and app.  II for detailed descriptions of the scenarios we modeled and their  underlying assumptions.) Based on our projections, more households in  the lowest earnings quartile would benefit than in any other earnings  quartile.or DC plan in the lowest earnings quartile could receive annuity income  from automatic IRAs, according to our analysis.
We analyzed H.R. 4049, the Automatic IRA Act of 2012 because it was the most recent legislative  proposal at the time we conducted our analysis. On May 16, 2013, H.R. 2035, the Automatic IRA Act  of 2013 was introduced before the House of Representatives. The differences between H.R. 2035  and H.R. 4049 are minimal and we determined that they would not have a significant effect on our  simulation results.
Under automatic IRAs, 36 percent of households could see modest  increases in their retirement annuities, according to our projections.  These households include workers who have not had access to a DB or  DC plan as well as workers who had access to DB or DC plans at some  jobs but not at others. Specifically, we projected that the median dollar  increase in a household’s annuity was $1,046 (see fig. 6).projections show that those in the lowest earnings quartile saw the  smallest median dollar increase in the household’s annuity ($479), the  percent change in the median annuity was 66 percent. In addition, we  estimate that 30 percent of households in this quartile saw an increase in  their annuity of $1,000 or more. In comparison, the percent change in the  median retirement annuity for households in the second earnings quartile  was 16 percent and the median dollar increase in the household’s  retirement annuity was $1,043.
Almost 75 percent of households could experience an increase in their  retirement annuity if the Saver’s Credit were made refundable at the  same time automatic IRAs were implemented (see fig. 7). Further,  according to our projections, making the Saver’s Credit refundable in  addition to implementing automatic IRAs could double the number of  households experiencing an increase in retirement income. Under this  scenario, many more households could benefit than under automatic  IRAs alone. Retirement annuities could increase if the household  participated in automatic IRAs, was eligible to receive the refundable  Saver’s Credit but not the existing Saver’s Credit, received a larger credit  under the refundable Saver’s Credit, or some combination of these  events. Further, under the proposals we used for our modeling, the  refundable Saver’s Credit would be available for certain households with  AGI of up to $85,000 a year, resulting in all lower and many middle- income households seeing an increase in their retirement savings.  Households in the two lowest earnings quartiles could be most likely to  benefit, with about 80 percent of households seeing an increase in their  retirement annuities, according to our projections.
Our projections show that households in the lowest earnings quartile  could gain the most from the combination of automatic IRAs and a  refundable Saver’s Credit. For these households, the percent increase in  the median retirement annuity could be 21 percent, compared to a  potential 2 percent increase for households in the highest quartile (see  fig. 8). Furthermore, 48 percent of households in the lowest earnings  quartile could see an increase in their retirement annuities of $1,000 or  more.
In general, under our projections, lower-earning households were more  reliant on Social Security for income in retirement than higher-earning  quartiles (see fig. 9). This may be because higher-earning households  have the ability to save more for retirement, generating a larger retirement  savings account at retirement. Further, Social Security benefits are  progressive and replace a larger portion of lifetime earnings for people  with low earnings than for people with high earnings. Thus, higher- earning households may receive a greater share of retirement income  from annuitizing their retirement savings than from their Social Security  benefits. The combined effects of automatic IRAs and a refundable  Saver’s Credit could decrease lower- and middle-income household’s  reliance on Social Security in retirement. Under our projections of  automatic IRAs, the two lowest earnings quartiles relied on Social  Security for 80 and 62 percent of their total household income,  respectively. However, the percent of income derived from a household’s  retirement annuity increased when we added a refundable Saver’s Credit.  The two lowest earnings quartiles relied on retirement annuities for 31  and 46 percent, respectively, of their household’s total income.
section_title: Concluding Observations
paragraphs: Concerns about retirement security have grown as private sector  employers have shifted to predominantly sponsoring DC plans. First,  despite existing tax incentives aimed at fostering plan formation and  coverage, less than half of workers aged 21-64 were covered by an  employer-sponsored plan in 2011 and the participation rate has barely  changed over the last several decades. Second, despite significant tax  incentives aimed at increasing retirement savings, many households  enter retirement without adequate financial resources.
Recent proposals, such as those that would establish the automatic IRA,  could represent a significant step toward increasing participation to over  50 percent within the current framework of a voluntary system. Further,  redesigning the Saver’s Credit could improve the retirement income and  savings imbalance between lower and higher earners by giving lower-  and middle-earning households an additional incentive to accumulate  more in their retirement accounts or to start saving for retirement. By  itself, increasing coverage through automatic IRAs will likely result in, at  best, moderate increases in retirement income. However, even these  increases could bolster the financial prospects of many future retirees.  These options do, of course, pose important trade-offs for individuals,  employers, and the government that will need to be carefully weighed.  Individuals, especially those in lower-income households, will still have to  make difficult choices between spending now and saving for later. In  addition, the government would forego tax revenue in the near-term  because contributions to automatic IRAs would be tax-deferred.  Moreover, the expansion of the Saver’s Credit would result in both a loss  of revenue and increased federal spending. Such costs will have to be  considered along with the proposals’ potential effects on labor force  participation and dependence on other government programs, such as  Social Security, in retirement.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Department of Labor and the  Department of the Treasury for review and comment. While neither  agency provided official comments, each provided technical comments,  which we incorporated as appropriate.
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section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: To analyze the extent to which workers with lower earnings can benefit  from tax incentives for retirement savings and automatic IRAs, we  examined (1) the earnings and tax rates of households that do not have  DC plans or IRAs, (2) the effects of the Saver’s Credit on retirement  income, and (3) how automatic IRAs could affect retirement income,  especially for low- and middle-income workers. This appendix and  appendix II provide a detailed account of the information and methods we  used to answer these objectives. Section 1 describes the key information  sources we used. Section 2 describes the empirical methods we used to  answer objective 1 and presents information on standard errors and  confidence intervals for our estimates.
subsections: section_title: Section 1: Information Sources
paragraphs: To answer our objectives, we obtained information from a variety of  sources including the Survey of Consumer Finances (SCF); the Policy  Simulation Group’s (PSG) microsimulation models; relevant literature;  interviews with a range of experts in the area of retirement security;  presidential and legislative proposals to modify the Saver’s Credit and  create automatic IRAs; and relevant federal laws and regulations.
To answer the first objective, we used data from the 2010 SCF to analyze  incomes and tax rates of households that did not take advantage of the  existing tax incentives for retirement savings. The SCF is a triennial,  nationally representative survey from the Board of Governors of the  Federal Reserve. The 2010 SCF surveyed 6,482 households about their  pensions, incomes, labor force participation, asset holdings and debts,  use of financial services, and demographic information. The SCF is  conducted using a dual-frame sample design. One part of the design is a  standard, multistage area-probability design, while the second part is a  special over-sample of relatively wealthy households. This is done in  order to accurately capture financial information about the population at  large as well as characteristics specific to the relatively wealthy. The two  parts of the sample are adjusted for sample nonresponse and combined  using weights to make estimates from the survey data representative of  households overall. In addition, the SCF excludes people included in the  Forbes Magazine list of the 400 wealthiest people in the United States.  Furthermore, the 2010 SCF dropped 10 observations from the public data  set that had net worth at least equal to the minimum level needed to  qualify for the Forbes list.
For the purposes of this report, a household refers to the primary  economic unit within a household, which the SCF refers to as a family. To  estimate the age, marital status, net worth, tax filing status, and whether  the household had a member with a DC or DB plan, we relied on variable  definitions used for Federal Reserve publications using the SCF. To  estimate AGI and tax rates, we used TAXSIM, an application provided by  the National Bureau of Economic Research that estimates tax information  for households using survey data. To prepare the data for TAXSIM, we  relied on a program provided by the Federal Reserve. We followed SCF  documentation and estimated the standard errors that incorporate both  implicates and replicate weighting. The estimated populations we used for  our analysis were derived with the first implicate.
The SCF and other surveys that are based on self-reported data are  subject to several other sources of nonsampling error, including the  inability to get information about all sample cases; difficulties of definition;  differences in the interpretation of questions; respondents’ inability or  unwillingness to provide correct information; and errors made in  collecting, recording, coding, and processing data. These nonsampling  errors can influence the accuracy of information presented in the report,  although the magnitude of their effect is not known.
subsections: section_title: PSG Microsimulation Models
paragraphs: To answer objectives 2 and 3, we used PSG’s SSASIM, GEMINI, and  PENSIM simulation models. GEMINI simulates Social Security benefits  and taxes for large representative samples of people born in the same  year. GEMINI simulates all types of Social Security benefits including  retired workers’, spouses’, survivors’, and disability benefits. It can be  used to model a variety of changes to Social Security. GEMINI uses  inputs from SSASIM, which has been used in numerous prior GAO  reports, and PENSIM, which was developed for the Department of Labor.  GEMINI relies on SSASIM for economic and demographic projections  and relies on PENSIM for simulated life histories of large representative   Life  samples of people born in the same year and their spouses.histories include educational attainment, labor force participation,  earnings, job mobility, marriage, disability, childbirth, retirement, and  death. Life histories are validated against data from the Survey of Income  and Program Participation, the Current Population Survey, Modeling  Income in the Near Term (MINT), and the Panel Study of Income  Dynamics. Additionally, any projected statistics (such as life expectancy,  employment patterns, and marital status at age 60) are, where possible,  consistent with intermediate cost projections from the Social Security  Administration’s Office of the Chief Actuary (OCACT). At their best, such  models can provide only very rough estimates of future incomes.  However, these estimates may be useful for comparing future incomes  across alternative policy scenarios and over time.
GEMINI can be operated as a free-standing model or it can operate as a  SSASIM add-on. When operating as an add-on, GEMINI is started  automatically by SSASIM for one of two purposes. GEMINI can enable  the SSASIM macro model to operate in the Overlapping Cohorts (OLC)  mode or it can enable the SSASIM micro model to operate in the  Representative Cohort Sample (RCS) mode. The SSASIM OLC mode  requests GEMINI to produce samples for each cohort born after 1934 in  order to build up aggregate payroll tax revenues and Old-Age, Survivors,  and Disability Insurance (OASDI) benefit expenditures for each calendar  year, which are used by SSASIM to calculate standard trust fund financial  statistics. In either mode, GEMINI operates with the same logic, but  typically with smaller cohort sample sizes in OLC mode than in the RCS  or stand-alone-model mode.
PENSIM simulates the timing for each life event by using data from  various longitudinal data sets to estimate a waiting-time model (often  called a hazard function model) using standard survival analysis methods.  PENSIM incorporates many such estimated waiting-time models into a  single dynamic simulation model. This model can be used to simulate a  synthetic sample of complete life histories. PENSIM employs continuous- time, discrete-event simulation techniques, such that life events do not  have to occur at discrete intervals, such as annually on a person’s  birthday. PENSIM also uses macro-demographic and macroeconomic  variables generated by SSASIM.
PENSIM imputes pension characteristics using a model estimated with  1996—1998 establishment data from the Bureau of Labor Statistics  Employee Benefits Survey (now known as the National Compensation  Survey). Pension offerings are calibrated to historical trends in pension  offerings from 1975 to 2005, including plan mix, types of plans, and  employer matching. Further, PENSIM incorporates data from the 1996– 1998 Employee Benefits Survey to impute access to and participation  rates in DC plans in which the employer makes no contribution, which the  Bureau of Labor Statistics does not report as pension plans in the  National Compensation Survey. The inclusion of these “zero-matching”  plans enhances PENSIM’s ability to accurately reflect the universe of  pension plans offered by employers. The baseline PENSIM assumption,  which we adopted in our analysis, is that 2005 pension offerings,  including the imputed zero-matching plans, are projected forward in time.  PENSIM also simulates federal income taxes.
PSG has conducted validation checks of PENSIM’s simulated life  histories against both historical life history statistics and other projections.  Different life history statistics have been validated against data from the  Survey of Income and Program Participation, the Current Population  Survey, MINT, the Panel Study of Income Dynamics, and the Social  Security Administration’s Trustees Report. PSG reports that PENSIM life  histories have produced similar annual population, taxable earnings, and  disability benefits for the years 2000 to 2080 as those produced by the  Congressional Budget Office’s long-term Social Security model and as  shown in the Social Security Administration’s 2004 Trustees Report.  According to PSG, PENSIM generates simulated DC plan participation  rates and account balances that are similar to those observed in a variety  of data sets. For example, measures of central tendency in the simulated  distribution of DC account balances among employed individuals are  similar to those produced by an analysis of the Employee Benefit  Research Institute-Investment Company Institute 401(k) database and of  the 2004 SCF. We performed no independent validation checks of  PENSIM’s life histories or pension characteristics.
In 2006, the Employee Benefits Security Administration (EBSA) submitted  PENSIM to a peer review by three economists. The economists’ overall  reviews ranged from highly favorable to highly critical. While the  economist who gave PENSIM a favorable review expressed a “high  degree of confidence” in the model, the one who criticized it focused on  PENSIM’s reduced form modeling. This means that the model is  grounded in previously observed statistical relationships among  individuals’ characteristics, circumstances, and behaviors, rather than on  any underlying theory of the determinants of behaviors, such as the  common economic theory that individuals make rational choices as their  preferences dictate and thereby maximize their own welfare. The reduced  form modeling approach is used in pension microsimulation models and  the feasibility of using a nonreduced form approach to build such a model  may be questionable given the current state of economic research. The  third economist raised questions about specific modeling assumptions  and possible overlooked indirect effects.
section_title: Data Reliability
paragraphs: We conducted a data reliability assessment of the PSG models and  selected variables from the SCF by conducting electronic data tests for  completeness and accuracy, reviewing documentation on the data set,  and interviewing knowledgeable officials about how the data are collected  and maintained and their appropriate uses. When we learned that  particular fields were not sufficiently reliable, we did not use them in our  analysis. For the purposes of our analysis, we found the variables that we  ultimately reported on to be sufficiently reliable.
section_title: Literature Review and Interviews
paragraphs: We conducted an extensive literature review and interviewed a range of  experts. To identify existing studies, we conducted searches of various  databases, such as ECO, ArticleFirst, WorldCat, Social SciSearch,  Harvard Business Review, EconLit, ProQuest, PolicyFile and CQ.com.  From these sources, we reviewed article abstracts, when available, to  determine which articles contained information germane to our report and  reviewed those articles. In addition, we collected articles posted on the  websites of organizations such as Brookings, the Heritage Foundation,  and AARP. We performed these searches and identified articles from  June 2012 through October 2012.
We also interviewed experts. To ensure we obtained a balanced  perspective, we interviewed experts with a range of perspectives and  from different types of organizations including government, research  organizations, advocacy groups, and the private sector. We also  conducted interviews with several experts in government and the private  sector on technical issues related to our analysis. Specifically, we  interviewed agency officials at the departments of the Treasury and  Labor; researchers from the Urban Institute, the Heritage Foundation, and  the Economic Policy Institute; experts and advocates from the Pension  Rights Center, Demos, Aspen Institute, American Society of Pension  Professionals and Actuaries, and AARP; and private sector professionals  from PAi, Prudential Financial, Inc., and Putnam Investments. We  consulted with officials at the Social Security Administration (SSA) and an  expert from the PSG on technical issues.
section_title: Section 2: Analysis of Incomes and Tax Rates of Households That Do Not Take Advantage of Incentives to Save for Retirement
subsections: section_title: Methodology
paragraphs: To analyze the earnings and tax rates of households that do not take  advantage of the tax incentives for retirement saving, we used the 2010  SCF. We limited our sample to households where the household head  was under age 65 and either the respondent or spouse worked in the  private sector. Our estimates for households only include retirement  benefits and savings of the survey respondent and a spouse or partner  and do not include retirement benefits or savings held by additional family  members. As a result, our estimates may understate retirement assets  held by a household. We estimated whether the household had a DB  plan, and AGI and marginal tax rates for households with and without DC  plans or IRAs. We also estimated net worth using variable definitions  outlined by the Federal Reserve. We estimated AGI and marginal tax  rates by inputting the SCF data into the National Bureau of Economic  Research’s (NBER) TAXSIM Model, a microsimulation model of U.S.   TAXSIM calculates estimated  federal and state income tax systems.liabilities under U.S. federal and state income tax laws from actual tax  returns that have been prepared for public use by the Statistics of Income  Division of the IRS.
section_title: Confidence Intervals for Our Estimates
paragraphs: The SCF is a probability sample based on random selection, so the 2010  SCF sample is only one of a large number of samples that might have  been drawn. Since each sample could have provided different estimates,  we express our confidence in the precision of our particular sample’s  results as a 95 percent confidence interval (e.g., plus or minus 4  percentage points). This is the interval that would contain the actual  population value for 95 percent of the samples we could have drawn. As  a result, we are 95 percent confident that each of the confidence intervals  in this report will include the true values in the study population. Tables 2  through 6 show the confidence intervals for our estimates of AGI,  marginal tax rates, and retirement plan ownership.
section_title: Appendix II: Sensitivity Analysis and Summary Statistics for Saver’s Credit and Automatic IRA Modeling Scenarios
paragraphs: This appendix describes the modeling scenarios and assumptions for  objectives 2 and 3. It also presents the results from our sensitivity  analyses and describes cohort summary statistics resulting from our  simulations.
subsections: section_title: Modeling Scenarios and Assumptions
paragraphs: To analyze the effects of the Saver’s Credit and automatic IRAs on  retirement income, we used the PSG models. We started with a 2 percent  sample of a 1995 cohort, totaling 118,142 people at birth. We projected  income in retirement when the cohort is age 67.
Our simulations included some of the following key assumptions and  features:  Individuals who died before they retire, died before age 67, retire after  age 67, immigrated into the cohort at an age older than 25, emigrated  before age 67, or became permanently disabled before age 62 were  omitted from the sample. We did not include individuals who became  permanently disabled before age 62 because we could not account  for missed career growth and opportunities to participate in employer- sponsored pension plans.
Retirement occurred as early as age 62.
Anyone who became disabled at age 62 or older was considered  retired.
Workers could be covered by DB plans. We relied on PENSIM’s  defaults to determine DB plan coverage and benefit amounts.
Rates of return were fixed. The annual nonstochastic nominal rate of  return was 9.2 percent for stocks and 5.7 percent for government  bonds. Using different rates of return would result in different effects  on DC and automatic IRA account balances at retirement and, as a  result, the size of the household’s retirement annuity. Also, because  our projections did not stochastically model stock returns, assuming a  rate of return on assets equal to the historical return on stocks did not  capture the risks associated with stock returns. Further, the nominal   rate of return for stocks is based in part on a long-term equity risk  premium calculated in 2000.
PENSIM assigned each individual one of four “lifetime asset allocation  styles.” DC assets were invested according to the individual’s asset  allocation style. These styles included (1) all assets are invested in a  diversified-equity fund, (2) all assets are invested in a government  bond fund, (3) 15 percent of assets are invested in a collection of  individuals stocks and the remaining 85 percent are invested in an  age-specific mixture of a diversified-equity fund and a government- bond fund, and (4) 15 percent of assets are invested in a collection of  individual stocks and the remaining 85 percent are invested in a  target-date fund.
Account fees for investment funds were 75 basis points for target-date  funds; 100 basis points for diversified-equity funds; 45 basis points for  money-market funds, equity-index, and government bond funds; and  0 basis points for stable-value and guaranteed-return funds. We  considered these account fees to be our “standard fees” scenario.
When workers change jobs, they either roll over their DC account  balances or cash them out. Whether workers roll over their DC  account balances or cash them out depends on the relative size of  their account balances. We relied on PENSIM’s defaults to determine  whether workers rolled over their account balances. PENSIM does not  allow for hardship withdrawals. Workers accumulated DC and IRA  savings from past jobs in one rollover account, which continued to  receive investment returns. At retirement, benefits were consolidated  into one account.
Workers used their entire DC account balance at retirement to  purchase a single-life annuity at retirement that was not adjusted for  inflation. DB benefits were also provided in the form of an annuity. DB  and DC annuities were combined into one retirement annuity.
Annuity prices were based on projected mortality rates for the 1995  birth cohort and on loading factors that ensured that the cost of  providing annuities in PENSIM equaled the revenue generated by  selling them at those prices. We assume that the annuity provider had  no administrative or marketing costs, no costs in acquiring the capital  it needs to hold in reserve, and earns no profits.
Eligible individuals received Social Security benefits in retirement.
According to 2012 projections of the Social Security Trustees for the  next 75 years (2012-2087), revenues will not be adequate to pay full  benefits as defined by the current benefit formula. Therefore,  estimating future Social Security benefits should reflect that actuarial  deficit and account for the fact that some combination of benefit  reductions and revenue increases will be necessary to restore long- term solvency. Our tax-increase-only benchmark simulated “promised  benefits,” or those benefits promised by the current benefit formula.  We also developed an alternative benefit-reduction-only benchmark  which simulated “funded benefits,” or those benefits for which  currently scheduled revenues are projected to be sufficient (see  Sensitivity Analysis below). Our tax-increase-only benchmark raised  payroll taxes once and immediately by the amount of Social Security’s  actuarial deficit as a percentage of payroll. It resulted in the smallest  ultimate tax rate of those we considered and spread the tax burden  most evenly across generations; this was the primary basis for our  selection. The later that taxes are increased, the higher the ultimate  tax rate needed to achieve solvency, and, in turn, the higher the tax  burden on later taxpayers and lower on earlier taxpayers. Still, any  policy scenario that achieves 75-year solvency only by increasing  revenues would have the same effect on the adequacy of future  benefits in that promised benefits would not be reduced.  Nevertheless, alternative approaches to increasing revenues could  have very different effects on individual equity. All estimates related to  this benchmark were simulated using the SSASIM OLC mode.  Starting in 2013, we increased the tax rate by 2.61 percent in order to  achieve 75-year solvency. As reported in the Social Security  Administration’s 2012 Trustees Report, immediately raising taxes by  2.61 percent would achieve solvency.
In our policy scenarios, we varied other assumptions to see how these  variations affect retirement income at age 67. We did not account for any  behavioral responses that changes in policy may have created. In reality,  some individuals may choose to contribute more to their pension plans or  may choose to start saving in a pension plan or IRA in response to policy  changes. Policy scenarios we analyzed include:
No Saver’s Credit. In addition to the assumptions described above,  this scenario assumed no Saver’s Credit’s was available. This  scenario served as the baseline against which we compared the  results for the existing and refundable Saver’s Credit scenarios.
Existing Saver’s Credit. This scenario was drawn from the existing  design of the Saver’s Credit as established by the Economic Growth  and Tax Relief Reconciliation Act of 2001. Under the credit’s current  design, taxpayers may receive a non-refundable credit of up to $1,000  ($2,000 if married filing jointly) for contributing to a pension plan or  IRA. The credit amount is equal to the credit rate multiplied by the  amount of qualified contribution (of up to $2,000 per individual).  Taxpayers receive a credit rate of 50, 20, or 10 percent depending on  AGI and filing status. Certain students, individuals under age 18, and  those who are claimed as a dependent on another taxpayer’s return  are not eligible to receive the credit. If a worker receives a pre- retirement distribution from a pension plan, any credit received in that  year and the subsequent two years will be reduced by the amount of  the distribution. We used information from the Internal Revenue  Service to determine current AGI limits. 2013 AGI limits are: $59,000  for individuals with a filing status of married filing jointly, $44,250 for  individuals with a filing status of head of household, and $29,500 for  individuals with a filing status of single, married filing separately, or  widow(er). Limits in subsequent years were indexed to inflation.  PENSIM assumed the credit was deposited directly into the taxpayer’s  DC account. This is not a requirement under law, and in reality the  credit would be part of the household’s tax refund. We assumed a 100  percent utilization rate, meaning that all eligible taxpayers received  the credit, to show the maximum potential accumulation for retirement  income from the Saver’s Credit. This utilization rate also reflects  PENSIM’s default values for 2012 and beyond. We did not assess  behavioral responses related to the utilization of the Saver’s Credit.
Refundable Saver’s Credit. This scenario had the same eligibility  requirements and 2013 AGI limits as the existing Saver’s Credit  scenario. Starting in 2014, the following changes were implemented,  drawn from our understanding of modifications included in the  President’s budget proposal of fiscal year 2011: (1) the credit became  fully refundable, (2) all taxpayers received a 50 percent credit rate  (there is no phase-out), and (3) AGI limits were increased. The 2014  AGI limits were: $85,000 for individuals with a filing status of married  filing jointly, $63,750 for individuals with a filing status of head of  household, and $42,500 for individuals with a filing status of single,  married filing separately, or widow(er). Limits in subsequent years  were indexed to inflation. Individuals could receive a refundable credit  of up to $1,000 if filing singly or $2,000 if filing jointly. PENSIM  assumed that the credit is deposited directly into the taxpayer’s DC  account. This change was not proposed in the President’s budget. We  assumed a 100 percent utilization rate, meaning that all eligible  taxpayers claimed the credit, to show the maximum potential  accumulation for retirement income from the Saver’s Credit. We did  not assess behavioral responses related to the utilization of the  Saver’s Credit.
Automatic IRAs. This scenario is drawn from our understanding of  H.R. 4049 The Automatic IRA Act of 2012. For our scenario, we  assumed that private sector employers began offering automatic IRAs  in 2014. Employers who employed more than 10 employees and did  not offer a DB or DC plan were required to offer automatic IRAs to  employee ages 18 and over after they have been employed for 90  days. Contributions were made to traditional IRAs. If the employee  did not select a contribution rate or investment fund, 3 percent of the  employee’s salary was contributed to a target-date fund. The  aggregate participation rate is centered around a target participation  rate of 69 percent in the year 2035, when the cohort was age 40 and  in the midst of its prime working years. We selected this rate by  estimating a hypothetical average participation rate using parameters  from economic literature and SCF data on households that did not  currently participate in a DC or IRA plan. Our model considered the  effects of automatic enrollment in 401(k) plans, the effects of an  employer match (or a lack there-of), income, and age. Individuals may  choose to terminate their participation in the automatic IRA after being  enrolled in the plan. The Saver’s Credit provisions matched the  Existing Saver’s Credit scenario described above. We assumed that  the utilization rate for the credit was 100 percent to model the full  savings potential of the credit.
Automatic IRAs and a refundable Saver’s Credit. In addition to  modeling automatic IRAs as described above, we modeled the  Saver’s Credit with the same provisions as in the Refundable Saver’s  Credit scenario, also described above. The refundable Saver’s Credit  was fully refundable, there was no credit rate phase-out, and AGI  limits were extended starting in 2014. Individuals could receive a  refundable credit of up to $1,000 if filing singly or $2,000 if filing jointly.
We assumed that the utilization rate for the refundable Saver’s Credit  was 100 percent.
section_title: Sensitivity Analysis
subsections: section_title: Results Using Means
paragraphs: Figures 10 through 13 show the results of our modeling scenarios  presenting means instead of medians. In general, for dollar changes, the  means were higher than the medians.
In addition, we modeled alternative scenarios to examine how sensitive  our results were to our assumptions. Specifically, we ran the PSG models  using the following alternative assumptions:
Alternative assumptions for investment account fees. Should  investment account fees be higher than those in our standard fees  assumption, we established a “high fees” assumption. Account fees  for target-date funds were 200 basis points; account fees for  diversified-equity funds were 225 basis points; account fees for  money-market funds, equity-index, and government bond funds  remained at 45 basis points; and account fees for stable-value and  guaranteed-return funds remained at 0 basis points.
Alternative assumptions for Social Security benefits. Our benefit- reduction-only benchmark simulated “funded benefits,” or those  benefits for which currently scheduled revenues are projected to be  sufficient. Under this scenario, the benefit reduction did not begin until  2018 to give workers and Social Security beneficiaries time to prepare  for the reduction. In 2018, benefits were reduced by 18.2 percent for  new and existing beneficiaries. SSA actuaries scored this benchmark  and determined it would achieve 75-year solvency.
Alternative assumptions for Saver’s Credit utilization rate.
Research on Saver’s Credit utilization rate for the first couple of years  it was available indicates that between 60-67 percent of eligible  taxpayers claimed the credit. We modeled a utilization rate of 60  percent to reflect the lower bound of this range. This scenario  demonstrates the effects of the Saver’s Credit if utilization is as low as  the initial rate at which taxpayers claimed the credit.
Alternative assumptions for automatic IRA participation rate. We  modeled an aggregate automatic IRA participation rate of 48 percent  to demonstrate the effects of automatic IRAs should overall  participation be lower than expected. This alternative participation rate  is similar to one study’s estimate for the participation rate for new  employees in retirement plans where participation is voluntary.
The results for all of our modeling scenarios, including those using our  alternative assumptions, are presented in tables 7 through 11 below.
Lifetime summary statistics of the simulated 1995 cohort’s workforce and  demographic variables give some insight into the PSG model’s  projections of income in retirement in our report (see tables 12 and 13).
By restricting the sample to retirees who do not immigrate into the cohort  after age 25, do not emigrate or die before age 67, and do not become  permanently disabled before age 62, we reduce the full sample of  118,142 individuals to a sample of 60,813 individuals.
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Michael Collins, Assistant  Director; Andrea Dawson, Jennifer Gregory, and Amrita Sen made key  contributions. Also contributing to this report were Alicia Atkinson,  Benjamin Bolitzer, Alicia Cackley, Colleen Candrl, David Chrisinger,  Laura Henry, Sharon Hermes, Gene Kuehneman, Kathy Leslie, Thomas  McCool, Mimi Nguyen, Marylynn Sergent, Kenneth Stockbridge, Nyree  Ryder Tee, Roger Thomas, Frank Todisco, and Walter Vance.