What To Expect Under Personal What To Expect Under Personal Reemployment Accounts (PRAs): Reemployment Accounts (PRAs):

Predictions and ProceduresPredictions and Procedures

Presenter: Irma Perez-JohnsonPresenter: Irma Perez-Johnson

USDOL Workforce Innovations ConferenceUSDOL Workforce Innovations ConferencePhiladelphia, PA – July 11-13, 2005Philadelphia, PA – July 11-13, 2005

Key Elements of PRA Programs

Targeted at UI recipients likely to exhaust their Targeted at UI recipients likely to exhaust their benefitsbenefits

Contain up to $3,000; amount set by statesContain up to $3,000; amount set by states

As voucher, can be used to pay for range of intensive, As voucher, can be used to pay for range of intensive, training, and supportive servicestraining, and supportive services

Bonus eligibility based on reemployment within 13 Bonus eligibility based on reemployment within 13 weeks of UI receipt and 6-month retentionweeks of UI receipt and 6-month retention

Bonus paid in 2 installments; amount based on Bonus paid in 2 installments; amount based on unspent PRA fundsunspent PRA funds

Key Questions Addressed

What are the predicted impacts of the PRA What are the predicted impacts of the PRA reemployment bonus?reemployment bonus?

What are likely customer responses to the bonus What are likely customer responses to the bonus and voucher components of PRAs?and voucher components of PRAs?

What challenges may states and local areas What challenges may states and local areas encounter in implementing PRAs?encounter in implementing PRAs?

What resources exist to support, facilitate PRA What resources exist to support, facilitate PRA implementation?implementation?

Information Sources

Reemployment bonus demonstrationsReemployment bonus demonstrations

Evaluation of the ITA ExperimentEvaluation of the ITA Experiment

Research on Worker Profiling and Research on Worker Profiling and Reemployment Services (WPRS)Reemployment Services (WPRS)

Research on UI populationResearch on UI population

Predicted PRA Bonus Impacts

Bonus receipt rates expected to vary by PRA amountBonus receipt rates expected to vary by PRA amount– $3,000 PRA $3,000 PRA 31 - 33% bonus receipt rate 31 - 33% bonus receipt rate– $1,000 PRA $1,000 PRA 20 - 29% bonus receipt rate 20 - 29% bonus receipt rate

UI impacts also expected to vary by PRA amountUI impacts also expected to vary by PRA amount– $3,000 PRA $3,000 PRA – 1.66 weeks per PRA recipient – 1.66 weeks per PRA recipient– $1,000 PRA $1,000 PRA – 1.09 weeks per PRA recipient – 1.09 weeks per PRA recipient

Predicted PRA impacts larger than in prior demonstrationsPredicted PRA impacts larger than in prior demonstrations– PRA bonuses more generousPRA bonuses more generous– First PRA bonus installment paid immediatelyFirst PRA bonus installment paid immediately

Impacts on aggregate UI payments could be greater at Impacts on aggregate UI payments could be greater at lower PRA amountslower PRA amounts– $3,000 $3,000 –1.66 weeks per PRA recipient –1.66 weeks per PRA recipient– $1,000 $1,000 –1.09 weeks per PRA recipient, but 3 times –1.09 weeks per PRA recipient, but 3 times

the number of PRA recipients (–3.27 weeksthe number of PRA recipients (–3.27 weeks))

Other Considerations in Setting PRA Amount

Tradeoff between PRA amount and number Tradeoff between PRA amount and number of offersof offers

Tension between bonus and service Tension between bonus and service voucher features of PRAsvoucher features of PRAs

Variation by local areasVariation by local areas

Likely Customer Responses

Expect PRA customers to attempt to qualify for bonus Expect PRA customers to attempt to qualify for bonus firstfirst

PRA customers unlikely to purchase substantial PRA customers unlikely to purchase substantial counseling assistancecounseling assistance

Customers interested in training likely to purchase itCustomers interested in training likely to purchase it

Extent of PRA use for support service purchases is Extent of PRA use for support service purchases is unknownunknown

Expect PRA expenditures close to award amountExpect PRA expenditures close to award amount

Key Challenges in PRA Implementation

PRA concept is newPRA concept is new

Uneven experience and awareness of Uneven experience and awareness of resourcesresources

Desire to keep procedures simpleDesire to keep procedures simple

Requires coordination across distinct Requires coordination across distinct workforce development functionsworkforce development functions

Building Blocks Exist to Support, Facilitate PRA Implementation

PRA ProgramPRA ProgramFunctionsFunctions

One-Stop One-Stop EquivalentEquivalent

Identify and call-in PRA Identify and call-in PRA eligibleseligibles

Identify and call-in WPRS Identify and call-in WPRS eligibleseligibles

Review and approve Review and approve bonus claimsbonus claims

None but done under prior None but done under prior bonus demonstrationsbonus demonstrations

Review and approve PRA Review and approve PRA expenditure requestsexpenditure requests

Review and approve ITA Review and approve ITA expenditure requestsexpenditure requests

Process payments and Process payments and track PRA balancestrack PRA balances

Process payments and Process payments and track ITA balancestrack ITA balances

PRA Demonstration

Seven states (FL, ID, MN, MS, MT, TX, WV)Seven states (FL, ID, MN, MS, MT, TX, WV)

Two-year implementation periodTwo-year implementation period

Programs launched in spring 2005Programs launched in spring 2005

Expect about 2,200 total PRA recipientsExpect about 2,200 total PRA recipients

PRA award set at $3,000 by all statesPRA award set at $3,000 by all states

Evaluation of PRA Demonstration

Examine implementation processExamine implementation process

Identify successful strategies and likely Identify successful strategies and likely replication challengesreplication challenges

Examine patterns in acceptance and use of Examine patterns in acceptance and use of PRA fundsPRA funds

Describe UI, employment, and retention Describe UI, employment, and retention outcomes for PRA recipientsoutcomes for PRA recipients