Private Pensions and Public Policies

by Gale, William G.; Shoven, John B.; Warshawsky, Mark J.

• ISBN13: 9780815702382
• ISBN10: 0815702388
• Format: Hardcover
• Copyright: 2004-04-21
• Publisher: Brookings Institution Press

Summary

The private pension system, together with Social Security, has provided millions of Americans with income security in retirement. But over the past thirty years, pension coverage has stagnated, leaving behind some vulnerable groups. Defined contribution plans have exposed workers to greater investment risk, while cash balance and other hybrid plans may have adverse effects on older workers caught in the transition.Pension regulations, infamous for their complexity, can be bewildering to policy analysts and policymakers. Private Pensions and Public Policies sheds timely and much-needed light on specific issues within the broader context and framework of pension reform. Contributors focus on topics that must be addressed in any reform effort, including the effects of the shift in emphasis toward defined contribution plans (after the 1974 Employee Retirement Income and Security Act) and hybrid plans (from the 1990s); regulatory issues such as nondiscrimination rules and contribution limits; how to increase the information available to participants and improve financial education; how participants in defined contribution plans make choices on questions such as asset allocation, back-loaded versus front-loaded saving, and annuities versus lump sum distributions; and the interaction of the private pension system with Social Security.Contributors include Robert L. Clark (North Carolina State University), Sylvester J. Schieber (Watson Wyatt Worldwide), Richard A. Ippolito (George Mason University School of Law), Alan L. Gustman (Dartmouth College), Thomas L. Steinmeier (Texas Tech University), John Karl Scholz (University of Wisconsin), Dean M. Maki, (JPMorgan Chase), William Even (Miami University of Ohio), Jagadeesh Gokhale (American Enterprise Institute), Laurence J. Kotlikoff (Boston University), Mark J. Warshawsky (TIAA-CREF Institute), Annika Sunden (Boston College), Andrew A. Samwick (Dartmouth College), David A. Wise (Harvard University), Joel Dickson (The Vanguard Group), Peter Merrill (PriceWaterhouseCoopers), Kent Smetters (Wharton School), Yuewu Xu (TIAA-CREF Institute), Janemarie Mulvey (Watson Wyatt Worldwide), Peter Orszag (Sebago Associates, Inc.), James M. Poterba (Massachusetts Institute of Technology), John B. Shoven (Stanford University), Clemens Sialm (University of Michigan), Leslie E. Papke (Michigan State University), Jeffrey R. Brown (Harvard University), and Michael Hurd (RAND Corporation).

Author Biography

Jeffrey R. Brown, Harvard University Robert L. Clark, North Carolina State University Joel M. Dickson, The Vanguard Group William Even, Miami University of Ohio William G. Gale, Brookings Institution Jagadeesh Gokhale, American Enterprise Institute Alan L. Gustman, Dartmouth College Michael D. Hurd, RAND Richard A. Ippolito, George Mason University School of Law Laurence J. Kotlikoff, Boston University Dean M. Maki, JPMorgan Chase Peter R. Merrill, PricewaterhouseCoopers Janemarie Mulvey, Watson Wyatt Worldwide Peter R. Orszag, Brookings Institution Leslie E. Papke, Michigan State University James M. Poterba, Massachusetts Institute of Technology Andrew A. Samwick, Dartmouth College Sylvester J. Schieber, Watson Wyatt and Company John Karl Scholz, University of Wisconsin John B. Shoven, Stanford University Clemens Sialm, University of Michigan Kent Smetters, Wharton School, University of Pennsylvania Thomas L. Steinmeier, Texas Tech University Annika Sunden, Boston College Mark J. Warshawsky, TIAA-CREF Institute David A. Wise, Harvard University Yuewa Xu, TIAA-CREF Institute

Table of Contents

Foreword	vii
1 Introduction	1	(10)
WILLIAM G. GALE, JOHN B. SHOVEN, AND MARK J. WARSHAWSKY
2 The Transition to Hybrid Pension Plans in the United States: An Empirical Analysis	11	(46)
ROBERT L. CLARK AND SYLVESTER J. SCHIEBER
Comment by Richard A. Ippolito	43	(14)
3 What People Don't Know about Their Pensions and Social Security	57	(69)
ALAN L. GUSTMAN AND THOMAS L. STEINMEIER
Comment by John Karl Scholz	120	(6)
4 Financial Education and Private Pensions	126	(20)
DEAN M. MAKI
Comment by William Even	140	(6)
5 Life-Cycle Saving, Limits on Contributions to IBC Pension Plans, and Lifetime Tax Benefits	146	(43)
JAGADEESH GOKHALE, LAURENCE J. KOTLIKOFF, AND MARK J. WARSHAWSKY
Comment by Annika Sundén	183	(6)
6 The Effects of Social Security Reform on Private Pensions	189	(32)
ANDREW A. SAMWICK
Comment by David A. Wise	214	(7)
7 Pension Choices with Uncertain Tax Policy	221	(16)
JOEL M. DICKSON
Comment by Peter R. Merrill	232	(5)
8 The Design and Cost of Pension Guarantees	237	(22)
KENT SMETTERS
Comment by Yuewu Xu	255	(4)
9 Effects of Nondiscrimination Rules on Pension Participation	259	(31)
ROBERT L. CLARK, JANEMARIE MULVEY, AND SYLVESTER J. SCHIEBER
Comment by Peter R. Orszag	280	(10)
10 Asset Location for Retirement Savers	290	(42)
JAMES M. POTERBA, JOHN B. SHOVEN, AND CLEMENS SIALM
Comment by Leslie E. Papke	326	(6)
11 Longevity-Insured Retirement Distributions from Pension Plans: Market and Regulatory Issues	332	(51)
JEFFREY R. BROWN AND MARK J. WARSHAWSKY
Comment by Michael D. Hurd	370	(13)
Glossary	383	(10)
Contributors	393	(2)
Acknowledgments	395	(2)
Index	397