Robert L. Clark and Olivia S. Mitchell (eds)
- Published in print:
- 2010
- Published Online:
- September 2010
- ISBN:
- 9780199592609
- eISBN:
- 9780191594618
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199592609.001.0001
- Subject:
- Business and Management, Pensions and Pension Management
Retirement risk management must be dramatically overhauled if workers and retirees are to better prepare themselves to meet future retirement challenges. Recent economic events including the global ...
More
Retirement risk management must be dramatically overhauled if workers and retirees are to better prepare themselves to meet future retirement challenges. Recent economic events including the global financial crisis have upended expectations about what pension and endowment fund managers can do. Employers and employees have found it difficult to make pension contributions, despite drops in retirement plan funding. In many countries, government social security systems are also facing insolvency. These factors, coupled with an aging population and rising longevity, are giving rise to serious questions about the future of retirement in America and around the world. This volume explores how workers and firms can reassess the risks associated with retirement saving and dissaving, to identify creative adjustments to adapt to these new risks and realities. One area explored is the key role for financial literacy and education programs. In addition, those acting as plan sponsors and fiduciaries must reconsider pension design to help them better address the new realities. Also novel financial products are described that can help retirement plan financing innovate. Experts provide new research and offer policy recommendations, illustrating how retirement plans can be amended to better meet the retirement needs of workers and firms. This volume will be a welcome addition to the libraries of everyone focused on retirement security.Less
Retirement risk management must be dramatically overhauled if workers and retirees are to better prepare themselves to meet future retirement challenges. Recent economic events including the global financial crisis have upended expectations about what pension and endowment fund managers can do. Employers and employees have found it difficult to make pension contributions, despite drops in retirement plan funding. In many countries, government social security systems are also facing insolvency. These factors, coupled with an aging population and rising longevity, are giving rise to serious questions about the future of retirement in America and around the world. This volume explores how workers and firms can reassess the risks associated with retirement saving and dissaving, to identify creative adjustments to adapt to these new risks and realities. One area explored is the key role for financial literacy and education programs. In addition, those acting as plan sponsors and fiduciaries must reconsider pension design to help them better address the new realities. Also novel financial products are described that can help retirement plan financing innovate. Experts provide new research and offer policy recommendations, illustrating how retirement plans can be amended to better meet the retirement needs of workers and firms. This volume will be a welcome addition to the libraries of everyone focused on retirement security.
David Blitzstein, Olivia S. Mitchell, and Stephen P. Utkus (eds)
- Published in print:
- 2006
- Published Online:
- September 2006
- ISBN:
- 9780199204656
- eISBN:
- 9780191603822
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199204659.001.0001
- Subject:
- Economics and Finance, Financial Economics
This book posits that retirement security is the central policy concern of our time. A generation of ‘Baby Boomers’ is on the verge of retirement, yet pension systems confront crushing challenges, ...
More
This book posits that retirement security is the central policy concern of our time. A generation of ‘Baby Boomers’ is on the verge of retirement, yet pension systems confront crushing challenges, and governments often appear confused about which direction they should move in. The book addresses the question: ‘What are the new risks and rewards in pensions, and what paths can stakeholders chose to solve these problems?’ In doing so, it explores three aspects of the evolution of risk and reward-sharing in retirement in order to offer guidance to pension fiduciaries, plan participants, and policymakers. First, it focuses on new perspectives for assessing retirement risks and rewards. Second, it evaluates efforts to insure retirement plans. Lastly, it provides several new strategies for managing retirement system risk.Less
This book posits that retirement security is the central policy concern of our time. A generation of ‘Baby Boomers’ is on the verge of retirement, yet pension systems confront crushing challenges, and governments often appear confused about which direction they should move in. The book addresses the question: ‘What are the new risks and rewards in pensions, and what paths can stakeholders chose to solve these problems?’ In doing so, it explores three aspects of the evolution of risk and reward-sharing in retirement in order to offer guidance to pension fiduciaries, plan participants, and policymakers. First, it focuses on new perspectives for assessing retirement risks and rewards. Second, it evaluates efforts to insure retirement plans. Lastly, it provides several new strategies for managing retirement system risk.
Toni Hustead
- Published in print:
- 2009
- Published Online:
- February 2010
- ISBN:
- 9780199573349
- eISBN:
- 9780191721946
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199573349.003.0008
- Subject:
- Business and Management, Public Management, Pensions and Pension Management
Most US federal retirement plans are now fully funded, but since plan assets must legally be invested in federal securities, fund surpluses are used to reduce overall federal budget deficits. As a ...
More
Most US federal retirement plans are now fully funded, but since plan assets must legally be invested in federal securities, fund surpluses are used to reduce overall federal budget deficits. As a result, current taxpayers are not charged with the cost of future federal retirement obligations. Nevertheless, federal rules do require the employing federal agency to budget for current personnel’s accruing liability of retirement promises. Therefore, policy decisions regarding the number of federal civilian and military personnel and the design of their retirement benefits may be made with a better understanding of the costs.Less
Most US federal retirement plans are now fully funded, but since plan assets must legally be invested in federal securities, fund surpluses are used to reduce overall federal budget deficits. As a result, current taxpayers are not charged with the cost of future federal retirement obligations. Nevertheless, federal rules do require the employing federal agency to budget for current personnel’s accruing liability of retirement promises. Therefore, policy decisions regarding the number of federal civilian and military personnel and the design of their retirement benefits may be made with a better understanding of the costs.
P. Brett Hammond and David P. Richardson
- Published in print:
- 2010
- Published Online:
- September 2010
- ISBN:
- 9780199592609
- eISBN:
- 9780191594618
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199592609.003.0002
- Subject:
- Business and Management, Pensions and Pension Management
This chapter uses a concept dubbed the asset/salary ratio (ASR) to examine factors that boost the chances that defined contribution plan participants will have sufficient assets to generate adequate ...
More
This chapter uses a concept dubbed the asset/salary ratio (ASR) to examine factors that boost the chances that defined contribution plan participants will have sufficient assets to generate adequate retirement income. The authors show that, for a sample of higher‐education participants, assets are (on average) consistent with at least a 70 percent income replacement rate. Key factors predictive of success are an adequate contribution rate and long tenure in the system; having a portfolio weighted to equities is also beneficial but to a lesser extent.Less
This chapter uses a concept dubbed the asset/salary ratio (ASR) to examine factors that boost the chances that defined contribution plan participants will have sufficient assets to generate adequate retirement income. The authors show that, for a sample of higher‐education participants, assets are (on average) consistent with at least a 70 percent income replacement rate. Key factors predictive of success are an adequate contribution rate and long tenure in the system; having a portfolio weighted to equities is also beneficial but to a lesser extent.
David Blitzstein, Olivia S. Mitchell, and Stephen P. Utkus
- Published in print:
- 2006
- Published Online:
- September 2006
- ISBN:
- 9780199204656
- eISBN:
- 9780191603822
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199204659.003.0001
- Subject:
- Economics and Finance, Financial Economics
An aging-population tsunami is sweeping the world, and capital markets have buffeted pension plans while retiree healthcare care costs rise without letup. This coincidence of shocks marks a crucial ...
More
An aging-population tsunami is sweeping the world, and capital markets have buffeted pension plans while retiree healthcare care costs rise without letup. This coincidence of shocks marks a crucial moment for global retirement security, since public and private retirement systems everywhere have fared poorly just as the massive Baby Boom generation moves into retirement. Clearly, urgent efforts are needed to enhance risk management for public and private pension systems around the world. This book explores three aspects of the evolution of risk and reward-sharing in retirement to offer guidance to pension fiduciaries, plan participants, and policymakers. First, it focuses on new perspectives for assessing retirement risks and rewards. Second, it evaluates efforts to insure retirement plans. Lastly, it provides several new strategies for managing retirement system risk. This chapter previews the remarkable findings by contributors to this volume.Less
An aging-population tsunami is sweeping the world, and capital markets have buffeted pension plans while retiree healthcare care costs rise without letup. This coincidence of shocks marks a crucial moment for global retirement security, since public and private retirement systems everywhere have fared poorly just as the massive Baby Boom generation moves into retirement. Clearly, urgent efforts are needed to enhance risk management for public and private pension systems around the world. This book explores three aspects of the evolution of risk and reward-sharing in retirement to offer guidance to pension fiduciaries, plan participants, and policymakers. First, it focuses on new perspectives for assessing retirement risks and rewards. Second, it evaluates efforts to insure retirement plans. Lastly, it provides several new strategies for managing retirement system risk. This chapter previews the remarkable findings by contributors to this volume.
Olivia S. Mitchell and Kent Smetters
- Published in print:
- 2003
- Published Online:
- August 2004
- ISBN:
- 9780199266913
- eISBN:
- 9780191601323
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199266913.003.0001
- Subject:
- Economics and Finance, Financial Economics
This chapter discusses developments in managing risks in retirement plans. It begins with a brief analysis on why traditional defined benefit pension plans are being abandoned for defined ...
More
This chapter discusses developments in managing risks in retirement plans. It begins with a brief analysis on why traditional defined benefit pension plans are being abandoned for defined contribution plans. It identifies key risks affecting both types of plans, and how these can be managed. An overview of the studies included in this volume is then presented.Less
This chapter discusses developments in managing risks in retirement plans. It begins with a brief analysis on why traditional defined benefit pension plans are being abandoned for defined contribution plans. It identifies key risks affecting both types of plans, and how these can be managed. An overview of the studies included in this volume is then presented.
Mark J. Warshawsky, Neal McCall, and John D. Worth
- Published in print:
- 2006
- Published Online:
- September 2006
- ISBN:
- 9780199204656
- eISBN:
- 9780191603822
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199204659.003.0005
- Subject:
- Economics and Finance, Financial Economics
Recent financial market and plan termination experiences have exposed the shortcomings of existing funding, disclosure, and premium rules governing private single-employer defined benefit pension ...
More
Recent financial market and plan termination experiences have exposed the shortcomings of existing funding, disclosure, and premium rules governing private single-employer defined benefit pension plans in the United States. These rules were designed to provide predictability for plan sponsors and administrators by insulating pension plans from the realities of economic and financial market fluctuations. Unfortunately, current practice often overlooks key financial principles that arguably should inform a responsible set of pension rules and the insurance system backing the plans. This chapter outlines the key characteristics of pension plans needed to beneficially guide rule-making and offers examples drawn from proposed funding and premium rules.Less
Recent financial market and plan termination experiences have exposed the shortcomings of existing funding, disclosure, and premium rules governing private single-employer defined benefit pension plans in the United States. These rules were designed to provide predictability for plan sponsors and administrators by insulating pension plans from the realities of economic and financial market fluctuations. Unfortunately, current practice often overlooks key financial principles that arguably should inform a responsible set of pension rules and the insurance system backing the plans. This chapter outlines the key characteristics of pension plans needed to beneficially guide rule-making and offers examples drawn from proposed funding and premium rules.
Olivia S. Mitchell and Kent Smetters (eds)
- Published in print:
- 2003
- Published Online:
- August 2004
- ISBN:
- 9780199266913
- eISBN:
- 9780191601323
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199266913.001.0001
- Subject:
- Economics and Finance, Financial Economics
This book is the first in a new series produced by the Pension Research Council of the Wharton School of the University of Pennsylvania. It discusses how to improve retirement security given the ...
More
This book is the first in a new series produced by the Pension Research Council of the Wharton School of the University of Pennsylvania. It discusses how to improve retirement security given the volatility of the capital market, and introduces new financial instruments aimed at minimising the risks to retirement income. The book is divided into two sections. Part I presents studies on managing pension plan risks. Part II deals with global developments in retirement risk transfer.Less
This book is the first in a new series produced by the Pension Research Council of the Wharton School of the University of Pennsylvania. It discusses how to improve retirement security given the volatility of the capital market, and introduces new financial instruments aimed at minimising the risks to retirement income. The book is divided into two sections. Part I presents studies on managing pension plan risks. Part II deals with global developments in retirement risk transfer.
Julia Coronado and Nellie Liang
- Published in print:
- 2006
- Published Online:
- September 2006
- ISBN:
- 9780199204656
- eISBN:
- 9780191603822
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199204659.003.0006
- Subject:
- Economics and Finance, Financial Economics
It is sometimes argued that firms sponsoring defined benefit pensions are led to take higher risks because pension insurance premiums and funding requirements do not reflect the riskiness of the ...
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It is sometimes argued that firms sponsoring defined benefit pensions are led to take higher risks because pension insurance premiums and funding requirements do not reflect the riskiness of the pension plan portfolio or sponsor bankruptcy risk. This perspective is tested by linking company data on expected default probabilities with newly-available information on pension plan assets. It is shown that moral hazard induced by the current pension insurance environment has influenced corporate pension plan sponsor funding outcomes, even controlling for cash availability. There is no evidence that the share of plan assets invested in equities is related to firm bankruptcy risk or the plan’s contingent claims on the pension insurance entity.Less
It is sometimes argued that firms sponsoring defined benefit pensions are led to take higher risks because pension insurance premiums and funding requirements do not reflect the riskiness of the pension plan portfolio or sponsor bankruptcy risk. This perspective is tested by linking company data on expected default probabilities with newly-available information on pension plan assets. It is shown that moral hazard induced by the current pension insurance environment has influenced corporate pension plan sponsor funding outcomes, even controlling for cash availability. There is no evidence that the share of plan assets invested in equities is related to firm bankruptcy risk or the plan’s contingent claims on the pension insurance entity.
Alicia H. Munnell, Natalia Orlova, and Anthony Webb
- Published in print:
- 2013
- Published Online:
- January 2014
- ISBN:
- 9780199683772
- eISBN:
- 9780191763359
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199683772.003.0005
- Subject:
- Business and Management, Pensions and Pension Management
Financial advice tends to focus on financial assets, but other levers may be more important for most households. This chapter proceeds in three stages. First, we report a simple Excel spreadsheet ...
More
Financial advice tends to focus on financial assets, but other levers may be more important for most households. This chapter proceeds in three stages. First, we report a simple Excel spreadsheet exercise that provides a stylized example of the tradeoff between returns and time spent in the labor force. Next, we use data from the Health and Retirement Study (HRS) on pre-retirees age 51–64 to see how the gap between retirement needs and retirement resources is affected by working longer, taking out a reverse mortgage, controlling spending, and shifting all assets to equities with no risk. Last, we use a simple dynamic programming model to calculate a risk-adjusted measure of the value for the average household of moving from a typical conservative portfolio to an optimal portfolio. Our answer from all three exercises suggests that the focus on asset allocation is misplaced.Less
Financial advice tends to focus on financial assets, but other levers may be more important for most households. This chapter proceeds in three stages. First, we report a simple Excel spreadsheet exercise that provides a stylized example of the tradeoff between returns and time spent in the labor force. Next, we use data from the Health and Retirement Study (HRS) on pre-retirees age 51–64 to see how the gap between retirement needs and retirement resources is affected by working longer, taking out a reverse mortgage, controlling spending, and shifting all assets to equities with no risk. Last, we use a simple dynamic programming model to calculate a risk-adjusted measure of the value for the average household of moving from a typical conservative portfolio to an optimal portfolio. Our answer from all three exercises suggests that the focus on asset allocation is misplaced.
James A. Wooten
- Published in print:
- 2005
- Published Online:
- March 2012
- ISBN:
- 9780520242739
- eISBN:
- 9780520931398
- Item type:
- chapter
- Publisher:
- University of California Press
- DOI:
- 10.1525/california/9780520242739.003.0004
- Subject:
- History, American History: 20th Century
Reforms to the Employee Retirement Income Security Act (ERISA) embody a worker-security theory of pensions. This view received its most important early expression in the report of the President’s ...
More
Reforms to the Employee Retirement Income Security Act (ERISA) embody a worker-security theory of pensions. This view received its most important early expression in the report of the President’s Committee on Corporate Pension Funds (Cabinet Committee). It became clear that the more stringent rules might apply to corporate plans when the Senate adopted Albert Gore’s (D, Tenn.) amendment to eliminate capital gains treatment for lump-sum distributions from any qualified retirement plan. The goal of the tax subsidy was to encourage firms to provide retirement income to employees. The technical group’s response to the Cabinet Committee’s proposals for expanding coverage and limiting tax avoidance was more ambivalent. Public Policy and Private Pension Programs appeared six months after Vance Hartke introduced his bill to create a termination insurance program and less than four months after Studebaker terminated the pension plan for workers in South Bend.Less
Reforms to the Employee Retirement Income Security Act (ERISA) embody a worker-security theory of pensions. This view received its most important early expression in the report of the President’s Committee on Corporate Pension Funds (Cabinet Committee). It became clear that the more stringent rules might apply to corporate plans when the Senate adopted Albert Gore’s (D, Tenn.) amendment to eliminate capital gains treatment for lump-sum distributions from any qualified retirement plan. The goal of the tax subsidy was to encourage firms to provide retirement income to employees. The technical group’s response to the Cabinet Committee’s proposals for expanding coverage and limiting tax avoidance was more ambivalent. Public Policy and Private Pension Programs appeared six months after Vance Hartke introduced his bill to create a termination insurance program and less than four months after Studebaker terminated the pension plan for workers in South Bend.
Matthew P. Fink
- Published in print:
- 2008
- Published Online:
- January 2009
- ISBN:
- 9780195336450
- eISBN:
- 9780199868469
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195336450.003.0007
- Subject:
- Economics and Finance, Macro- and Monetary Economics, Financial Economics
Today it is natural to associate mutual funds with retirement plans since funds are the largest funding medium for 401(k) and other defined contribution plans, as well as for Individual Retirement ...
More
Today it is natural to associate mutual funds with retirement plans since funds are the largest funding medium for 401(k) and other defined contribution plans, as well as for Individual Retirement Accounts (IRAs). But for many years the retirement market was dominated by defined benefit plans, which did not invest in mutual funds. The revolution in retirement plans began in 1962 when Congress authorized self-employed individuals to establish “Keogh plans.” It accelerated with the enactment of the Employee Retirement Income Security Act of 1974, which created the first IRAs, and took a quantum leap forward in 1978 when Congress authorized the creation of 401(k) plans.Less
Today it is natural to associate mutual funds with retirement plans since funds are the largest funding medium for 401(k) and other defined contribution plans, as well as for Individual Retirement Accounts (IRAs). But for many years the retirement market was dominated by defined benefit plans, which did not invest in mutual funds. The revolution in retirement plans began in 1962 when Congress authorized self-employed individuals to establish “Keogh plans.” It accelerated with the enactment of the Employee Retirement Income Security Act of 1974, which created the first IRAs, and took a quantum leap forward in 1978 when Congress authorized the creation of 401(k) plans.
Matthew P. Fink
- Published in print:
- 2011
- Published Online:
- January 2012
- ISBN:
- 9780199753505
- eISBN:
- 9780199918805
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199753505.003.0007
- Subject:
- Economics and Finance, Macro- and Monetary Economics, Financial Economics
Today it is quite natural to associate mutual funds with retirement plans. After all, mutual funds are the largest funding medium for 401(k) and other defined contribution plans as well as for ...
More
Today it is quite natural to associate mutual funds with retirement plans. After all, mutual funds are the largest funding medium for 401(k) and other defined contribution plans as well as for individual retirement accounts (IRAs). Mutual funds constitute one quarter of all U.S. retirement plan assets. The close association between mutual funds and retirement plans is a relatively new phenomenon. For many years, the corporate retirement market was dominated by defined benefit plans, which did not invest to any significant degree in mutual fund shares. Management of the smaller universe of defined contribution plans was dominated by banks and insurance companies, which did not make use of mutual funds. The revolution in retirement plans began quietly in 1962 when Congress permitted self-employed individuals to establish retirement plans. It accelerated with the enactment of the Employee Retirement Income Security Act of 1974, which created the first IRAs, and took a quantum leap forward in 1981 when Congress permitted all workers to have IRAs and the Internal Revenue Service adopted regulations laying the groundwork for 401(k) plans.Less
Today it is quite natural to associate mutual funds with retirement plans. After all, mutual funds are the largest funding medium for 401(k) and other defined contribution plans as well as for individual retirement accounts (IRAs). Mutual funds constitute one quarter of all U.S. retirement plan assets. The close association between mutual funds and retirement plans is a relatively new phenomenon. For many years, the corporate retirement market was dominated by defined benefit plans, which did not invest to any significant degree in mutual fund shares. Management of the smaller universe of defined contribution plans was dominated by banks and insurance companies, which did not make use of mutual funds. The revolution in retirement plans began quietly in 1962 when Congress permitted self-employed individuals to establish retirement plans. It accelerated with the enactment of the Employee Retirement Income Security Act of 1974, which created the first IRAs, and took a quantum leap forward in 1981 when Congress permitted all workers to have IRAs and the Internal Revenue Service adopted regulations laying the groundwork for 401(k) plans.
Paula K. Gajewski
- Published in print:
- 2017
- Published Online:
- May 2018
- ISBN:
- 9780813056524
- eISBN:
- 9780813053455
- Item type:
- chapter
- Publisher:
- University Press of Florida
- DOI:
- 10.5744/florida/9780813056524.003.0012
- Subject:
- History, American History: 20th Century
In 1974, President Gerald Ford signed the Employee Retirement Income Security Act, which revolutionized American private retirement practices. The legislation created the Individual Retirement ...
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In 1974, President Gerald Ford signed the Employee Retirement Income Security Act, which revolutionized American private retirement practices. The legislation created the Individual Retirement Account (IRA), the cornerstone of modern retirement planning. The creation of massive individual and corporate retirement accounts has significantly reshaped financial markets.Less
In 1974, President Gerald Ford signed the Employee Retirement Income Security Act, which revolutionized American private retirement practices. The legislation created the Individual Retirement Account (IRA), the cornerstone of modern retirement planning. The creation of massive individual and corporate retirement accounts has significantly reshaped financial markets.
James A. Wooten
- Published in print:
- 2005
- Published Online:
- March 2012
- ISBN:
- 9780520242739
- eISBN:
- 9780520931398
- Item type:
- chapter
- Publisher:
- University of California Press
- DOI:
- 10.1525/california/9780520242739.003.0010
- Subject:
- History, American History: 20th Century
Employee Retirement Income Security Act of 1974 (ERISA) introduced a new conceptual frame of reference for federal pension policy. Although ERISA was known as the “pension reform law,” it has also ...
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Employee Retirement Income Security Act of 1974 (ERISA) introduced a new conceptual frame of reference for federal pension policy. Although ERISA was known as the “pension reform law,” it has also had a major effect on medical provision in the United States. The political history of ERISA suggests that, without the threat of conflicting state laws, employers and unions that sponsor multistate health plans will oppose initiatives to create federal minimum standards for health plans or expand the liability of such plans. The tax treatment of pension plans created a significant disparity in the tax laws. ERISA’s limited regulation of welfare plans and its sweeping preemption provision produced a healthcare system in which there are different rules for plans sponsored by public- and private-sector employers and different rules for private-sector plans depending on whether a plan purchases insurance or self-insures. The major influences of ERISA on health policy are explained.Less
Employee Retirement Income Security Act of 1974 (ERISA) introduced a new conceptual frame of reference for federal pension policy. Although ERISA was known as the “pension reform law,” it has also had a major effect on medical provision in the United States. The political history of ERISA suggests that, without the threat of conflicting state laws, employers and unions that sponsor multistate health plans will oppose initiatives to create federal minimum standards for health plans or expand the liability of such plans. The tax treatment of pension plans created a significant disparity in the tax laws. ERISA’s limited regulation of welfare plans and its sweeping preemption provision produced a healthcare system in which there are different rules for plans sponsored by public- and private-sector employers and different rules for private-sector plans depending on whether a plan purchases insurance or self-insures. The major influences of ERISA on health policy are explained.
James A. Wooten
- Published in print:
- 2005
- Published Online:
- March 2012
- ISBN:
- 9780520242739
- eISBN:
- 9780520931398
- Item type:
- chapter
- Publisher:
- University of California Press
- DOI:
- 10.1525/california/9780520242739.003.0003
- Subject:
- History, American History: 20th Century
This chapter elaborates how Studebaker Corporation came to play its role in the political history of the Employee Retirement Income Security Act (ERISA). The Studebaker-Packard Corporation terminated ...
More
This chapter elaborates how Studebaker Corporation came to play its role in the political history of the Employee Retirement Income Security Act (ERISA). The Studebaker-Packard Corporation terminated a pension plan the United Auto Workers (UAW) had negotiated for employees of the Packard Motor Car Company. Studebaker became “the most glorious story of failure in the business.” The Studebaker Corporation and the Packard Motor Car Company created pension plans for their production employees during the Congress of Industrial Organization’s (CIO) “pension stampede.” The Kaiser and Hudson shutdowns led the UAW to push for vesting in its next round of collective bargaining. Studebaker-Packard had avoided bankruptcy in 1958 by restructuring its debt, a move that passed “real control” of the firm into “the hands of New York bankers.” The Studebaker shutdown and the report of the President’s Committee put pension risks on the congressional agenda and launched the campaign for pension reform.Less
This chapter elaborates how Studebaker Corporation came to play its role in the political history of the Employee Retirement Income Security Act (ERISA). The Studebaker-Packard Corporation terminated a pension plan the United Auto Workers (UAW) had negotiated for employees of the Packard Motor Car Company. Studebaker became “the most glorious story of failure in the business.” The Studebaker Corporation and the Packard Motor Car Company created pension plans for their production employees during the Congress of Industrial Organization’s (CIO) “pension stampede.” The Kaiser and Hudson shutdowns led the UAW to push for vesting in its next round of collective bargaining. Studebaker-Packard had avoided bankruptcy in 1958 by restructuring its debt, a move that passed “real control” of the firm into “the hands of New York bankers.” The Studebaker shutdown and the report of the President’s Committee put pension risks on the congressional agenda and launched the campaign for pension reform.
Joseph F. Quinn and Kevin E. Cahill
- Published in print:
- 2018
- Published Online:
- October 2018
- ISBN:
- 9780198827443
- eISBN:
- 9780191866296
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198827443.003.0007
- Subject:
- Business and Management, Pensions and Pension Management
This chapter describes the challenges and opportunities that older Americans face, with a focus on retirement income security and the role of continued work later in life. We first overview the new ...
More
This chapter describes the challenges and opportunities that older Americans face, with a focus on retirement income security and the role of continued work later in life. We first overview the new world of retirement income security including a discussion of how a low return environment (e.g. low interest rates) exacerbates existing retirement income security challenges. We then document how older people have responded to the evolving retirement income landscape, especially when and how they exit the labor force, and we explore how continued work later in life can help mitigate some of the anticipated retirement security challenges. We then pose some important outstanding questions. The implications of societal aging depend in large part on how we harness or squander the labor resources of older individuals.Less
This chapter describes the challenges and opportunities that older Americans face, with a focus on retirement income security and the role of continued work later in life. We first overview the new world of retirement income security including a discussion of how a low return environment (e.g. low interest rates) exacerbates existing retirement income security challenges. We then document how older people have responded to the evolving retirement income landscape, especially when and how they exit the labor force, and we explore how continued work later in life can help mitigate some of the anticipated retirement security challenges. We then pose some important outstanding questions. The implications of societal aging depend in large part on how we harness or squander the labor resources of older individuals.
James A. Wooten
- Published in print:
- 2005
- Published Online:
- March 2012
- ISBN:
- 9780520242739
- eISBN:
- 9780520931398
- Item type:
- chapter
- Publisher:
- University of California Press
- DOI:
- 10.1525/california/9780520242739.003.0001
- Subject:
- History, American History: 20th Century
On Labor Day, President Gerald Ford signed the Employee Retirement Income Security Act of 1974 (ERISA). The enactment of ERISA presents a political puzzle. The political history of ERISA provides ...
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On Labor Day, President Gerald Ford signed the Employee Retirement Income Security Act of 1974 (ERISA). The enactment of ERISA presents a political puzzle. The political history of ERISA provides benchmarks for gauging how well current law suits emerging needs and an important counterpoint to the conventional wisdom about policy-making in the United States Congress. ERISA recast the federal government’s role in the private pension system. ERISA reflected a new conceptual framework for pension policymaking—the worker-security theory. Union officials who opposed pension reform used a related argument that stressed the economic constraints on the employment relationship. Jacob Javits’ tactics did not prevent members of Congress from exercising independent judgment in their consideration of pension reform legislation.Less
On Labor Day, President Gerald Ford signed the Employee Retirement Income Security Act of 1974 (ERISA). The enactment of ERISA presents a political puzzle. The political history of ERISA provides benchmarks for gauging how well current law suits emerging needs and an important counterpoint to the conventional wisdom about policy-making in the United States Congress. ERISA recast the federal government’s role in the private pension system. ERISA reflected a new conceptual framework for pension policymaking—the worker-security theory. Union officials who opposed pension reform used a related argument that stressed the economic constraints on the employment relationship. Jacob Javits’ tactics did not prevent members of Congress from exercising independent judgment in their consideration of pension reform legislation.
Sylvester J. Schieber
- Published in print:
- 2012
- Published Online:
- April 2015
- ISBN:
- 9780199890958
- eISBN:
- 9780190261382
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:osobl/9780199890958.003.0024
- Subject:
- Economics and Finance, Microeconomics
This chapter examines issues regarding the distribution and costs of Social Security benefits. Since the passage of the Employee Retirement Income Security Act (ERISA), much of the policy dialogue ...
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This chapter examines issues regarding the distribution and costs of Social Security benefits. Since the passage of the Employee Retirement Income Security Act (ERISA), much of the policy dialogue about employer-sponsored pension plans has focused on the “who” and the “how much” of the tax preferences. Policymakers’ concerns about high earners reaping too much subsidy from the tax deferral have led to repeated restrictions and reductions in pension contribution and benefit limits. Essentially the same concerns prompted policymakers to legislate widespread discrimination provisions and testing to ensure that retirement benefits were spread widely and fairly. The chapter considers policy issues of employer-sponsored retirement plans in relation to Social Security, along with payroll tax costs and benefits of Social Security participation. It presents data on the tax benefits of employer-sponsored retirement plans to show how the Social Security system interacts with private pensions. It also discusses the implications of Social Security spousal benefits and concludes by turning to the U.S. retirement policy.Less
This chapter examines issues regarding the distribution and costs of Social Security benefits. Since the passage of the Employee Retirement Income Security Act (ERISA), much of the policy dialogue about employer-sponsored pension plans has focused on the “who” and the “how much” of the tax preferences. Policymakers’ concerns about high earners reaping too much subsidy from the tax deferral have led to repeated restrictions and reductions in pension contribution and benefit limits. Essentially the same concerns prompted policymakers to legislate widespread discrimination provisions and testing to ensure that retirement benefits were spread widely and fairly. The chapter considers policy issues of employer-sponsored retirement plans in relation to Social Security, along with payroll tax costs and benefits of Social Security participation. It presents data on the tax benefits of employer-sponsored retirement plans to show how the Social Security system interacts with private pensions. It also discusses the implications of Social Security spousal benefits and concludes by turning to the U.S. retirement policy.
Sylvester J. Schieber
- Published in print:
- 2012
- Published Online:
- April 2015
- ISBN:
- 9780199890958
- eISBN:
- 9780190261382
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:osobl/9780199890958.003.0017
- Subject:
- Economics and Finance, Microeconomics
This chapter examines issues concerning employer-sponsored pension plans. By the late twentieth century, the employer-sponsored retirement system was becoming an increasingly larger slice of the ...
More
This chapter examines issues concerning employer-sponsored pension plans. By the late twentieth century, the employer-sponsored retirement system was becoming an increasingly larger slice of the retirement pie. When Congress passed the Employee Retirement Income Security Act (ERISA) in 1974, Social Security delivered $57.6 billion in benefits, while private-sector defined benefit plans and defined contribution plans delivered only 22.5 percent of that amount—slightly less than $13 billion. But private retirement programs gained steadily and, by 2000, were paying out benefits worth two-thirds of those provided by Social Security. While opinions might vary about the private retirement system’s delivery of retirement benefits and contribution to household savings, there is wider agreement about how the system affects retirement patterns. This chapter also discusses the implications of retirement patterns on retirement plans.Less
This chapter examines issues concerning employer-sponsored pension plans. By the late twentieth century, the employer-sponsored retirement system was becoming an increasingly larger slice of the retirement pie. When Congress passed the Employee Retirement Income Security Act (ERISA) in 1974, Social Security delivered $57.6 billion in benefits, while private-sector defined benefit plans and defined contribution plans delivered only 22.5 percent of that amount—slightly less than $13 billion. But private retirement programs gained steadily and, by 2000, were paying out benefits worth two-thirds of those provided by Social Security. While opinions might vary about the private retirement system’s delivery of retirement benefits and contribution to household savings, there is wider agreement about how the system affects retirement patterns. This chapter also discusses the implications of retirement patterns on retirement plans.
