This recent article from Wharton–“Retirement Programs Face an “Aging-Population Tsunami“–reports on what was said at a recent conference entitled “The Evolution of Risk and Reward Sharing in Retirement” sponsored by the Wharton School’s Pension Research Council and Boettner Center for Pensions and Retirement Research. Excerpt:
Against the backdrop of rising concerns over both public and private pension systems in the U.S., industry experts convened at a recent Wharton conference to debate ways in which retirement programs can be better managed. Participants discussed such topics as the problems facing Social Security, the solvency of the Pension Benefit Guaranty Corp., and the consequences of an increase in defined contribution plans like 401(k)s along with a corresponding decline in defined benefit plans.
Douglas Holtz-Eakin, director of the Congressional Budget Office (CBO), told the conference. “Retirement policy is the central policy issue of our time. Period.” Mark Warshawsky, assistant secretary for economic policy at the U.S. Department of Treasury stated that “[t]he pension insurance premium structure provides little or no incentive for adequate funding” of pension plans.
An interesting suggestion for improving the retirement system came from Douglas Fore, principal research fellow at the Teachers Insurance Annuity Association-College Retirement Equities Fund (TIAA-CREF):
Fore suggested the possibility of developing a portable defined benefit plan in which employees could work toward a defined benefit pension even if they switch jobs. To do that, a system based on common actuarial standards and plan-benefit design would have to be developed. He also suggested individuals could purchase service credits and carry them along as they switch jobs. “We have just begun to sketch this out, but we do think this approach has some potential.”