Subject: Studies in the News 05-43 (November 23, 2005)


CALIFORNIA RESEARCH BUREAU
CALIFORNIA STATE LIBRARY
Studies in the News:
Retirement Savings, Pension Funds and Social Security Supplement


Contents This Week

Introductory Material ECONOMY
   Myths about retirement plans
   Retirement savings
   Raising income contribution limits for pensions
   Multi-employer pension plans
   Personal retirement accounts
   Private pension problems
   Pension losses for baby boomers
GENERAL GOVERNMENT
   Pension fund obligations
   Public pension funds shortfall
   Defined benefit plan deficits
   Pension fund errors
   Billions paid to pensioners of bankrupt companies
HUMAN SERVICES
   Social Security versus health care costs
   Social Security choice
   Social Security reform
   Securing social security
   Social security reform
   Social security benefit structure
   Preserving social security
   Heritage supports SSI change
   Hispanics and social security debate
   Social security retirement costs
PREVIOUSLY IN STUDIES IN THE NEWS
   Pension tax subsidies
   Securing social security
   CalPERS venture capital performance
   Insurance for pension benefits
   Pension funding and state finances
   San Diego pensions illegal
   Legality of pension benefits
   Generous retirement benefits for a generation
   Myths of defined contribution retirement plans
   Shifts in retirement age
   Comparing defined benefit and defined contributions
   Defined benefit plans create value
   Primer on funding retirement plans
   Altering public pension systems
   Social Security future outlook
   Latinos and Social Security
   Social Security reform
   Voluntary plans and Social Security
   Social Security and issues relating to public employees
   Ramifications of Social Security benefits
   Social Security and children
   Families and Social Security
   Impact of Social Security
Introduction to Studies in the News

Studies in the News is a very current compilation of items significant to the Legislature and Governor's Office. It is created weekly by the State Library's Research Bureau to supplement the public policy debate in California’s Capitol. To help share the latest information with state policymakers, these reading lists are now being made accessible through the State Library’s website. This week's list of current articles in various public policy areas is presented below.

Service to State Employees:

  • When available, the URL for the full text of each item is provided.

  • California State Employees may contact the State Information & Reference Center (916-654-0206; cslsirc@library.ca.gov) with the SITN issue number and the item number [S#].

  • All other interested individuals should contact their local library - the items may be available there, or may be borrowed by your local library on your behalf.

The following studies are currently on hand:

ECONOMY

SAVINGS & PENSIONS

Myths and Misperceptions of Defined Benefit and Defined Contribution Plans By National Association of State Retirement Administrators. (The Association, Baton Rouge, Louisiana) 2005. 24 p.

Full Text at: www.nasra.org/resources/myths%20and%20misperceptions.pdf

["Although accumulating wealth is an admirable objective, the chief purpose of an employer-sponsored retirement plan is not to make workers rich. Rather, the central purpose of an employee-sponsored retirement plan is to promote workers' retirement security. Among participants whose primary retirement benefit is a defined contribution (DC) plan, some will, in fact, receive substantially higher benefits than they would under a defined benefit (DB) plan. However, many workers will fare worse under a DC plan.... By providing an assured benefit whose value is known in advance of retirement, a DB plan meets the fundamental and imperative objective of a retirement benefit: to promote retirement security."]

[Request #S54301]

Return to the Table of Contents

Trends and Issues: Do People Save Enough for Retirement? By Alicia H. Munnell, TIAA-CREF Institute. (The Institute, New York, New York) 2005. 11 p.

Full Text at: www.tiaa-crefinstitute.org/research/trends/docs/tr050105.pdf

["This report looks at how much income individuals need in retirement, and summarizes results from economic studies on the adequacy of individuals' retirement savings. It also discusses how housing equity should be considered as part of retirement wealth, the impact of reductions in Social Security benefits, and the shift from defined benefit plans to defined contribution plans on Americans' preparedness for retirement. Middle-class households need about 65 to 75 percent of pre-retirement income to maintain their standard of living in retirement. The shift from defined benefit plans to defined contribution plans has not produced expected levels of retirement savings."]

[Request #S54302]

Return to the Table of Contents

Boosting Income and Contribution Limits for Pension Savings Would Swell Deficits, Do Little For Middle-Class Families. By Joel Friedman and Robert Greenstein, Center on Budget and Policy Priorities. (The Center, Washington, DC) 2005. 11 p.

Full Text at: www.cbpp.org/5-18-05socsec.pdf

[“This analysis explores proposals to eliminate income limits on IRA’s, raise contribution limits on IRAs and 401 (k)s, and establish ‘health IRAs’ or similar mechanisms.”]

[Request #S54303]

Return to the Table of Contents

Multiemployer Pension Plans: Testimony. By Douglas Holtz-Eakin, Congressional Budget Office. Before the Subcommittee on Select Revenue Measures Committee on Ways and Means U.S. House of Representatives. (The Office, Washington, DC) June 28, 2005. 14 p.

Full Text at: www.cbo.gov/ftpdocs/65xx/doc6500/06-28-Multiemployer-Plans.pdf

["Although multiemployer pension plans and single-employer pension plans are both designed to provide specified monthly benefits to workers at retirement, there are major differences between the two types of plans in how they are structured.... Given the financial exposure that both workers and employers face in multiemployer plans, questions arise about whether current funding rules should be altered to better promote the long-term financial security of the plans and whether additional changes should be made to promote the availability of timely, accurate information about the financial condition of the plans."]

[Request #S54304]

Return to the Table of Contents

Noble Lies, Liberal Purposes, and Personal Retirement Accounts. By Will Wilkinson, CATO Institute. (The Institute, Washington, DC) 2005. 20 p.

Full Text at: www.cato.org/pubs/ssps/ssp34.pdf

["A system of personal retirement accounts plus a means-tested safety net would serve the 'social insurance' function better than the Social Security status quo according to liberal standards.... Personal retirement accounts would materially enhance equality and social cohesion by more fully integrating workers into the market ... and closing the gap between the investing and noninvesting classes."]

[Request #S54305]

Return to the Table of Contents

Private Pensions: Recent Experiences of Large Defined Benefit Plans Illustrate Weaknesses in Funding Rules. By the U.S. Government Accountability Office. GAO-05-294. (The Office, Washington, DC) May 2005. 62 p.

Full Text at: www.gao.gov/new.items/d05294.pdf

["The federal rules designed to ensure that millions of people receive their pension benefits are flawed, making it easier for retirement plans to have risky financial shortfalls, congressional investigators have found....The government's own rules are contributing to the problem because of leeway in the way companies can count assests and liabilities." Sacramento Bee (May 31, 2005) 1.]

[Request #S54306]

Return to the Table of Contents

"Fiscal Train Wreck Feared: Experts Say Lurking U.S. Crisis may Spur Market Plunge, Pension Losses, Lower Standard of Living. By Richard Wolf. IN: Sacramento Bee (November 15, 2005) A1+

["The leading edge of the baby boom hits age 62 in 2008 and can take early retirement.... Baby boomers begin to reach age 65 by 2011 and go on Medicare. Of all the fiscal problems facing the nation, this is by far the biggest.... An aging population, health care inflation and advanced medical technology will create a perfect storm of spiraling costs."]

[Request #S54313]

Return to the Table of Contents

GENERAL GOVERNMENT

PENSION FUNDS

Pension Fallout Nigh: Liabilities Foreshadow Bankruptcies. By Troy Anderson. IN: Daily News of Los Angeles (September 18, 2005) (online).

["California's largest public agencies face setting an extra $108 billion aside in the coming years to pay for promised retiree pensions, health care and workers' compensation claims. That's a tenfold increase over the $10 billion the state Legislative Analyst's Office calculated among hundreds of public agencies statewide just three years ago. And experts say the $108 billion is conservative, estimating it could soar as cities, counties, school districts and other agencies fully calculate the costs - especially retiree health care liabilities - under new federal accounting rules. Los Angeles County alone currently has a total unfunded liability of $16 billion; Los Angeles city government, $3.2 billion; and Los Angeles Unified School District, $6.9 billion. Then there's CalPERS - the state's public employee retirement system - with a total unfunded liability of $22.3 billion and the California teachers retirement system with $24.2 billion."]

[Request #S54307]

Return to the Table of Contents

2005 Wilshire Report on State Retirement Systems: Funding Levels and Asset Allocation. By Wilshire Research. (Santa Monica, California. Wilshire Associates Inc) 2005. 17 p.

Full Text at: www.wilshire.com/Company/2005_State_Retirement_Funding_Report.pdf

["Wilshire estimates that as of December 31, 2003 defined benefit pension assets for S&P 500 companies totaled $1,031 billion, $123 billion less than pension liabilities of $1,154 billion, giving an aggregate funding ratio for corporate plans of 89%. Our findings indicate that the asset shortfall for state pension plans is similar to that of city and county retirement systems. Wilshire estimates that as of June 30, 2003 city and county pension assets totaled $148.6 billion, $30.6 billion less than pension liabilities of $179.2 billion, giving an aggregate funding ratio for city and county retirement systems of 83%. Of the 64 state retirement systems which provided actuarial data for 2004, 84% have market value of assets less than pension liabilities, or are underfunded. The average underfunded plan has a ratio of assets-to-liabilities equal to 77%"]

[Request #S54308]

Return to the Table of Contents

The Gathering Pension Storm: How Govenment Pension Plans are Breaking the Bank and Strategies for Reform. By George Passantino and Adam Summers. (Los Angeles, California: Reason Foundation) 2005 138 p.

Full Text at: www.reason.org/ps335.pdf

[The National Association of State Retirement Administrators reported an aggregate unfunded liability of over $264 billion across the 103 systems it surveyed. In a separate analysis by Wilshire Associates, the aggregate unfunded liability of state pension systems was estimated at $366 billion in 2003. Sixteen states had unfunded liabilities larger than their annual state budget."]

[Request #S54309]

Return to the Table of Contents

CalSTRs: Errors May Cost Millions. By Gilbert Chan. IN: Sacramento Bee (September 18, 2005) D1.

Full Text at: www.sacbee.com/content/business/story/13584550p-14425381c.html

["Faced with one of the nation's most complicated pension reporting rules, school districts across the state are making errors costing thousands of dollars to the California State Teachers' Retirement System. Auditors say the potential long-term losses easily could be in the millions of dollars. Auditors have found a pattern of income reporting miscalculations, mistakes and misinterpretations that in the end could shortchange teachers of their monthly retirement benefits or incorrectly boost their pensions...Part-time teachers and substitutes often aren't told they can join the retirement program...CalSTRS doesn't know how many of the state's 500 charter schools and their 7,000 teachers are part of CalSTRS."]

[Request #S54310]

Return to the Table of Contents

Performance and Accountability Report. By the Pension Benefit Guaranty Corporation. (The Corporation, Washington, DC) November 15, 2005. 65 p.

Full Text at: www.pbgc.gov/docs/2005par.pdf

["The Pension Benefit Guaranty Corporation (PBGC), which insures defined-benefit plans of 44 million people and takes over the plans of bankrupt companies, reported a deficit of $22.8 billion at the end of the 2005 fiscal year. Premiums, paid by companies, totaled $1.5 billion. The PBGC said it assumed responsibility for the pension benefits of an additional 235,000 workers and retirees in 2005, bringing the total to 1.3 million and paid benefits of $3.7 billion, up from $3 billion in 2004." Sacramento Bee (November 17, 2005) D1.]

[Request #S54316]

Return to the Table of Contents

HUMAN SERVICES

ENTITLEMENTS

The Burden of Social Security Taxes and the Burden of Excessive Health Care Costs. By Dean Baker and David Rosnick, Center for Economic Policy Research. (The Center, Washington, DC) 2005. 7 p.

Full Text at: www.cepr.net/publications/social_security_2005_03_24.pdf

["The excessive health care cost growth over the years 1980 to 2004 imposed a burden that is 18 times as large as the tax increase that the Congressional Budget Office estimates would be necessary to keep Social Security solvent. Furthermore, health care costs are projected to continue to grow far more rapidly than the economy."]

[Request #S54311]

Return to the Table of Contents

SOCIAL SECURITY

No Second Best: The Unappetizing Alternatives to Social Security Privatization. By Michael Tanner, Project on Social Security Choice, The Cato Institute. Social Security Privatization. SSP No. 24. (The Project, Washington, DC) 2005. 14 p.

Full Text at: www.socialsecurity.org/pubs/ssps/ssp24.pdf

["The debate over Social Security privatization is not over a choice between privatization and a mythological Social Security system that can pay all promised future benefits without any increase in taxes... The real debate, given the financial unsustainability of the current system, is over alternative proposals for reforming the system."]

[Request #S54312]

Return to the Table of Contents

The Personal Lockbox: A First Step on the Road to Social Security Reform. By Michael Tanner. Policy Analysis No. 550. (The Institute, Washington, DC) September 13, 2005. 16 p.

Full Text at: cato.org/pubs/pas/pa550.pdf

["As (Federal Reserve Chairman Alan) Greenspan put it in his March 2005 testimony to the Senate Special Committee on Aging, 'we need to make the phantom ‘lock-boxes’ around the Social Security Trust Fund real.' Greenspan went on to suggest that the best way to accomplish that was through the creation of personal accounts. The Social Security Trust Fund was set up in 1939, largely as a political mechanism to ensure that Social Security taxes were not 'misused.'... The accumulation of Social Security surpluses, through the Trust Fund or any other mechanism, represents savings only in so far as it reduces the level of publicly held debt. That is, if offset by increased borrowing elsewhere in the government, no actual savings has taken place. That is precisely what is happening today."]

[Request #S54314]

Return to the Table of Contents

Securing Social Security: Sensitivity to Economic Assumptions and Analysis of Policy Options. By Brian Roach and Frank Ackerman, Global Development and Environment Institute. Working Paper. No. 05-03. (The Institute, Medford, Massachussets) 2005. 33 p.

Full Text at: ase.tufts.edu/gdae/Pubs/wp/05-03SecuringSocialSecurity.pdf

["The President has stated that the system is facing a 'crisis' and will be 'bankrupt' in 2041.... In this paper we consider whether Social Security is really facing a crisis and whether any potential future shortfalls could be remedied without changing the basic structure of the existing program."]

[Request #S54315]

Return to the Table of Contents

Social Security Status Quo Versus Reform: What's the Tradeoff? By Jagadeesh Gakhale. CATO Institute. (The Institute, Washington, DC) 2005. 16 p.

Full Text at: www.cato.org/pubs/ssps/ssp35.pdf

["Options for Social Security reform must be weighed against the proper alternative—the financial implications of postponing policy adjustments. The program's massive financial shortfall implies an annual interest cost accrual of more than $700 billion—far exceeding growth in the economy's capacity. If changes to Social Security policies are delayed, runaway growth in Social Security's financial short-fall is likely to ensure higher tax rates and more adverse reactions by financial markets in the future."]

[Request #S54317]

Return to the Table of Contents

How Would the President's New Social Security Proposals Affect Middle-class Workers and Social Security Solvency? By Jason Furman, Center on Budget and Policy Priorities. (The Center, Washington, DC) 2005. 9 p.

Full Text at: www.cbpp.org/4-29-05socsec.pdf

["The President's proposed change in the Social Security benefit structure is essentially a plan known as 'progressive price indexing'.... The plan would reduce benefits for average earners retiring in 2075 by 28 percent, relative to the current benefit structure, and this reduction would apply equally to retirees, survivors, and people with disabilities. The actuaries also have reported that the benefit reductions under the plan would close about 70 percent of the 75-year Social Security shortfall."]

[Request #S54318]

Return to the Table of Contents

Bush’s Progressive Indexation Plan: A Key Step to Preserve Social Security. By David C. John and Stuart Butler, Heritage Foundation. (The Foundation, Washington DC) 2005. Various pagings.

Full Text at: www.heritage.org/Research/SocialSecurity/wm733.cfm

["Two key changes in the Social Security system are needed to achieve retirement security for all Americans. The first is to phase in changes to the structure of traditional Social Security benefits to create a system of real benefits on which workers and retirees can depend rather than promised benefits that cannot be paid... The second step is to allow workers the opportunity to supplement traditional Social Security benefits by using part of their current payroll taxes to create voluntary personal retirement accounts that they own"]

[Request #S54319]

Return to the Table of Contents

How the President’s Plan Benefits Younger Workers. By Rea S. Hederman, Jr., Heritage Foundation. (The Foundation, Washington DC) 2005. 2 p.

Full Text at: www.heritage.org/Research/SocialSecurity/wm734.cfm

["President Bush’s plan to reform Social Security would bring the system to solvency, but it does more than that, too. The President’s plan also would help retirees achieve greater benefits than are possible under today’s Social Security and let them build up and pass on nest eggs to their children and grandchildren, which most lower- and middle-income households cannot afford to do today."]

[Request #S54320]

Return to the Table of Contents

Hispanics' Large Stake in the Social Security Debate. By Fernando Torres-Gil, Center for Policy Research on Aging, University of California, Los Angeles, and others. Prepared for the Center on Budget and Policy Priorities. (The Center, Washington, DC) June 28, 2005. 5 p.

Full Text at: www.cbpp.org/6-28-05socsec.pdf

["Supporters of replacing part or all of Social Security with private accounts have argued that Hispanics receive relative little for thier payroll tax contributions to Social Security and would fare better under a system of private accounts. In fact the opposite is the case. Research by government agencies and respected private institutions shows that Hispanics receive more in Socal Security benefits for each dollar they pay into the system than either non-Hispanic whites or Blacks. Elderly Hispanics rely more on Social Security than does the elderly population as a whole."]

[Request #S54321]

Return to the Table of Contents

“Social Security and Your Retirement.” By Michael Bazdarich. IN: Forcast Direct, vol. 2 no. 6 (September 2005) pp. 1-4.

[“In order to materially address the coming economic developments … real national savings and investment will have to be increased in the very near future, work-lives will have to be extended, or living standards will have to reduced. A real-world solution will likely involve all three of these shifts.”]

[Request #S54322]

Return to the Table of Contents


PREVIOUSLY IN STUDIES IN THE NEWS
[This section links to items in Studies in the News since the last Retirement Savings, Pension Funds and Social Security Supplement.]

ECONOMY

SAVINGS & PENSIONS

Examining the New Portman-Cardin Legislation: Are Further Pension Tax Subsidies for High-Income Households Affordable or Sound as Pension Policy? By Peter Orszag. (Center on Budget and Policy Priorities, Washington, DC) April 21, 2003. 11 p.

Full Text at: www.cbpp.org/4-21-03tax.pdf

["Current tax benefits related to pensions accrue disproportionately to high-income households.... Lower- and middle-income families ... gain much less.... Most of the provisions that involve the largest revenue losses ... would provide additional tax subsidies to high-income individuals."]

[Request #S7976]

Return to the Table of Contents

Securing Social Security: Sensitivity to Economic Assumptions and Analysis of Policy Options. By Brian Roach and Frank Ackerman, Global Development and Environmental Institute, Tufts University. (The Institute, Medford, Massachusetts) May 2005. 33 p.

Full Text at: ase.tufts.edu/gdae/Pubs/wp/05-03SecuringSocialSecurity.pdf

["Revamping the Social Security program has become a domestic policy priority of the Bush administration. The President has stated that the system is facing a 'crisis' and will be 'bankrupt' in 2041.... In this paper we consider whether Social Security is really facing a crisis and whether any potential future shortfalls could be remedied without changing the basic structure of the existing program."]

[Request #S51411]

Return to the Table of Contents

GENERAL GOVERNMENT

PENSION FUNDS

Alternative Investment Management Program Fund Performance Review. By the California Public Employees' Retirement System. (The System, Sacramento, California) April 30, 2003. Various pagings

Full Text at: www.calpers.ca.gov/invest/aim/aim.asp

["California's giant pension fund, CalPERS, hammered one of the last nails in the coffin of secrecy in the venture capital industry -- and it's probably a good thing for Silicon Valley. It posted the financial performance results of $3 billion of its venture investments on its Web site -- including those of many prominent Bay Area venture firms.... Venture capitalists were worried that the public would misinterpret their results, and pressured CalPERS and Grove Street to keep them private. But early this year, CalPERS about-faced and decided public employees had a right to know how their retirement funds are doing." San Jose Mercury News (May 1, 2003) 1.]

[Request #S8088]

Return to the Table of Contents

Pension Benefit Guaranty Corporation Single-employer Insurance Program: Long-Term Vulnerabilities Warrant "High Risk" Designation: Why Area is "High Risk". By the U.S. General Accounting Office (The Office, Washington, DC) July 23, 2003. 1 p.

Full Text at: www.gao.gov/cgi-bin/getrpt?GAO-03-1050sp

["GAO has designated Pension Benefit Guaranty Corporation’s single-employer pension insurance program as 'high risk,' adding it to the list of agencies or major programs that need urgent attention and transformation to ensure that our national government functions in the most economical, efficient and effective manner possible. The single-employer insurance program insures the pension benefits of over 34 million participants in more than 30,000 private defined benefit plans. Agencies or programs receiving a 'high risk' designation receive greater attention from GAO and are assessed in regular biennial reports."]

[Request #S8705]

Return to the Table of Contents

The Impact of Pension Funding on State Government Finances. By J. Fred Giertz, the University of Illinois at Urbana-Champaign. IN: State Tax Notes vol. 29, no. 7 (August 18, 2003) pp 507 - 513.

["State pension funding today is no sounder than in the early 1990s. This is not necessarily a cause for alarm, but it is a source of concern. Pension funding will be an increasingly important demand on state finances in the upcoming years. Pension funding issues do not have the immediacy .... of the state budget shortfalls for fiscal 2003 and fiscal 2004, but they must be considered when states address long-term structural imbalance problems."]

[Request #S8982]

Return to the Table of Contents

Violations of State & Local Laws Related to SDCERS Pension Fund: By Michael Aguirre, Office of the City Attorney. (The Office, San Diego, California) April 8, 2005. 23 p.

["City Attorney Michael Aguirre declared that San Diego pension benefits spanning nearly a decade are illegal and therefore void, and that a mix of taxes and benefit reductions is needed to close a $1.37 billion pension-system deficit. Aguirre's report said increasing the assets and lowering the liabilities of the $3.6 billion San Diego City Employees Retirement System will be difficult because of limited ability to raise revenue and reduce pension obligations." San Diego Tribune (April 9, 2005) 1.]

The Report. 23 p. :
http://genesis.sannet.gov/infospc/templates/attorney/pdf/thirdinterimreport.pdf

Exhibits for the Report. 192 p.:
http://genesis.sannet.gov/infospc/templates/attorney/pdf/exhibits_report3.pdf

[Request #S51039]

Return to the Table of Contents

Overview of the Pension Crisis. By the City Attorney's Office, City of San Diego. (The Office, San Diego, California) April 2005. 23 p.

Full Text at: genesis.sannet.gov/infospc/templates/attorney/pdf/thirdinterimreport.pdf

["A report declared that San Diego pension benefits spanning nearly a decade are illegal and therefore void, and that a mix of taxes and benefit reductions is needed to close a $1.37 billion pension-system deficit....The report recommends a 'spread the pain' program that calls for reduced benefits for city employees and bigger burdens for city taxpayers. Exactly how much bigger was not specified." San Diego Union-Tribune (April 9, 2005) 1.]

[Request #S51434]

Return to the Table of Contents

RETIREMENT SYSTEMS

The Coming Generational Storm. By Laurence J. Kotlikoff and Scott Burns. (MIT Press, Cambridge, Massacusetts) 2004. 274 p.

["'The baby boomers and the Greatest Generation are delivering an economic disaster to their children,' says Laurence Kotlikoff, a Boston University economist and co-author of The Coming Generational Storm.... The heart of the problem is that the Greatest Generation and baby boomers have promised themselves retirement benefits so generous -- and have contributed so little to financing them -- that even the most prosperous economy in history cannot pay the bill." USA TODAY (October 4, 2004) A1. NOTE: The Coming Generational Storm ... is available for 3-day loan.]

[Request #S4394]

Return to the Table of Contents

Exploding the Myth that Employees Always Prefer Defined Contribution Plans. By Mercer Human Resource Consulting. (Mercer, New York, NY) May 2004. 8 p.

Full Text at: www.calpers.ca.gov/eip-docs/about/press/news/definedplans/explodingmyth-r21.pdf

["Many employers have decided to offer defined contribution retirement plans because they say their employees prefer them. But now evidence indicates that this stated preference is a myth. In fact, depending on the plan structure, employees at different ages and life-cycle stages may prefer defined benefit plans.... Consequently, plan sponsors would be well advised to review the recent research that addresses worker preference, along with data about the elections employees actually make, before considering alternative programs."]

[Request #S59836]

Return to the Table of Contents

How Has The Shift to 401(K)s Affected the Retirement Age? By Alicia H. Munnell and others, Center For Retirement Research, Boston College. Issue in Brief. No. 13. (The Center, Boston, Massachusetts) September 2003. 8 p.

Full Text at: www.bc.edu/centers/crr/issues/ib_13.pdf

["The trend toward earlier retirement has slowed and, perhaps, even reversed. A host of explanations are possible: the elimination of mandatory retirement, the cessation of the expansion of Social Security, the reduction of retirement incentives within Social Security, and the changing nature of the private pension system. This issue brief explores the latter issue -- how the shift in coverage from defined benefit to defined contribution plans may have affected the timing of retirement."]

[Request #S59837]

Return to the Table of Contents

List of Advantages and Disadvantages for DB and DC Plans: GRS Research Memorandum. By Alan Sonnonstine and others, Gabriel Roeder, Smith and Company. (The Company, Roseville, California) November 17, 2003. 3 p.

Full Text at: www.calpers.ca.gov/eip-docs/about/press/news/definedplans/list.pdf

["There are many advantages and disadvantages to both defined benefit and defined contribution plans. In reviewing the following list, keep in mind that what may appear as an advantage to one person may appear as a disadvantage to another."]

[Request #S59838]

Return to the Table of Contents

Defined Benefit Plans: Still a Good Solution? By Mercer Human Resource Consulting. (Mercer, New York, New York) April 2004. 10 p.

Full Text at: www.calpers.ca.gov/eip-docs/about/press/news/definedplans/defined%20benefit-r10.pdf

["Defined benefit (DB) pension plans face severe challenges. Contribution requirements are escalating sharply. Accounting costs suddenly are high and volatile, while looming accounting changes threaten greater volatility.... Despite serious challenges, a well-designed and well-communicated DB plan actually creates substantial value for both employer and employee, and can be a source of competitive advantage for the employer. This [report] will discuss how."]

[Request #S59839]

Return to the Table of Contents

Protecting the Nest Egg: A Primer on Defined Benefit and Defined Contribution Retirement Plans. By Council of Institutional Investors. (The Council, Washington, DC) 2004. 812 p.

Full Text at: www.cii.org/dcwascii/web.nsf/files/A7A439801C253C4A87256F030062AFA0/$file/DB%20v.%20DC%20PPlans.pdf

["In the past several years there has been a major unheaval in the way American workers' pension benefits are funded. A new model is replacing the type of plan that has traditionally formed one leg of the three-legged stool of economic security (the other two being Social Security and personal savings). This monograph discusses the pros and cons of each pension model and summarizes the key facts that policymakers should focus on when deciding which type of plan to favor."]

[Request #S59840]

Return to the Table of Contents

Fast Facts: The Myths and Realities of Defined Benefit and Defined Contribution Plans. By California Public Employees Retirement System. (The System, Sacramento, California) January 2005. 2 p.

Full Text at: www.calpers.ca.gov/eip-docs/about/press/news/definedplans/fast-facts.pdf

["A defined contribution plan would not solve the State's fiscal problems.... Defined contribution plans don't cost less, they cost more.... Defined contribution plans will cause a deterioration in public service and will hamper recruitment retention and make the state attract less capable, not more capable work force.... Eliminating the public pension systems would cripple an enormous economic engine for California."]

[Request #S59841]

Return to the Table of Contents

HUMAN SERVICES

SOCIAL SECURITY

The Outlook for Social Security. By Noah Meyerson and others, Congressional Budget Office. A CBO Study. (The Office, Washington, DC) June 2004. 49 p.

Full Text at: www.cbo.gov/ftpdocs/55xx/doc5530/06-14-SocialSecurity.pdf

["This report presents CBO's outlook for Social Security over the next 100 years under current law. Projections of various measures of Social Security's finances all show that outlays will continually grow faster than revenues, resulting in significant annual deficits in the system. Projections of benefit levels indicate that future generations will receive higher retirement benefits than current beneficiaries do, even after adjustment for inflation."]

[Request #S3540]

Return to the Table of Contents

Setting the Record Straight: Social Security Works for Latinos. By Bernard Wasow, The Social Security Network, The Century Foundation. (The Foundation, New York, New York) May 2002. 3 p.

Full Text at: www.socsec.org/facts/Record_Straight/Latinos.pdf

["This short piece looks at the erroneous claims that privatizers use to promote the belief that the privatization of Social Security is best for minorities in general and Latinos in particular." Moving Ideas (May 23, 2002).]

[Request #S5162]

Return to the Table of Contents

Social Security Reform: Analysis of Reform Models Developed by the President's Commission to Strengthen Social Security. GAO-03-310. (The Office, Washington,DC) January 2003. 109 p.

Full Text at: www.gao.gov/new.items/d03310.pdf

["Hard Decisions Await Congress on Social Security: The Social Security system will require benefit cuts, tax increases or a higher retirement age to remain financially viable, regardless of whether workers are allowed to put some of their payroll taxes into personal investment accounts.... The GAO said several trillion dollars would be needed, with or without the accounts." Associated Press (January 15, 2003) 1.]

[Request #S7843]

Return to the Table of Contents

Social Security Reform: Information on Using a Voluntary Approach to Individual Accounts. By the U.S. General Accounting Office. GAO-03-309. (The Office, Washington, DC) March 10, 2003. 72 p.

Full Text at: www.gao.gov/new.items/d03309.pdf

["GAO focuses on the issues that pertain specifically to a volunteer approach: (1) how voluntary plans can affect individuals; (2) how they could affect the total cost of the retirement system; and (3) how the role of educational efforts relates to the participation decision.]

[Request #S7940]

Return to the Table of Contents

Social Security: Issues Relating to Noncoverage of Public Employees: Statement of Barbara D. Bovbjerg. Presented to U.S. House of Representatives Subcommittee on Social Security, Committee on Ways and Means. Prepared by the U.S. General Accounting Office. GAO-03-710T (The Office, Washington, DC) May 1, 2003. 14 p.

Full Text at: frwebgate.access.gpo.gov/cgi-bin/useftp.cgi?IPaddress=162.140.64.21&filename=d03710t.pdf&directory=/diskb/wais/data/gao

["California is especially hard hit by the two clauses in the Social Security Act, called the Government Pension Offset and the Windfall Elimination Provision. More than 125,000 retirees in the state are affected by the provisions." Sacramento Bee (May 2, 2003) A3.]

[Request #S8105]

Return to the Table of Contents

Social Security Lifts 13 Million Seniors Above the Poverty Line: A State-By-State Analysis. By Arloc Sherman and Isaac Shapiro, Center on Budget and Policy Priorities. (The Center, Washington, DC) February 24, 2005. 3 p.

Full Text at: www.cbpp.org/2-24-05socsec.pdf

["This analysis of Census data shows that nationwide, Social Security benefits lift nearly 13 million seniors age 65 and older above the poverty line. These figures reflect a three-year average for the period from 2000 through 2002. The report provides data on the poverty-reducing effects of Social Security in each state."]

[Request #S50845]

Return to the Table of Contents

Social Security: The Most Important Anti-Poverty Program for Children. By Heather Boushey, Center for Economic and Policy Research. (The Center, Washington, DC) March 28, 2005. 4 p.

Full Text at: www.cepr.net/publications/social_security_children_2005_03.pdf

["During the Social Security debates, proponents of privatization often focus on the need for a 'secure retirement system for future generations' and 'saving Social Security for sake of our children.' However, the current Social Security system is already the country’s most important anti-poverty program for the nation’s children. This study found that more low-income children live in families that receive a Social Security check than in families that receive a check from the Temporary Assistance to Needy Families (TANF) program." CEPR Press Release (March 29, 2005).]

[Request #S50937]

Return to the Table of Contents

Whose Security? What Social Security Means to Children and Families. By Nancy K. Cauthen, National Center for Children in Poverty. (The Center, New York, New York) February 2005. 10 p.

Full Text at: www.nccp.org/media/wsw05a-text.pdf

["Although Social Security is the single largest program providing support to American children, the debate over privatization has focused almost entirely on changes in benefits for retirees. Over 5 million children in the United States benefit from Social Security, either directly as beneficiaries or indirectly as members of households that receive a monthly Social Security check. Of the 48 million people who currently receive Social Security benefits, one in three is not a retiree; one in 15 is a child under the age of 18."]

[Request #S20050623]

Return to the Table of Contents

Social Security: Women, Children and the States. By the National Women's Law Center. (The Center, Washington, DC) February 2005. 61 p.

Full Text at: www.nwlc.org/pdf/sswomen&states2005.pdf

["The impact of Social Security reaches beyond retirees. The program also provides disability and life insurance protection for workers and their families. Nationally, 50 percent of Social Security beneficiaries receive all or part of their benefit either as the child, spouse or widow/widower of a worker, or as a disabled worker, according to this study. Because all Social Security benefits are based on the same formula, cuts in the benefits for retired workers — for example, shifting from wage-indexing to price-indexing benefits — would mean cuts in benefits for widows, children who receive benefits when a working parent is disabled or dies prematurely, and disabled workers." Connect for Kids Weekly (February 14, 2005).]

[Request #S20050624]

Return to the Table of Contents