When Bad Things Happen to Good Pensions.
Teresa Ghilarducci.
- Dollars & Sense, 2005.
- SIRS Enduring Issues 2006. Article 33, Business, 1522-3191; .
Articles Contained in SIRS Enduring Issues 2006. Originally Published: When Bad Things Happen to Good Pensions, May/June 2005; pp. 10+.
"February [2005] was a momentous month for American workers' retirement security. Just days after President [George W.] Bush called for the partial privatization of Social security, his administration proposed major modifications to the system that guarantees employer-sponsored defined-benefit pensions. Both initiatives break with longstanding 'insurance' models of old-age income security and accelerate the use of individual accounts. Defined-benefit pensions, like Social Security, provide a modest but steady stream of income for the duration of a retiree's life. Both systems are based on collective risk sharing: they gather premium contributions from populations facing similar risks--such as old age or disability--and provide a guaranteed stream of income to individuals when those risks befall them." (DOLLARS & SENSE) The article examines the administration's proposals for reforming defined-benefit pensions and the Pension Benefit Guaranty Corporation (PBGC) and concludes that "the defined-benefit pension system needs to be strengthened and expanded--not undermined. The president, and officials at the PBGC who are now supporting the president's proposals, are in an awkward position: they are purportedly saving an agency by eliminating its reason to exist."
1522-3191;
Pension Benefit Guaranty Corporation
Defined benefit pension plans Defined contribution pension plans Pensions Social security Social security--Forecasting Social security--Privatization