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Author: Martin S. Feldstein Publisher: ISBN: Category : Retirement income Languages : en Pages : 34
Book Description
This paper shows how a new type of derivative product that could be provided by private financial markets could in principle be used to guarantee that an investment-based Social Security reform provides at least the level of real retirement income that is projected in current Social Security rules. In effect, future retirees could purchase a put option' that guarantees that the future retirement benefit will not fall below the level projected in current Social Security law or some other chosen level. To pay for this guarantee, they would agree to give up the part of the annuity payments which exceeds a given level, effectively selling a call option on the stream of payments. This market-based approach could be completely voluntary, leaving each individual to decide what level of guarantee he wants. The higher the minimum guarantee that the individual chooses, the more of the potentially higher returns he must give up. The financial market can thus tailor each individual's product to his own risk preferences. Alternatively, the government might require that any product that is sold as part of the investment-based Social Security reform must include at least some such market-based guarantee. Our analysis calculates some of the tradeoffs that could be provided in today's financial markets. We show that it is feasible to protect future benefits equal to those projected in current law with a combination of the current payroll tax rate and Personal Retirement Account savings equal to 2.5 percent of covered earnings. Raising the savings rate to 3.0 percent increases substantially the amount of the return that the individual can keep, raising it to 145 percent of the currently projected level of benefits. Reducing the guarantee level to 90 percent of the projected future benefits would increase this upside potential to 150 percent of the currently projected level of benefits with a 2.5 percent saving rate and 195 percent of the currently projected benefits with a 3.0 percent saving rate.
Author: Martin S. Feldstein Publisher: ISBN: Category : Retirement income Languages : en Pages : 34
Book Description
This paper shows how a new type of derivative product that could be provided by private financial markets could in principle be used to guarantee that an investment-based Social Security reform provides at least the level of real retirement income that is projected in current Social Security rules. In effect, future retirees could purchase a put option' that guarantees that the future retirement benefit will not fall below the level projected in current Social Security law or some other chosen level. To pay for this guarantee, they would agree to give up the part of the annuity payments which exceeds a given level, effectively selling a call option on the stream of payments. This market-based approach could be completely voluntary, leaving each individual to decide what level of guarantee he wants. The higher the minimum guarantee that the individual chooses, the more of the potentially higher returns he must give up. The financial market can thus tailor each individual's product to his own risk preferences. Alternatively, the government might require that any product that is sold as part of the investment-based Social Security reform must include at least some such market-based guarantee. Our analysis calculates some of the tradeoffs that could be provided in today's financial markets. We show that it is feasible to protect future benefits equal to those projected in current law with a combination of the current payroll tax rate and Personal Retirement Account savings equal to 2.5 percent of covered earnings. Raising the savings rate to 3.0 percent increases substantially the amount of the return that the individual can keep, raising it to 145 percent of the currently projected level of benefits. Reducing the guarantee level to 90 percent of the projected future benefits would increase this upside potential to 150 percent of the currently projected level of benefits with a 2.5 percent saving rate and 195 percent of the currently projected benefits with a 3.0 percent saving rate.
Author: James M. Poterba Publisher: MIT Press ISBN: 9780262661225 Category : Business & Economics Languages : en Pages : 216
Book Description
Based on a National Bureau of Economic Research conference, Tax Policy and the Economy is a timely review of issues in the current tax debate. Focusing on the economic effects of tax policies, written in a nontechnical style accessible to policymakers, corporate managers, lawyers and economists, each article demonstrates how economic research can make an important contribution to tax policy debates.
Author: Olivia S. Mitchell Publisher: OUP Oxford ISBN: 0191532959 Category : Business & Economics Languages : en Pages : 360
Book Description
This book, the first in a new series produced by the Pension Research Council of the Wharton School in collaboration with Oxford University Press, explores ways to enhance retirement security in a volatile financial environment. Mitchell and Smetters begin by assessing the myriad retirement risks confronting employees, retirees, employers, and governments, and it shows how stakeholders can work to reinvent pensions that perform well in a competitive global setting. Contributors then indicate how pension systems can be better designed to help protect against these risks. Of special interest is a discussion of new financial products and structures to meet and manage challenges to old-age security. Examples considered include pension investment guarantees and hedges, adapting catastrophe bonds to the pension context, and key regulatory structures and portfolio requirements designed to protect unwary or unwitting pension participants. The contributors draw important lessons for a wide range of countries, drawing from both developed and developing market experiences. Contributors include world-famous finance experts and risk management faculty, development economists, pension regulators, and pension consultants.
Author: Alfred C. Mierzejewski Publisher: Rowman & Littlefield ISBN: 1498521177 Category : History Languages : en Pages : 445
Book Description
A History of the German Public Pension System: Continuity amid Change provides the first comprehensive institutional history of the German public pension system from its origins in the late nineteenth century to the major reform period in the early twenty-first century. Relying on a wide range sources, including many used for the first time, this study provides a balanced account of how the pension system has coped with major challenges, such as Germany’s defeat in two world wars, inflation, the Great Depression, the demographic transition, political risk, reunification, and changing gender roles. It shows that while the pension system has changed to meet all of these challenges, it has retained basic characteristics—particularly the tie between work, contributions, and benefits—that fundamentally define its character and have enabled it to survive economic and political turmoil for over a century. This book also demonstrates that the most serious challenge faced by the pension system has consistently been political intervention by leaders hoping to use it for purposes unrelated to its mission of providing the insured with secure and adequate retirement income.
Author: Jeffrey R. Brown Publisher: University of Chicago Press ISBN: 0226076504 Category : Business & Economics Languages : en Pages : 473
Book Description
Social Security Policy in a Changing Environment analyzes the changing economic and demographic environment in which social insurance programs that benefit elderly households will operate. It also explores how these ongoing trends will affect future beneficiaries, under both the current social security program and potential reform options. In this volume, an esteemed group of economists probes the challenge posed to Social Security by an aging population. The researchers examine trends in private sector retirement saving and health care costs, as well as the uncertain nature of future demographic, economic, and social trends—including marriage and divorce rates and female participation in the labor force. Recognizing the ambiguity of the environment in which the Social Security system must operate and evolve, this landmark book explores factors that policymakers must consider in designing policies that are resilient enough to survive in an economically and demographically uncertain society.
Author: Joaquin Jay Gonzalez III, Publisher: McFarland ISBN: 1476638829 Category : Social Science Languages : en Pages : 315
Book Description
There are more senior citizens in the U.S. today than ever before. Public services for seniors are rapidly changing and expanding as this diverse population ages. This collection of essays describes key developments in services being provided in cities across the nation. Topics include seniors and the U.S. government; health and wellness; longevity; caregiving; housing and accommodations; Social Security and finance; immigrant, minority and LGBT issues, and life-long learning and technology.
Author: Martin Feldstein Publisher: University of Chicago Press ISBN: 0226241912 Category : Political Science Languages : en Pages : 515
Book Description
Social Security in the United States and in Europe is at a critical juncture. Through the essays assembled in Social Security Pension Reform in Europe, Martin Feldstein and Horst Siebert, along with a number of distinguished contributors, discuss the challenges facing Social Security reform in the aging societies of Europe. A remarkable range of European nations—Germany, France, Finland, the Netherlands, Poland, Romania, Italy, Sweden, the United Kingdom, and Hungary—have implemented or are about to implement mixed Social Security systems that combine a traditional defined benefit of the pay-as-you-go system with an individual retirement account defined contribution of a capital-funded system. The essays here highlight the problems that the European pension reform process faces and how it differs from that of the United States. This timely volume will significantly enrich the debate on pension reform worldwide.
Author: Carmelo Mesa-Lago Publisher: University of Pittsburgh Pre ISBN: 082297620X Category : History Languages : en Pages : 373
Book Description
A comprehensive and sophisticated study of the relationship between social security policy and inequality in Latin America. Individual case studies of Chile, Uruguay, Peru, Argentina, and Mexico are presented, that provide a historical analysis of each country's social security policy, the pressure groups involved, the present structure of the systems, and a statistical examination of the inequality among these pressure groups.
Author: Martin S. Feldstein
Author: Martin S. Feldstein
Author: James M. Poterba
Author: Olivia S. Mitchell
Author: Stephen J. Kay
Author: Alfred C. Mierzejewski
Author: Jeffrey R. Brown
Author: Joaquin Jay Gonzalez III,
Author: Max Horlick
Author: Martin Feldstein
Author: Carmelo Mesa-Lago