Reimagining Pensions: The Next 40 Years

The 1964 termination of the Studebaker Corporation's pension plan wiped out or significantly reduced the pensions of thousands of the automaker's employees and retirees. In response, the US Congress passed the 1974 Employee Retirement Income Security Act (ERISA), a monumental and revolutionary piece of legislation crafted to address corporate pension underfunding. The bill also set new rules regarding defined benefit (DB) and other retirement plans, and it established the Pension Benefit Guaranty Corporation as a government-run insurer to serve as a backdrop to U.S. corporate pensions. Despite the bill's far-ranging scope, in the decades since its passage, it has become evident that ERISA failed to achieve many of its intended objectives. The corporate pension scene today is in turmoil, and most private employers have terminated or frozen their traditional DB plans. In their place, employers are increasingly substituting defined contribution (DC) retirement saving plans, which pose a new set of responsibilities on employees and their firms. This volume investigates how and why traditional approaches to pension risk management have failed, and we also explore the new mechanisms required to strengthen retirement security for the future. Lessons from international experience are also included, ranging from Singapore to Switzerland, and the Netherlands to Australia. Contributors to this volume - David Blitzstein, Blitzstein Consultancy A. Lans Bovenberg, Professor of Economics at Tilburg University Monika Butler, Professor of Economics and Public Policy at the University of St. Gallen Rafal Chomik, Senior Research Fellow, University of New South Wales Julia Coronado, Chief Economist for Graham Capital Management Don Fuerst, American Academy of Actuaries' Senior Pension Fellow Jonathan P. Goldberg, Project Attorney, Employee Benefits and Executive Compensation practice group of Covington & Burling LLP Benjamin Goodman, Director and Actuary at TIAA-CREF Benjamin H. Harris, Policy Director of The Hamilton Project Benedict S. K. Koh, Professor of Finance, Singapore Management University Roel Mehlkopf, postdoctoral researcher at Tilburg University Olivia S. Mitchell, International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania Alicia H. Munnell, Peter F. Drucker Professor of Management Sciences, Boston College Robert S. Newman, partner in the Employee Benefits and Executive Compensation practice of Covington & Burling LLP Theo E. Nijman, Professor on Econometrics and Finance at Tilburg University Pamela Perun, psychologist and a lawyer Andrew Peterson, Staff Fellow for Retirement Systems at the Society of Actuaries John Piggott Director of the ARC Centre of Excellence in Population Ageing Research (CEPAR), University of New South Wales Anna Rappaport, actuary, consultant, author, and speaker, David P. Richardson, Senior Economist at the TIAA-CREF Institute Matthew S. Rutledge, research economist at the Center for Retirement Research at Boston College Richard C. Shea, chair of Covington & Burling LLP's Employee Benefits and Executive Compensation practice Eugene C. Steuerle, Richard B. Fisher Chair at the Urban Institute Jack VanDerhei, Research Director of the Employee Benefit Research Institute (EBRI) John Vine, senior member and former head of the Employee Benefits Group at Covington & Burling LLP Anthony Webb, Senior Research Economist at the Center for Retirement Research at Boston College