Friday, May 29, 2015

New papers from the Social Science Research Network

"Are US Workers Ready for Retirement? Trends in Plan Sponsorship, Participation, and Preparedness" 
Journal of Pension Benefits, Ferenczy Benefits Law Center, Winter 2015. pp. 25-39
TERESA GHILARDUCCI, Schwartz Center for Economic Policy Analysis (SCEPA), The New School - Department of Economics, University of Notre Dame - Department of Economics
Email: ghilardt@newschool.edu
JOELLE SAAD-LESSLER,
The New School for Social Research
Email: lesslerj@newschool.edu
KATE BAHN,
The New School for Social Research
Email: katebahn@gmail.com

Most workers need a workplace retirement plan to supplement their Social Security to achieve an adequate retirement income — defined here as a 70 percent replacement rate at age 65. However, only 44 percent of workers in the United States participate in a retirement plan at work. The lack of retirement readiness is not caused by the Great Recession but by two structural trends: not enough people have access to a retirement plan at work and, when they do, the amounts saved are often not enough to ensure adequate retirement living standards.

Between 1999 and 2011, the availability, distinct from participation, of employer-sponsored retirement plans in the United States declined from 61 percent to 53 percent. [Ghilarducci, Teresa and Saad-Lessler, Joelle. “Explaining the Decline in Offer Rate of Employer Retirement Plans Between 2001-2012,” Schwartz Center for Economic Policy Analysis and Department of Economics, The New School for Social Research, Working Paper Series, 2014. Forthcoming in the Industrial and Labor Relations Review.] All workers, regardless of sex, race, industry, firm size, and union status, experienced a drop in coverage rates. However, being in a union was somewhat protective; union workers experienced a 6 percent drop in coverage while non-union worker rates dropped 14 percent.

KOKOBE SEYOUM ALEMU, Ambo University
Email: kokseyoum@yahoo.com
The research study evaluated pension fund management of Ethiopian social security agency. To attain these objectives, eleven years’ financial statements were used as a secondary data and different ratio analysis was carried out to examine the status of fund management of Ethiopian social security agency. Those ratios shows that the organization current assets is very much large when compared with its current liabilities which shows the organization is in the best position to pay off all of its current liability. Again, the finding displays the asset turnover has been decreasing from time to time which shows under utilization of companies asset. In addition to this, large percentage of the asset of social security is financed by equity and small percentage is financed by debt. Lastly, the analysis puts that the organization is absorbent up to 50% of its income. That means up to 50% of them is consumed by its expenses.

"Accounting for Pension Flows and Funds: A Case Study for Accounting, Economics and Public Finances" 
EGPA XII Permanent Study Group Public Sector Financial Management Workshop, Zurich-Winterthur (Switzerland), May 7-8, 2015
YURI BIONDI, French National Center for Scientific Research (CNRS)
Email: yuri.biondi@gmail.com
MARION SIERRA,
Université Paris Dauphine
Email: marion.sierra-torre@dauphine.fr

Accounting for pension obligations has been co-evolving with political and financial economic strategies aimed to prompt and promote active financial markets and institutional investors, as well as transnational harmonisation and convergence of accounting standards between private and public sectors. In this context, our article provides a theoretical analysis of accounting for pension obligations, drawing upon a comprehensive review of existing practice and regulation. The latter are still inconsistent with the actuarial representation that has been adopted by the IPSAS 25 (Employee Benefits) and the IAS 19 (Employee Benefits). According to our frame of analysis, a variety of viable modes of pension management exists and shall be acknowledged by accounting and financial regulations. Accounting (and financial economic) concepts and regulatory recommendations are then elaborated in view to clarify and improve on pension protection, that is, the assurance of continued provision of pension payments at their agreed levels under viable alternative modes of pension management. 
Read more!

Thursday, May 28, 2015

Capretta: “What is the Huckabee plan for Social Security?”

My AEI colleague Jim Capretta writes for National Review on former Arkansas Gov. Mike Huckabee’s unusual position regarding Social Security reform:

Former Arkansas governor Mike Huckabee is setting out on a populist course in hopes of securing the Republican nomination for president in 2016. Among other things, he has come out against the next round of free-trade agreements. He also wants to be seen as the GOP defender of middle-class entitlement programs. In announcing his candidacy, he said, “If Congress wants to take away someone’s retirement, let them end their own congressional pensions — not your Social Security.”
Huckabee’s populism is music to the ears of some conservatives in Washington. They want the GOP to adjust its economic message going into 2016. They argue that the Republican nominee for president will need to do much better among working-class voters than 2012 nominee Mitt Romney, especially in the Midwest.
They are right about that, of course. But there’s got to be a better way to go about it than Huckabee-style populism.

Check out the whole article here. Read more!

Tuesday, May 26, 2015

New article: “Are Americans of All Ages and Income Levels Shortsighted About Their Finances?”

The Center for Retirement Research at Boston College has released a new Issue in Brief:

“Are Americans of All Ages and Income Levels Shortsighted
About Their Finances?”

by Steven A. Sass and Jorge D. Ramos-Mercado

The brief’s key findings are:

  • A recent CRR analysis of a FINRA survey found that financial satisfaction depends much more on meeting day-to-day, rather than distant, needs.
  • This study explores whether households of all ages and income levels are also shortsighted.
  • The results confirm that distant needs, like retirement saving, consistently take a back-seat to more immediate concerns.
  • The results underscore the importance of making it easy and automatic for Americans to save for distant goals that may otherwise receive little attention.

This brief is available here. Read more!

Monday, May 25, 2015

Social Security Bulletin, Vol. 75 No. 2

Social Security Bulletin, Vol. 75 No. 2

Released May 2015.

Download entire publication

Adult OASDI Beneficiaries and SSI Recipients Who Need Representative Payees: Projections for 2025 and 2035

by Chris E. Anguelov, Gabriella Ravida, and Robert R. Weathers II

This article examines how changing demographics might affect the number of adult OASDI beneficiaries and SSI recipients who need a representative payee to manage their benefit payments. The authors use administrative data and projections from the Modeling Income in the Near Term (MINT) model to project the number of beneficiaries who will need a representative payee, with detail by beneficiary age, program type, and type of payee. Demand for representative payees is projected to grow over the next two decades as the retired-worker population increases. Because retired-worker beneficiaries are less likely than disabled-worker beneficiaries to have a family member serve as their representative payee, the Social Security Administration will need to increase efforts to recruit and monitor nonfamily representative payees. The authors describe ongoing agency efforts to prepare for the projected growth in demand for representative payees.

Employment, Earnings, and Primary Impairments Among Beneficiaries of Social Security Disability Programs

by David R. Mann, Arif Mamun, and Jeffrey Hemmeter

This article examines the employment and earnings of Disability Insurance beneficiaries and working-age Supplemental Security Income recipients across detailed primary-impairment categories. The authors use 2011 data from linked Social Security administrative files to identify which beneficiaries and recipients are most likely to have earnings and to have higher levels of earnings. They find substantial heterogeneity in these outcomes across primary impairments.

Retirement Plan Coverage by Firm Size: An Update

by Irena Dushi, Howard M. Iams, and Jules Lichtenstein

This article provides an update of the relationship between pension plan coverage and firm size among private-sector workers, using data from the Survey of Income and Program Participation (SIPP) for 3 years: 2006, 2009, and 2012. Following previous work, our measures of pension coverage and participation take into account, and correct for, survey-response errors in the SIPP by using information in the W-2 records regarding tax-deferred earnings to defined contribution plans. The authors' findings show that compared with 2006, the offer and participation rates of any pension plan slightly increased in 2009 and 2012. Throughout the 2006–2012 period, offer and participation rates differed substantially by firm size, whereas there was little difference in the take-up rate.

The Supplemental Poverty Measure (SPM) and Nonaged Adults: How and Why the SPM and Official Poverty Estimates Differ

by Benjamin Bridges and Robert V. Gesumaria

In 2011, the Census Bureau released its first report on the Supplemental Poverty Measure (SPM). The SPM addresses many criticisms of the official poverty measure, and its intent is to provide an improved statistical picture of poverty. This article examines the extent of poverty identified by the two measures. The authors present a detailed examination of poverty among nonaged adults (those aged 18–64). For a more comprehensive view of poverty and comparison purposes, some findings are presented for younger and older segments of the population.

Read more!

Friday, May 22, 2015

Website updates from SSA’s Office of Retirement Policy (ORP)

We are pleased to share with you the updated Social Security Administration Office of Retirement Policy website: http://www.ssa.gov/retirementpolicy/

What Has Been Updated?

· New updates based on the Modeling Income in the Near Term, Version 7 (MINT7) microsimulation model:

· Current Law Fact Sheets

· Population Profiles—Highlight the characteristics of certain populations, such as veteran beneficiaries.

· Population Projections—Show how certain populations, such as survivor-only beneficiaries, are projected to look in the future.

· Program Explainers—Explain aspects of the Social Security program, such as the minimum benefit.

· Policy Option Projections—Analyses of how proposed changes to Social Security program might affect future beneficiaries and benefit levels.

· Projection Methodology—An explanation of the MINT7 model and the definitions we use.

What Else Can I Find There?

Need More Information?

Contact us at office.of.retirement.policy@ssa.gov.

Want E-Mail Updates?

Sign up here to receive an e-mail when we release new or updated content.

Website Feedback

We encourage and need your feedback to help make the content and design of this website more useful. Please send all comments to op.webmaster@ssa.gov (and note that you are commenting on the Office of Retirement Policy website).

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Early Social Security claiming declines

The Wall Street Journal reports on new research from the Center for Retirement Research at Boston College showing that the percentage of Americans filing for early – meaning, reduced – Social Security retirement benefits has fallen in recent years.

A new study from the Center for Retirement Research at Boston College—titled Trends in Social Security Claiming —finds that, in 2013, 36% of men and 40% of women who turned 62 claimed Social Security. Sixty-two is the youngest age at which most people become eligible for benefits.

Those figures differ significantly from the numbers published by the Social Security Administration, which estimated that 42% of men and 48% of women who claimed retiree benefits in 2013 were 62.

What’s more, according to the Boston College study, “the share of people claiming Social Security retired-worker benefits when they attain age 62 has been falling since the mid-1990s…a decline [that] is fully consistent with the increase in the average retirement age.”

Read more!

Sen. Hatch Introduces Three Disability–Related Bills

Sen. Orin Hatch (R-UT) introduced three pieces of legislation relating to the Social Security Disability Insurance program, which is facing insolvency next year. Hatch's bills are companion legislation to bills already introduced in the House by Rep. Sam Johnson (R-TX).
These include:

  • The Guiding Responsible and Improved Disability Decisions (GRIDD) Act, S. 1194, requires the Social Security Administration (SSA) to update its medical and vocational "grids" used by disability decision makers. The "grid rules" use age, education, past work experience and capacity for work to create guidelines that assist in determining whether an individual is or is not disabled. SSA published the grid rules in 1979, but the rules have not be updated to stay current with the modern workplace or developments in medicine and technology. This update would also include rules related to applicants' inability to communicate in English, based on a recent instance in Puerto Rico where it was reported the "grid rules" in place would prevent Spanish-speaking claimants from finding work. Additional background available at:http://www.finance.senate.gov/download/?id=1756E071-D2BD-4038-B86B-418FB6797B35.
  • The Promoting Opportunity through Informed Choice Act, S. 1197, provides support for disability beneficiaries that want to return to work by requiring the SSA to develop public online tools to assist beneficiaries in determining the impact of earnings on their eligibility for benefits they receive. Additional background available at: http://www.finance.senate.gov/download/?id=ACAD09BF-D21D-4019-BE94-9F664F37316F.
  • The Disability Evidence Integrity Act, S. 1198, deters the SSA from making determinations on disabled individuals to receive DI benefits based on evidence provided by individuals who have been convicted of a felony or are expelled from participating in any Federal health care program. These individuals are sometimes referred to as "dirty docs." Additional background available at:http://www.finance.senate.gov/download/?id=FF3708A8-8632-4090-A15A-4453159B2CAB.
Hatch said: "For far too long, the SSDI program has failed to keep up with the rapid changes in medicine, technology and education," Hatch said. "These bills are the first step in modernizing the SSDI program to make it more effective and efficient for both beneficiaries and taxpayers. With the trust fund expected to be exhausted in 2016, Congress should continue to examine how to address the financial challenges facing SSDI while also looking for ways to improve the program for beneficiaries." Read more!