Tuesday, October 26, 2010

Academy of Actuaries says: Raise the Social Security Retirement Age

Actuaries to Fiscal Commission: Increase the Retirement Age for Social Security

WASHINGTON – 25 Oct. 2010 – The American Academy of Actuaries is urging the National Commission on Fiscal Responsibility and Reform to address the financial condition of Social Security and to restore actuarial balance to the program by including an increase in the retirement age in its final recommendations. The actuaries said that increasing life expectancy has led to an expansion of lifetime benefits and system costs, but that an increase in the retirement age would help curb this cost growth.

"Longevity has increased and continues to increase meaning retirees will be spending more time collecting benefits in the system than prior generations," wrote Tom Terry, chairperson of the American Academy of Actuaries Public Interest Committee.  "Increasing the retirement age can contribute significantly to stemming this trend and make the program solvent and sustainable."

The actuaries said that workers could still retire with approximately the same degree of retirement security, if a change in the retirement age causes workers to delay retirement. They recommend that an increase in the retirement age be phased in gradually over an extended time frame to accommodate the changes in retirement behavior that would be necessary to make the policy successful. The actuaries acknowledged that there is potential for certain populations to be adversely affected, but that changes to Social Security can be coupled with other policy options to address these concerns.

The complete letter from the American Academy of Actuaries Public Interest Committee to the fiscal commission is available at: http://www.actuary.org/pdf/Fiscal_Commission_Retirement_Age_102510.pdf

The actuaries have been advocating for increasing the retirement age since August 2008, when it released its first position statement on behalf of the U.S. actuarial profession. The statement is available at: http://actuary.org/pdf/socialsecurity/statement_board_aug08.pdf

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