Meeting of the 2019 Technical Panel on Assumptions and Methods

The 2019 Social Security Technical Panel on Assumptions and Methods will hold its third public meeting Friday, January 25^th, 2019 from 9:30am to 2:30pm. The meeting will be held at Social Security Administration Headquarters in Baltimore(6401 Security Blvd.; Gwynn Oak, MD 21207

Room: 1700A Robert M. Ball Building). The meeting agenda is attached to this invitation.

Because of security considerations at SSA and space limitations, those wishing to attend in person should RSVP to the Social Security Advisory Board staff: joel.feinleib@ssab.gov , call our office at 202-475-7700 or reply to this email by Friday, January 18. Additional details for entry to SSA facilities and parking will communicated next week.

For those who cannot attend in person, there will be a teleconference line available for the entirety of the meeting 9:30am-2:30. Please RSVP with a request for the teleconference information. Material presented to the panel at the meeting will be made available by the meeting time on the panel’s public information page (see below).

Information on the 2019 Technical Panel on Assumptions and Methods can be found on the panel’s public information page. Meeting agendas will be posted to the site approximately one week before meeting dates and material presented at meetings, such as handouts or presentation slides will posted following the meeting.

Attendees who require a reasonable accommodation,  should please call 202-475-7700 at least three days before the meeting date.

Meeting Agenda

9:30am -11:00am Economic assumptions and methods
Presentation: Office of the Chief Actuary

11:00am-12:30pm Trends in economic inequality and implications for Social Security
Presentation: David Deming, Professor of Public Policy, Harvard
Kennedy School; Professor of Education and Economics, Harvard
Graduate School of Education

12:30pm-1:00pm Lunch

1:00pm-2:30pm Technology and the future of work and employment
Presentation: Michael Chui, Partner, McKinsey and Company,
and McKinsey Global Institute

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New Issue Brief: “What Financial Risks Do Retirees Face in Late Life?”

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

What Financial Risks Do Retirees Face in Late Life?

by Matthew S. Rutledge and Geoffrey T. Sanzenbacher

IB#19-1

The brief’s key findings are:

• As life expectancy rises, more retirees will face late-life financial risks, including: high health costs, financial mistakes due to cognitive decline, and widowhood.
• To date, the research literature suggests that these risks severely affect only a minority of retirees, but the impact may become more widespread in the future.
• The reasons include growing health costs; the rise of 401(k)s, which can be more vulnerable to fraud; and the declining role of Social Security’s widow benefits.

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Does Early Retirement Cause Earlier Death?

Early Retirement and Mortality Rates of Blue-Collar Men

For blue-collar male workers in Austria, an extra year of early retirement, induced by a policy change, was associated with an increase in the probability of death before age 73 of 1.85 percentage points.

Many workers dream of retiring as early as possible to pursue travel, leisure, sport, and other pursuits. But the research findings in Fatal Attraction? Extended Unemployment Benefits, Labor Force Exits, and Mortality (NBER Working Paper No. 25124), a study by Andreas Kuhn, Stefan Staubli, Jean-Philippe Wuellrich, and Josef Zweimüller, suggest that some individuals, particularly men, might want to postpone retirement if possible. Studying a temporary change in unemployment insurance rules in Austria which allowed workers to retire early, they find that men who retired before the normal retirement age experienced an increased risk of premature death. They do not find any statistically significant effect of early retirement on women.

Many nations are grappling with aging populations and the strains that pension and medical-care obligations place on government budgets. Some are considering changes to retirement programs, such as raising the age of eligibility or reducing benefits. The effect of such changes on the health and well-being of the elderly is a subject of ongoing debate.

To shed light on this question, the researchers analyze a unique public program in Austria in the late 1980s and early 1990s that was adopted when that nation's steel sector underwent dramatic downsizing. The shock affected tens of thousands of workers and their family members, and to cushion the economic blow to older workers, the Austrian government implemented the Regional Extended Benefits Program (REBP). This program effectively allowed workers to take early retirement via disability insurance or old-age pension programs. The program was only available in some regions of the country.
Using information from the Austrian Social Security Database, the researchers were able to compare the employment histories, incomes, gender, age, retirement dates, and age at death of those who took early retirement and those who were eligible but did not. They ultimately compiled information on 310,440 men and 144,532 women — excluding those from the steel sector — and compared data from REBP — eligible regions and nearby non-REBP regions.

The program induced a significant increase in early retirement. When the researchers examined the mortality rates of those who took early retirement, they found that an additional year in early retirement increased a man's probability of death before age 73 by 1.85 percentage points — equivalent to a relative increase of 6.8 percent — and reduced the age at death by 0.2 years. For women, early retirement was not associated with elevated mortality, a finding that is in line with previous research by others.

Men in blue-collar occupations, men with low work experience, and men who had some pre-existing health impairment displayed higher mortality effects than men in white-collar occupations. An additional year in early retirement increased the probability of death before age 73 by 1.91 percentage points for blue-collar men, 3.45 percentage points among men who have spent some time on sick leave, and by 2.42 percentage points among men with low work experience.

To check the robustness of their findings, the researchers analyzed data from before and after the early retirement program and found no differences in mortality and early retirement trends between those two periods. They also found that the changes in lifetime income associated with early retirement were negligible, particularly when generous government old-age benefits were counted, and that they could not explain the increased mortality among certain groups of the population. The researchers suggest that lifestyle changes may explain the study's mortality findings.

— Jay Fitzgerald

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