SOCIAL SECURITY, PENSIONS & RETIREMENT INCOME eJOURNAL "Pensions in Nigeria: The Performance of the New System of Personal Accounts" International Social Security Review, Vol. 64, No. 1, pp. 1-14, 2011 BERNARD H. CASEY, University of Warwick - Faculty of Social Studies In 2004, Nigeria copied the 1981 Chilean pension reform and established a funded system based upon personal accounts. The new system was neither appropriate for a country such as Nigeria, nor did it meet aspirations of improving pension coverage or helping economic growth. The current financial and economic crisis hit the scheme in so far as it hit stock values. However, more important has been the negative real interest rates that can be earned on government bonds and on bank deposits where the majority of contributions are invested. Bank scandals and rising fiscal deficits do not breed confidence in the system or the government's ability to deliver meaningful benefits in old age. "Multi-Pillared Social Insurance Systems: The Post-Reform Picture in Chile, Uruguay and Brazil" International Social Security Review, Vol. 64, No. 1, pp. 53-71, 2011 FLORENCIA ANTA, affiliation not provided to SSRN This article focuses on an analysis of social insurance models and reforms in Chile, Uruguay and Brazil. Noting that these three countries are following different reform trajectories, the article explores trends in the restructuring of each of these insurance systems across the course of successive reforms. In the systems, different trends are supporting a closer link between contributions and benefits, according growing importance to private individual accounts and favouring the expansion of the role played by social assistance. These trends all suggest a move towards various forms of multi-pillared social insurance, but with uncertain results in terms of redistribution and the dynamics of the fundamental objectives of social insurance. "Working Life and Retirement Pensions in Spain: The Simulated Impact of a Parametric Reform" International Social Security Review, Vol. 64, No. 1, pp. 73-93, 2011 RAFAEL MUOZ DE BUSTILLO, affiliation not provided to SSRN This article aims to offer an ex ante evaluation of the impact of a parametric reform of the Spanish pension system that would involve increasing the reference period used to calculate benefits, an approach proposed many times by various actors in the socioeconomic field. Such gradual change may be categorized as a non-structural reform of the pension system. This contrasts with reforms of a structural nature that have been very popular in Latin America and elsewhere, involving the creation of defined contribution individual account schemes. As regards the parametric reform proposed in this article, the main findings indicate that it would have a small but negative impact on pension income for pensioners and would reduce income distribution. "The Swiss Social Insurance System: Social Security and Grass-Roots Democracy" International Social Security Review, Vol. 64, No. 1, pp. 95-110, 2011 PHILIPP PORTWICH, affiliation not provided to SSRN The foundations of Switzerland's social insurance system can be traced to 1890 when a public referendum voted the inclusion of an article into the Federal Constitution that gave the executive the task of creating a sickness and accident insurance scheme. Currently, as in other European countries, the Swiss social insurance system is facing challenges as a result of rising health costs and demographic shifts, which are placing a growing burden on both public finances and private households. To reach policy decisions to address these challenges, the Swiss system is distinguishable from those of its European neighbours because of a continuing tradition of political decision-making based on grass-roots democracy: through referenda, the Swiss people remain directly responsible for the development of the national social insurance system. Importantly, not only might this unique feature of Swiss democracy lead the Swiss people more readily to accept and identify with their social insurance system but it may offer a sound democratic base upon which to build a consensual approach to address the policy challenges that lie ahead.
Email: b.casey@warwick.ac.uk
ARNALDO PROVASI LANZARA, affiliation not provided to SSRN
PABLO DE PEDRAZA, affiliation not provided to SSRN
JOS IGNACIO ANTN, affiliation not provided to SSRN
LUIS ALBERTO RIVAS, affiliation not provided to SSRN
Thursday, January 20, 2011
New papers from the Social Science Research Network
Wednesday, January 19, 2011
New CRR Issue in Brief: “Improving Sweden’s Automatic Pension Adjustment Mechanism.”
The Center for Retirement Research at Boston College has released a new Issue in Brief: "Improving Sweden's Automatic Pension Adjustment Mechanism," by Nicholas Barr and Peter Diamond. The brief's key findings are: AB: In an AEI working paper back in 2008, I looked at how similar auto-adjustment features could be applied to the US Social Security program. Compared to some alternate approaches to reform, which actually increased the amount of uncertainty regarding future system financing, auto-adjustments could be designed to gradually change taxes and benefits so the program is always in balance and the costs of keeping it in balance are spread among as many generations of workers and retirees as possible.
Friday, January 14, 2011
Agenda for January 28 Meeting of SSAB Technical Panel
2011 Technical Panel on Assumptions and Methods Meeting Agenda January 28, 2011 The meetings will be held in the offices of the Social Security Advisory Board: 400 Virginia Avenue SW, Suite 625, Washington, DC 20024 Friday, January 28, 2011 9:30-10:30 Immigration assumptions and methods Presentation by Office of the Chief Actuary 10:30-10:45 Break 10:45-12:00 Immigration assumptions and methods Presentation by Karen Woodrow-Lafield, Panel member 12:00-12:30 Lunch 12:30-3:15 Disability assumptions and methods Presentation by Mark Duggan, Panel member 3:15-3:30 Break 3:30-5:30 Labor force participation assumptions and methods Presentation by John Sabelhaus, Panel member
Ponnuru: GOP should wait to address entitlement reforms
Writing in the New York Times, National Review's Ramesh Ponnuru argues that, as pressing as budget issues may be, Congressional Republicans shouldn't push for Social Security and Medicare reforms unless President Obama clearly wants to engage: Reforming these programs is vital to our nation's long-term fiscal health — which is why Republicans should resist this advice and leave the issue alone. Reform is impossible this year or next unless President Obama takes the lead on it. What's more, Republicans have no mandate for reform, and a failed attempt will only set back the cause. Ponnuru also argues that the "third rail of politics" still carries a lot of juice: Some Republicans are understandably eager to take on these entitlements. "The third rail is not the third rail anymore," Representative Paul Ryan, a Republican from Wisconsin, said in December. Maybe he's right. But Republicans have gotten a painful shock every time they have decided it's finally safe to take on entitlements. Ronald Reagan suffered a defeat in his first year when he tried cutting Social Security's early retirement benefits. Newt Gingrich's 1995 Republican revolution fizzled when President Bill Clinton fought him over Medicare cuts. President George W. Bush's effort to reform Social Security in 2005 ended any political momentum he brought to his second term. I think Ramesh is right. In the past, I've often wanted to think that the public is ready to deal with entitlement reforms, but Congress's propensity to procrastinate is often a function of the public's habit of doing just the same. It would be better to deal with these issues sooner rather than later, but unless both the public and the opposition party are ready to engage, it's very hard for one party to do it on its own. Just consider how difficult it was for Congressional Democrats, despite massive majorities, to pass health care reform. Entitlements would probably be even tougher since there's much more "take" and much less "give" involved. I'm hopeful that President Obama will choose to engage on Social Security, perhaps taking up his deficit commission's proposals in the State of the Union address. It could help him re-establish some centrist credentials and, if accomplished successfully, could give the public and financial markets renewed confidence that the federal government can tackle its budget challenges. But it might be better to do nothing than to try and fail. I'm not sure how many more unsuccessful attempts at entitlement reform our lenders are willing to overlook before they decide we're not going to be able to repay what we owe.
Wednesday, January 5, 2011
Gokhale: Reform Disability Insurance
At Investor's Business Daily, the Cato Institute's Jagadeesh Gokhale writes about the need to reform Social Security's disability program. While DI has widely been ignored as part of Social Security reform plans to date, with most solvency-oriented reformers finding it too complex to tackle, there's growing interest in looking at DI reform – both to hold down rapidly growing costs and to improve the efficiency of the program in finding disabled people and granting them benefits in a reasonable period of time. Gokhale references a proposal from David H. Autor of the Massachusetts Institute of Technology and Mark Duggan of the University of Maryland, which would require employers to provide private disability insurance as a "front end" for the Social Security DI program. The idea is that the private plans would be focused on helping individuals remain on the job; for those who couldn't, the path to receiving Social Security DI would be smoothed. In a recent New York Times blog, I touched on some other ideas from Autor and Duggan for DI reform. Also worth noting is that Richard Burkhauser of Cornell University is currently completing a book for AEI on disability insurance reform, co-authored with Mary Daly of the San Francisco Federal Reserve. I'm hopeful that the Autor-Duggan paper and the Burkhauser-Daly book will instigate a new momentum for DI reform.
Tuesday, January 4, 2011
Social Security “more at risk than it was in 2005”? Really?
The Hill reports that Democratic congressmen and liberal activists are concerned that President Obama will cut a deal with Republicans on Social Security reform, producing a package that would cut benefits for future retirees. Apparently the Left is really concerned: Maria Freese of the National Committee to Preserve Social Security and Medicare said she thinks Social Security is "more at risk than it was in 2005," when President Bush proposed far-reaching changes to the program, including personal accounts. The plan was vigorously opposed by Democrats and liberal groups and never came up for a vote in Congress. Ok, I can see there's some danger that Obama, looking to his own re-election prospects, will tack to the middle by compromising with Congressional Republicans to produce a big achievement they can both tout to voters. But is this really a bigger risk for liberals than 2005, when a newly re-elected President Bush and a GOP-controlled House and Senate sought to fix Social Security without any new revenues AND with personal accounts? President Obama is, after all, a pretty liberal guy and the Senate still is under Democratic control. But this does reflect what I've noted before as a liberal lack of confidence on Social Security: while endlessly repeating how much everyone loves and values the program (evil conservatives excepted, of course), they also seem convinced that pretty much any legislative fix will end up gutting the program. Either our representative government functions really poorly or they may not think Americans support higher taxes for Social Security quite as much as the Left does.
Monday, January 3, 2011
Video from C-SPAN appearance on Social Security
I was on C-SPAN's Washington Journal this morning to discuss Social Security, with a focus on proposals to raise the early retirement age of 62. Plus phone calls, which are always the best part.
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