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The Evolving Pension System

Trends, Effects, and Proposals for Reform

edited by William G. Gale, John B. Shoven, and Mark J. Warshawsky

Publication Year: 2005

The Evolving Pension System examines the foundations and the future of the private pension system. It provides a broad overview of the underlying assumptions, characteristics, and effects of existing pension policy, as well as alternative views on how public policy toward pensions should evolve in the future. Contributors include Robert Clark (North Carolina State University), Eric Engen (Federal Reserve Board), William G. Gale (Brookings Institution), Theodore Groom (Groom Law Group, Chartered), Daniel Halperin (Harvard), Alicia Munnell (Boston College), Leslie Papke (Michigan State University), Joseph Quinn (Boston College), Sylvester Schieber (Watson Wyatt), John B. Shoven (Stanford), and Jack Vanderhei (Temple University and EBRI). William G. Gale is the Joseph A. Pechman Fellow in the Economic Studies program at the Brookings Institution. John B. Shoven is Charles R. Schwab Professor at Stanford University. Mark J. Warshawsky is director of research at the TIAA-CREF Institute.

Published by: Brookings Institution Press

Title Page

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pp. iii


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pp. v-vi

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pp. vii-viii

Private pensions play a crucial role in today’s economy. They provide a valuable second tier of retirement income for many retirees, supplementing the basic support provided by Social Security and Medicare, which were never intended to provide for all retirement needs. Private pensions help employers shape orderly personnel and turnover policies. They provide massive amounts of...

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Chapter 1. Introduction

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pp. 1-9

At least since World War II, retirement income in the United States has relied on the so-called three-legged stool: Social Security, employer-based pensions, and private saving. Along many dimensions, this system has generated remarkable success. The incidence of poverty among the elderly has fallen dramatically over the last several decades, even as people retired at younger ages ...

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Chapter 2. The Evolution and Implications of Federal Pension Regulation

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pp. 11-49

Passage of the federal Employee Retirement Income Security Act (ERISA) in1974 was a landmark event in the evolution of employer-sponsored pensions, marking the shift from a period of laissez-faire regulation of retirement plans to a period of much more active government regulation. Although federal pension regulation was relatively lenient during the first three quarters of the twentieth...

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Chapter 3. The Shifting Structure of Private Pensions

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pp. 51-76

Since the passage of the Employee Retirement Income Security Act in 1974, the private pension system has evolved along several dimensions. The single largest change has been a move away from defined benefit plans toward defined contribution plans. A second change has occurred within the universe of defined contribution plans, where 401(k) plans have emerged as the dominant...

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Chapter 4. Effects of Pensions on Labor Markets and Retirement

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pp. 77-101

Employer-provided pensions represent an important part of labor compensation at many firms. From 1950 until the enactment of the Employee Retirement Income Security Act (ERISA) in 1974, pension coverage rose from approximately 25 percent of the private work force to between 45 and 50 percent, with most workers participating in defined benefit plans. Since 1974 pension...

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Chapter 5. The Effect of Pensions and 401(k) Plans on Household Savings and Wealth

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pp. 103-121

One of the most important and controversial aspects of the pension systemis its effect on private saving, wealth accumulation, and retirement preparedness. Although traditional pensions and other tax-deferred vehicles, like 401(k) plans and individual retirement accounts (IRAs), clearly make up a sizable share of households’ wealth in the pre-retirement...

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Chapter 6. Deregulating the Private Pension System

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pp. 123-153

In the early part of the twentieth century, most workers died with their workboots on. Employee pensions were regarded as a “fringe” benefit in the true sense of the word. They were not considered to be fundamental to the basic employee-employer relationship but instead were viewed as gratuities or rewards for faithful long-term service and were often contingent on remaining with the same...

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Chapter 7. Ensuring Retirement Income for All Workers

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pp. 155-189

The Employee Retirement Income Security Act (ERISA) of 1974 did what it was supposed to do—protect promised pension benefits under defined benefit plans offered by private employers. But ERISA did not address what has become the primary problem today, namely, gaps in coverage—the absence of promised benefits in the first place. It has become increasingly clear that private pension...

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Chapter 8. From Fiduciary to Facilitator: Employers and Defined Contribution Plans

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pp. 191-206

Although it represents a striking success in some ways, the private pension system suffers from at least two major flaws: it is too complicated and it covers too few workers. A vigorous debate on whether the best approach to fixing these problems is to expand or contract the role of the government in the pension system is exemplified by the papers in this volume by Groom and...


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pp. 207-216


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pp. 217


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pp. 219-226

E-ISBN-13: 9780815797999
E-ISBN-10: 0815797990

Page Count: 226
Publication Year: 2005