Event Summary Are proposals to expand the Social Security program and to reduce or eliminate tax incentives for retirement plans the right solution to America’s perceived retirement crisis? At an AEI event on Friday morning, Syl Schieber, former chairman of the Social Security Advisory Board, presented a paper he cowrote addressing this widespread perception. To evaluate retiree income sufficiency, Schieber examined shortcomings in the underlying income data behind Social Security Administration reports, predominately provided by the Current Population Survey (CPS). Comparing income measures through federal tax filings with CPS was a reality check, reported Schieber. He and his coauthor, Billie Jean Miller, found that CPS missed at least 95 percent of Individual Retirement Account (IRA) distributions and at least 50 percent of pension and annuity income. John Sabelhaus from the Board of Governors of the Federal Reserve System corroborated Schieber’s findings with his own research. Sabelhaus offered the Survey of Consumer Finances (SCF) as a data source better adapted to capturing retiree income and account flows. Utilizing the SCF reveals that resources available to retirees are more substantial than the CPS suggests. Both Schieber and Sabelhaus raised questions on the importance of retiree income measures capturing Roth IRA account distributions and of adapting to an evolving concept of what defines a retiree. They agreed that while the current Social Security system has significant strengths, concerns such as early withdrawal rates and employer provision of retirement accounts still require substantial attention. –Kelly Funderburk Event Description There is a widespread perception that many Americans are inadequately prepared for retirement. Some even call this a crisis. Policymakers have responded with proposals to expand the Social Security program and reduce or eliminate tax incentives for 401(k) and Individual Retirement Account (IRA) plans that many believe have served Americans poorly. But some analysts question this perceived retirement crisis, arguing that official statistics significantly understate the benefits that retirees receive from 401(k) plans and IRAs. At this event, retirement experts will discuss how proposed policy changes to Social Security or private pensions may be ill-considered.
Continental Breakfast and Registration
Sylvester J. Schieber, Former Chairman of the Social Security Advisory Board
John Sabelhaus, Board of Governors of the Federal Reserve System
Andrew G. Biggs, AEI
Event Contact Information
For more information, please contact Kelly Funderburk at [email protected], 202.862.5920.
Media Contact Information
For media inquiries, please contact [email protected], 202.862.5829.
Andrew G. Biggs is a resident scholar at AEI, where he studies Social Security reform, state and local government pensions, and public-sector pay and benefits. Before joining AEI, Biggs was the principal deputy commissioner of the Social Security Administration (SSA), where he oversaw SSA’s policy research efforts. In 2005, as an associate director of the White House National Economic Council, he worked on Social Security reform. In 2001, he joined the staff of the President’s Commission to Strengthen Social Security. He has published widely in academic publications as well as in newspapers such as The New York Times, The Wall Street Journal, and The Washington Post. He has also testified before Congress on numerous occasions. In 2013, the Society of Actuaries appointed Biggs co-vice chair of a blue-ribbon panel focused on underfunding of public-sector pension plans.
John Sabelhaus is an economist at the Board of Governors of the Federal Reserve System in Washington, DC, where he oversees the Survey of Consumer Finances. He is also an affiliated faculty member in the economics department at the University of Maryland where he has taught since 1999. Between 1999 and 2007, Sabelhaus was unit chief for long-term modeling at the Congressional Budget Office (CBO). He has also held positions at the Investment Company Institute, the Tax Analysis and Macroeconomic Analysis Divisions at the CBO, Urban Institute, and Towson University. Sabelhaus’s research covers a wide range of topics, with a focus on household finance, retirement, and survey methodology. He oversaw the development of the CBO long-term policy model, which integrates microsimulation with actuarial, macroeconomic, and budgetary projection capabilities. He has published extensively on Social Security, Medicare, public-sector pensions, microsimulation, earnings volatility, saving, and income tax–related issues.
Sylvester J. Schieber served on the Social Security Advisory Board from 1998 to 2009. He was appointed chairman by President George W. Bush on October 1, 2006, and served in that role until departing the board. Schieber was also a member of the 1994–96 Social Security Advisory Council. From 1983 to 2006 he worked for Watson Wyatt Worldwide (now Towers Watson). He set up Watson Wyatt’s Research and Information Center in 1983 and managed it until early 2005 when he was appointed director of North American benefits consulting. Before joining Watson Wyatt, he was the first research director at the Employee Benefits Research Institute in Washington, DC. Before that, he worked at the Social Security Administration for eight years. His last position there was as deputy director of the Office of Policy Analysis. His latest book is “The Predictable Surprise: The Unraveling of the U.S. Retirement System” (Oxford University Press, 2012). For this work, he was awarded the 2012 TIAA-CREF Paul A. Samuelson Award for outstanding scholarly writing on lifelong financial security.