The U.S. pension system is in decline, and it needs fixing. Odds are that current workers, when they retire, will lack the financial security of current retirees. For the growing number of workers who rely on 401(k) plans for retirement savings, dramatic declines in the financial markets in 2008 cruelly brought home the fact that they have taken on the investment risk previously absorbed by employers when defined benefit plans were the dominant form of pension. Today, not only are workers responsible for selecting investment accounts that they hope will deliver positive returns, they also have to be sure to retire when the markets are up or they face running out of money in old age.
John A. Turner tackles the current problems facing pension policy for U.S. private sector employer-provided pension plans. He provides a thorough overview of defined benefit, defined contribution, and hybrid retirement plans; describes the problems inherent in the current pension system; and presents possible solutions to those problems. In doing so, he approaches pension policy from a key perspective, the international perspective.
Normally in the United States, the 50 states provide the opportunity for social experimentation on policy innovations at a smaller level than the national level. That possibility for experimentation, however, is not available in the pension system because federal law preempts state law on pension issues. Thus, Turner presents lessons for U.S. policy from the retirement system experiences of more than a dozen other industrialized countries.
Key policy issues addressed include:
Readers seeking an overall introduction to pension policy will be rewarded by reading the book from cover to cover; other readers may find it more profitable to read individual chapters for Turner's analyses of issues of particular interest. In either case, this book offers specific solutions aimed at improving pension policy, and ultimately the lives of retirees, in the United States and elsewhere.