Reforming Social Security: Issues and Challenges for Personal Retirement Accounts

East and West Studies, Vol. 19, No. 1, pp. 215-242, 2007

Posted: 9 Dec 2009

See all articles by Wade D. Pfau

Wade D. Pfau

The American College for Financial Services; Retirement Researcher

Date Written: July 1, 2007

Abstract

We seek to analyze a number of important issues related to the ownership of government pensions, and the switch from pay-as-you-go defined-benefit pensions to fully-funded defined-contribution pensions. Social Security will still need to find ways to cover its unfunded liabilities to past and present retirees, as well as to workers who have paid into the system. Also, will participation be voluntary or mandatory, will annuitization be required, and how freely can participants choose their investment strategy? An assessment of personal accounts must also fully incorporate the role of disability benefits and survivor benefits. Finally, what will happen in the new system if the accounts do not achieve their expected returns? We use the example of the United States to highlight many important issues faced by countries looking to use defined-contribution pensions as a response to aging populations.

Keywords: Social Security Reform, Personal Retirement Accounts, Public Finance

JEL Classification: H55

Suggested Citation

Pfau, Wade D., Reforming Social Security: Issues and Challenges for Personal Retirement Accounts (July 1, 2007). East and West Studies, Vol. 19, No. 1, pp. 215-242, 2007, Available at SSRN: https://ssrn.com/abstract=1519301 or http://dx.doi.org/10.2139/ssrn.1519301

Wade D. Pfau (Contact Author)

The American College for Financial Services ( email )

630 Allendale Rd
King of Prussia, PA 19406
United States

HOME PAGE: http://www.retirementresearcher.com

Retirement Researcher ( email )

1900 Gallows Rd, Suite 350
Vienna, VA 22182
United States

HOME PAGE: http://www.retirementresearcher.com

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