Defined contribution plans, predominantly 401(k)s, are the primary source of personal retirement savings for American workers, making the investment decisions within these accounts a salient policy concern. These decisions are a result of two separate actions: the mutual fund options selected by...

Many workers eligible for 401(k) plans fail to par­ticipate and those who do participate often save too little. In response, policy experts have advocated auto-enrollment, in which employees are signed up at a default contribution rate unless they opt out. Over the past decade, a number of...

The Social Security Trustees Report states that replacement rates for the medium earner rose from about 30 percent in the 1970s to 40 percent in the 1980s, where they remain today. However, the focus on individual earners is often misleading as many people work and retire as part of a married...

The federal government provides generous tax subsidies for retirement saving in 401(k)s and IRAs. The subsidies are designed to increase household saving and retirement income security, important national goals. The estimated cost, however, exceeds $100 billion a year in lost revenue to the...

Eligibility for Medicare at age 65 is widely viewed as an important factor in retirement decisions. However, it has been difficult to quantify the influence of Medicare because eligibility for Medicare came at the same age as Social Security’s Full Retirement Age (FRA). The recent rise in the...

The 2008 financial crisis sharply reduced the assets and funded levels in state and local pension plans. he drop in funding means that state and local governments have to raise additional revenue to fill the gap. At the same time, the ensuing recession eroded state and local revenues and...

The 2013 Trustees Report – unlike last year – contains no surprises. Last year’s report showed a big jump in the program’s 75-year deficit in the wake of the slow recovery from the recession and rising disability rolls. This year’s report shows essentially no change in the deficit –...

One issue that comes up in discussions of compensation of state/local workers is their job security relative to that of workers in the private sector. Several questions arise in this regard. How much more secure are public sector jobs? Has their relative security declined in the Great Recession?...

States have begun to respond to their pension challenge by enacting a mix of revenue increases and benefit cuts. These changes will, over time, improve the financial outlook for plans and help ease their impact on other budget priorities. But, to date, the specific nature and magnitude of these...

Investing Social Security Trust Fund assets in equi­ties has long been a controversial proposal. Equities have higher expected returns than government bonds, which are the only asset the Trust Fund currently holds. So investing a portion of these assets in stocks could reduce the program’s...