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years and the primary demographic and economic factors underlying those costs. Even with increases in funding, it seems clear that some reductions in publicly provided retirement benefits will be unavoidable. The task force then reviewed current trends and considered the likely future performance of employer pensions and personal savings to make a preliminary evaluation of the extent to which private systems for delivering retirement income can be expected to compensate for reductions under the public systems. Finally, the task force outlines options that Congress can consider to bring public programs into better financial balance and to encourage the expansion of private programs and individual savings. While the report seeks to be comprehensive by examining all major retirement income delivery systems, it does not focus on the problems of specific subsegments of the population. Hence, the focus is on Social Security and Medicare, not on Supplemental Security Income (SSI) and Medicaid, which are primary sources of support for the low-income elderly. Similarly, the specific problems faced by women in general and widows in particular are not addressed. The task force does not consider the issues facing these population groups unimportant. To the contrary, they are very important. Nonetheless, they are beyond the scope of the task force’s current effort.

he American Academy of Actuaries is the public policy organization for actuaries of all specialties within the United States. In addition to setting qualification standards and standards of actuarial practice, a major purpose of the Academy is to act as the public information organization for the profession. The Academy is nonpartisan and assists the public policy process through the presentation of clear actuarial analysis. The Academy regularly prepares testimony for Congress, provides information to federal elected officials and congressional staff, comments on proposed federal regulations, and works closely with state officials on issues related to insurance. This report was prepared by the Academy’s nine-member Task Force on Trends in Retirement Income Security. In addition to actuaries, who are experts in calculating the cost of future risk, the task force includes individuals outside the actuarial profession. The Academy believes retirement security is such an important and broad topic that the public is best served by a report reflecting cross-disciplinary views. The report presents the results of a review of data on each of the major sources of security during retirement: Social Security, employer-sponsored pensions, individual savings, and health insurance. After reviewing current sources of income during retirement, the task force examined expected costs for Social Security and Medicare over the next 30 to 40


Task Force on Trends in Retirement Income Security Larry Zimpleman, F.S.A., M.A.A.A., chairperson Edward E. Burrows, M.S.P.A., M.A.A.A., F.C.A., E.A. Robert Clarke,* Ph.D. Robert A. Moe, M.A.A.A., E.A. Fred W. Munzenmaier, F.S.A.,M.A.A.A., F.C.A., E.A.

Mark T. Ruloff, A.S.A., M.A.A.A., E.A. Stanley C. Samples, M.A.A.A., F.S.A., F.C.A., E.A. Stanley Weisleder, F.C.A., M.A.A.A., M.S.P.A., E.A. Sheila Zedlewski,* M.P.A.

*Robert Clarke is Professor of Economics and Business at North Carolina State University. Sheila Zedlewski is Director of the Income and Benefits Policy Center of the Urban Institute.


1998 NO. 1 This monograph was produced through the American Academy of Actuaries, under the supervision of Gary Hendricks, Senior Policy Adviser. Darrell Anderson provided research assistance.

John H. Trout, Director of Public Policy Ken Krehbiel, Director of Communications David F. Rivera, Policy Analyst American Academy of Actuaries 1100 Seventeenth Street NW 7th Floor Washington DC 20036 Tel (202) 223-8196 Fax (202) 872-1948

© 1998 by the American Academy of Actuaries. All rights reserved.


The Problem and Options for Change PublicPolicyMonograph 1998 No. 1 A MERICAN A CADEMY of A CTUARIES


The Problem and Options for Change PublicPolicyMonograph 1998 No. 1 A MERICAN A CADEMY of A CTUARIES