Widespread concerns about the long-term fiscal gap in Social Security have prompted various proposals for structural reform, with individual accounts as the centerpiece. In particular, the proposals issued by the President’s Commission to Strengthen Social Security in its 2001 final report would carve out a substantial portion of the existing defined benefit structure and replace it with voluntary individual accounts, resulting in a novel hybrid system. The proposal to introduce individual accounts into the public system, while not fully specified, reflects a parallel shift from traditional defined benefit plans to defined contribution plans which has already unfolded in the private system of employer-provided pensions. In both public and private contexts, the debate over the structure of retirement savings programs exposes a deeper struggle over the goals of national retirement policy and the appropriate allocation of risks and responsibilities among government, employers, and workers.
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