State and local pension plans have experienced significant challenges over the past two decades. Public pensions are riskier and harder to manage than previously understood, and governments must adjust policy and practice to better manage these risks. This report provides actionable recommendations to help policymakers address pension funding issues and avoid worst-case scenarios. We provide a simple rating system to help stakeholders better understand the financial risks their plans face, discuss the policy options and mechanisms available to governments whose plans face a solvency crisis, and outline policy options that can help prevent plans from falling into a crisis.
First Tuesday -- Can Boomer Women Afford to Retire?Display Date
The aging of the baby boomer generation brings sweeping changes for all Americans. If current policies continue, this demographic shift will put more demands on health care and long-term care, shrink the number of workers per retiree, and potentially slow economic growth. But policies that promote productive aging, like rewarding paid employment at older ages, encouraging volunteerism, and expanding community-living options for frail older adults, could significantly ease the transition.
Our research aims to better understand these challenges and opportunities and dispel myths about an aging population.
We study how retirement has changed. For example, employers have moved away from defined-benefit pension plans to 401(k)-type plans, which are better for people with shorter work histories but require individuals to plan more carefully.
We identify the employment barriers that keep people from working at older ages and recommend solutions that encourage all workers to thrive.
We analyze ways to reform Social Security, long-term care financing, and underfunded public-sector pensions.
We look at ways to protect vulnerable populations in retirement, including low-income seniors and those with disabilities.
We collaborate with colleagues across the Urban Institute to figure out how retirement issues intersect with employment, income, savings, health, family welfare, housing, philanthropy, government budgets, and other areas. Our research does more than identify the challenges associated with retirement and an aging population; we also develop practical policy options and assess emerging solutions across the political spectrum.
Our DYNASIM model—which forecasts the long-run distributional consequences of aging and retirement—allows us to play out alternative strategies to reform Social Security, Medicare, long-term care financing, and employer benefits to see who wins and who loses under different options. No other private research organization has this capability.
Federal and state policymakers use our research to develop cost-effective proposals to improve retirement security. We built and continue to update Modeling Income in the Near Term (MINT), the modeling tool housed in and used by the Social Security Administration. The agency uses MINT to examine the effects of Social Security reforms proposed by Congress and by high-level commissions, including the recent Simpson-Bowles Commission. Congress and commission members also turn to our researchers for formal testimony and for advice on ways to shore up Social Security and improve retirement income security. State policymakers are using our research into government retirement plans to devise public pension reforms that treat government employees, their retired counterparts, and taxpayers fairly.
Our research into long-term services and supports is having an impact at the federal and state levels. Several commissions are studying how to improve the delivery and financing of personal care—both at home and in institutions—for older adults with disabilities. We are modeling those proposals, projecting how they might affect the level, type, and cost of care provided to baby boomers as they get older. We are also working with several states to project the likely impact of their long-term care programs.