Pensions crisis

The pensions crisis or pensions timebomb is the predicted difficulty in paying for corporate or government employment retirement pensions in various countries, due to a difference between pension obligations and the resources set aside to fund them. The basic difficulty of the pension problem is that institutions must be sustained over far longer than the political planning horizon.[1] Shifting demographics are causing a lower ratio of workers per retiree; contributing factors include retirees living longer (increasing the relative number of retirees), and lower birth rates (decreasing the relative number of workers, especially relative to the Post-WW2 Baby Boom). An international comparison of pension institution by countries is important to solve the pension crisis problem.[2] There is significant debate regarding the magnitude and importance of the problem, as well as the solutions.[3]

For example, as of 2008, the estimates for the underfunding of the United States state pension programs ranged from $1 trillion using a discount rate of 8% to $3.23 trillion using U.S. Treasury bond yields as the discount rate.[4][5] The present value of unfunded obligations under Social Security as of August 2010 was approximately $5.4 trillion. In other words, this amount would have to be set aside today so that the principal and interest would cover the program's shortfall between tax revenues and payouts over the next 75 years.[6]

Some economists question our ability to address the problem by saving now. Storing funds by governments, in the form of fiat currencies, is the functional equivalent of storing a collection of their own IOUs. Since the government is responsible for printing the currency, the act of printing now, saving it, and then releasing it into circulation later is economically equivalent to simply printing it later.[7] This suggests that the hoarding of cash by the government today to address the later crisis is a non-solution.

Reform ideas can be divided into three primary categories:

  • Addressing the worker-retiree ratio, by raising the retirement age, employment policy and immigration policy
  • Reducing obligations by shifting from defined benefit to defined contribution pension types and reducing future payment amounts (by, for example, adjusting the formula that determines the level of benefits)
  • Increasing resources to fund pensions by increasing contribution rates and raising taxes.

Background

The ratio of workers to pensioners (the "support ratio") is declining in much of the developed world. This is due to two demographic factors: increased life expectancy coupled with a fixed retirement age, and a decrease in the fertility rate. Increased life expectancy (with fixed retirement age) increases the number of retirees at any time, since individuals are retired for a longer fraction of their lives, while decreases in the fertility rate decrease the number of workers.

In 1950, there were 7.2 people aged 20–64 for every person of 65 or over in the OECD countries. By 1980, the support ratio dropped to 5.1 and by 2010 it was 4.1. It is projected to reach just 2.1 by 2050. The average ratio for the EU was 3.5 in 2010 and is projected to reach 1.8 by 2050.[8] Examples of support ratios for selected countries and regions in 1970, 2010, and projected for 2050 using the medium variant:[9]

Country or Region197020102050
United States 5.2 4.6 2.5
Japan 8.7 2.6 1.3
United Kingdom 4.3 3.6 2.1
Germany 4.1 3.0 1.7
France 4.2 3.5 1.9
World 8.9 7.4 3.5
Africa 13.6 13.2 8.8
Asia 12.0 8.6 3.3
Europe 5.4 3.8 1.9
Latin America & Caribbean 10.8 8.3 3.0
Northern America 5.3 4.6 2.4
Oceania 7.2 5.3 3.0

Pension computations

Pension computations are often performed by actuaries using assumptions regarding current and future demographics, life expectancy, investment returns, levels of contributions or taxation, and payouts to beneficiaries, among other variables. One area of contention relates to the assumed annual rate of investment return. If a higher investment return is assumed, relatively lower contributions are demanded of those paying into the system. Critics have argued that investment return assumptions are artificially inflated, to reduce the required contribution amounts by individuals and governments paying into the pension system. For example, bond yields (the return on guaranteed investments) in the US and elsewhere are low (and the U.S.and other stock markets did not consistently beat inflation between 2000 and 2010). But many pensions have annual investment return assumptions in the 7–8% p.a. range, which are closer to the pre-2000 average return. If these rates were lowered by 1–2 percentage points, the required pension contributions taken from salaries or via taxation would increase dramatically. By one estimate, each 1% reduction means 10% more in contributions. For example, if a pension program reduced its investment return rate assumption from 8% pa to 7% pa, a person contributing $100 per month to their pension would be required to contribute $110. Attempting to sustain better-than-market returns can also cause portfolio managers to take on more risk.[10]

The International Monetary Fund reported in April 2012 that developed countries may be underestimating the impact of longevity on their public and private pension calculations. The IMF estimated that if individuals live three years longer than expected, the incremental costs could approach 50% of 2010 GDP in advanced economies and 25% in emerging economies. In the United States, this would represent a 9% increase in pension obligations. The IMF recommendations included raising the retirement age commensurate with life expectancy.[11]

United States
A timeline showing projected debt milestones from the CBO.

The Pension Benefit Guaranty Corporation’s (PBGC) financial future is uncertain because of long-term challenges related to its funding and governance structure. PBGC's liabilities exceeded its assets by about $51 billion as of the end of fiscal year 2018—an increase of about $16 billion from the end of fiscal year 2013. In addition, PBGC estimated that its exposure to potential additional future losses for underfunded plans in both the single and multiemployer programs was nearly $185 billion, of which the single-employer program accounts for $175 billion of this amount. PBGC projected that there is more than a 90 percent likelihood that the multiemployer program will be insolvent by the year 2025 and a 99 percent likelihood by 2026.[12]

U.S. Social Security program
Social Security – Ratio of Covered Workers to Retirees
Main article: Social Security debate (United States)

The number of U.S. workers per retiree was 5.1 in 1960; this declined to 3.0 in 2009 and is projected to decline to 2.1 by 2030.[13] The number of Social Security program recipients is expected to increase from 44 million in 2010 to 73 million in 2030.[14] The present value of unfunded obligations under Social Security as of August 2010 was approximately $5.4 trillion. In other words, this amount would have to be set aside today such that the principal and interest would cover the shortfall over the next 75 years.[6] The Social Security Administration projects that an increase in payroll taxes equivalent to 1.9% of the payroll tax base or 0.7% of GDP would be necessary to put the Social Security program in fiscal balance for the next 75 years. Over an infinite time horizon, these shortfalls average 3.4% of the payroll tax base and 1.2% of GDP.[15]

According to official government projections, the Social Security is facing a $13.2 trillion unfunded liability over the next 75 years.[16][17]

U.S. State-level issues

In financial terms, the crisis represents the gap between the amount of promised benefits and the resources set aside to pay for them. For example, many U.S. states have underfunded pensions, meaning the state has not contributed the amount estimated to be necessary to pay future obligations to retired workers. The Pew Center on the States reported in February 2010 that states have underfunded their pensions by nearly $1 trillion as of 2008, representing the gap between the $2.35 trillion states had set aside to pay for employees' retirement benefits and the $3.35 trillion price tag of those promises.[4]

The Center on Budget and Policy Priorities (CBPP) reported in January 2011 that:

  • As of 2010, the state pension shortfall ranges between $700 billion and $3 trillion, depending on the discount rate used to value the future obligations. The $700 billion figure is based on using a discount rate in the 8% range representative of historical pension fund investment returns, while the $3 trillion represents a discount rate in the 5% range representative of historical Treasury bond ("risk-free") yields.[18]
  • This shortfall emerged after the year 2000, substantially due to tax revenue declines from two recessions.
  • States contribute approximately 3.8% of their operating budgets to their pension programs on average. This would have to be raised to 5.0% to cover the $700 billion shortfall and around 9.0% to cover the $3 trillion shortfall.
  • Certain states (e.g., Illinois, California, and New Jersey) have significantly underfunded their pension plans and would have to raise contributions towards 7–9% of their operating budgets, even under the more aggressive 8% discount rate assumption.
  • States have significant time before the pension assets are exhausted. Sufficient funds are present already to pay obligations for the next 15–20 years, as many began funding their pensions back in the 1970s. The CBPP estimates that states have up to 30 years to address their pension shortfalls.
  • States accumulated more than $3 trillion in assets between 1980 and 2007 and there is reason to assume they can and will do that again, as the economy recovers.
  • Nearly all debt issued by a state (generally via bonds) is used to fund its capital budget, not its operating budget. Capital budgets are used for infrastructure like roads, bridges and schools. Operating budgets pay pensions, salaries, rent, etc. So state debt levels related to bond issuance and the funding of pension obligations have substantially remained separate issues up to this point.
  • State debt levels have ranged between 12% and 18% of GDP between 1979 and 2009. During the second quarter of 2010, the debt level was 16.7%.
  • State interest expenses remains a "modest" 4–5% of all state/local spending.
  • Pension promises in some states are contractually binding. In many states, constitutional amendments are also required to modify them.[19] Other states have different pension laws and policies.

The pension replacement rate, or percentage of a worker's pre-retirement income that the pension replaces, varies widely from state to state. It bears little correlation to the percentage of state workers who are covered by a collective bargaining agreement. For example, the replacement rate in Missouri is 55.4%, while in New York it is 77.1%. In Colorado, replacement rates are higher but these employees are barred from participating in Social Security.[20]

The Congressional Budget Office reported in May 2011 that "most state and local pension plans probably will have sufficient assets, earnings, and contributions to pay scheduled benefits for a number of years and thus will not need to address their funding shortfalls immediately. But they will probably have to do so eventually, and the longer they wait, the larger those shortfalls could become. Most of the additional funding needed to cover pension liabilities is likely to take the form of higher government contributions and therefore will require higher taxes or reduced government services for residents".[21]

U.S. city and municipality pensions

In addition to states, U.S. cities and municipalities also have pension programs. There are 220 state pension plans and approximately 3,200 locally administered plans. By one measure, the unfunded liabilities for these programs are as high as $574 billion. The term unfunded liability represents the amount of money that would have to be set aside today such that interest and principal would cover the gap between program cash inflows and outflows over a long period of time. On average, pensions consume nearly 20 percent of municipal budgets. But if trends continue, over half of every dollar in tax revenue would go to pensions, and by some estimates in some instances up to 75 percent.[22][23]

As of early 2013, several U.S. cities had filed for bankruptcy protection under federal laws and were seeking to reduce their pension obligations. In some cases, this might contradict state laws, leading to a set of constitutional questions that might be addressed by the U.S. Supreme Court.[24]

Shift from defined benefit to defined contribution pensions

The Social Security Administration reported in 2009 that there is a long-term trend of pensions switching from defined benefit (DB) (i.e., a lifetime annuity typically based on years of service and final salary) to defined contribution (DC) (e.g., 401(k) plans, where the worker invests a certain amount, often with a match from the employer, and can access the money upon retirement or under special conditions.) The report concluded that: "On balance, there would be more losers than winners and average family incomes would decline. The decline in family income is expected to be much larger for last-wave boomers born from 1961 to 1965 than for first-wave boomers born from 1946 to 1950, because last-wave boomers are more likely to have their DB pensions frozen with relatively little job tenure."[25]

The percentage of workers covered by a traditional defined benefit (DB) pension plan declined steadily from 38% in 1980 to 20% in 2008. In contrast, the percentage of workers covered by a defined contribution (DC) pension plan has been increasing over time. From 1980 through 2008, the proportion of private wage and salary workers participating in only DC pension plans increased from 8% to 31%. Most of the shift has been the private sector, which few changes in the public sector. Some experts expect that most private-sector plans will be frozen in the next few years and eventually terminated. Under the typical DB plan freeze, current participants will receive retirement benefits based on their accruals up to the date of the freeze, but will not accumulate any additional benefits; new employees will not be covered. Instead, employers will either establish new DC plans or increase contributions to existing DC plans.[25]

Employees in unions are more likely to be covered by a defined benefit plan, with 67% of union workers covered by such a plan during 2011 versus 13% of non-union workers.[26]

Economist Paul Krugman wrote in November 2013: "Today, however, workers who have any retirement plan at all generally have defined-contribution plans—basically, 401(k)'s—in which employers put money into a tax-sheltered account that's supposed to end up big enough to retire on. The trouble is that at this point it's clear that the shift to 401(k)'s was a gigantic failure. Employers took advantage of the switch to surreptitiously cut benefits; investment returns have been far lower than workers were told to expect; and, to be fair, many people haven't managed their money wisely. As a result, we're looking at a looming retirement crisis, with tens of millions of Americans facing a sharp decline in living standards at the end of their working lives. For many, the only thing protecting them from abject penury will be Social Security."[27][28]

A 2014 Gallup poll indicated that 21% of investors had either taken an early withdrawal of their 401(k) defined contribution retirement plan or a loan against it over the previous five years; while both options are possible, they are not the intended purpose of 401k plans and can have substantial costs in taxes, fees and a smaller retirement fund.[29] Fidelity Investments reported in February 2014 that:

  • The average 401(k) balance reached a record $89,300 in the fourth quarter of 2013, a 15.5% increase over 2012 and almost double the low of $46,200 set in 2009 (which was affected by the Great Recession).
  • The average balance for persons 55 and older was $165,200.
  • Approximately one-third (35%) of all 401(k) participants cashed out their accounts when they left their jobs in 2013 (rather than rolling them to an Individual Retirement Account), which can cost investors substantially in terms of penalties and taxes.[30]

UK state pension and private pension
Public sector workers in Leeds striking over pension changes by the government in November 2011

Due to the low savings ratio, rapidly increasing longevity, new taxation of pension funds (for instance the removal of the right to reclaim withholding tax on equity dividends), and above all falling investment returns, many pension funds are in difficulties in the early 21st century. Most of these funds have moved from defined benefit (final salary) to contribution-based benefits. Thousands of private funds have been wound up. In October 2017 the UK Government implemented a mandatory automatic enrolment system where full-time employees and employers have to make contributions to a workplace pension scheme.[31] The UK Government commissioned an independent review of the State pension age by John Cridland and in 2017, amongst other measures, it proposed increasing the state pension age to 68 and removing the triple lock on state pensions.

Risk-Sharing Pensions

In 2018, the UK's Department for Work and Pensions began a public consultation on the potential launch of risk-sharing pensions.

The consultation focused on the potential benefits of Collective Defined Contribution pension schemes, or "CDCs", which function like a Tontine by enabling savers to pool their money into a single fund to share investment risk and longevity risk. These schemes became popular in the Netherlands in the early 2000s.

Legislation which would enable to UK's pension industry to reform it's Defined Benefit & Defined Contribution schemes to CDC's is currently in the process of being passed by the UK's House of Commons.[32]

Proposed reforms

In his book titled The Pension Fund Revolution (1996), Peter Drucker point out the theoretical difficulty of a solution, and proposed a second best policy that may be enable to enforce.[33]

Reform ideas are in three primary categories:

Zagreb pension reform protest in October 2018
  • Addressing the worker-retiree ratio, by raising the retirement age, employment policy, and immigration policy
  • Reducing obligations by shifting from defined benefit to defined contribution pension types and reducing future payment amounts
  • Increasing resources to fund pensions by increasing contribution rates and raising taxes. Recently this has included proposals for and actual confiscation of private pension plans and merging them into government run plans.[34]

In the United States, since 1979 there has been a significant shift away from defined benefit plans with a corresponding increase in defined contribution plans, like the 401(k). In 1979, 62% of private sector employees with pension plans of some type were covered by defined benefit plans, with about 17% covered by defined contribution plans. By 2009, these had reversed to approximately 7% and 68%, respectively. As of 2011, governments were beginning to follow the private sector in this regard.[3]

Proposed solutions to the pensions crisis include

  • actions that address the dependency ratio: later retirement, part-time work by the aged, encouraging higher birth rates, or immigration of working-aged persons,
  • actions that take the dependency ratio as given and address the finances – higher taxes and/or a reductions in benefits,
  • the encouragement or reform of private saving to grow the savings rate using methodologies such as mandatory and auto enrollment.

Benefits

Research proves that employees save more if they are mandatorily or automatically enrolled in savings plans. Laws compelling mandatory contributions are often politically difficult to implement. Auto-Enrolment schemes are easier to implement because employees are enrolled but have the option to drop out, as opposed to being required to take action to opt into the plan or being legally compelled to participate). Most countries that launched mandatory or auto-enrolment schemes did so with the intention of employees saving into defined contribution ("DC") plans.[3]

Weaknesses

Whilst mandatory & auto-enrolment schemes have been incredibly successful overall, a major problem was created by the fact that they were launched as DC plans with no real consideration given to what happens when plan members reach retirement and need to begin decumulating their savings.

As an example, Singapore & Malaysia both launched mandatory enrolment schemes Central Provident Fund or CPF in 1955 and the Employees Provident Fund (Malaysia) or EPF in 1951.

After the first generation of employees retired, they typically withdrew their pension balances and spent it. The Singapore Government responded by launching CPF Life which mandatorily annuitised a large portion of the CPF savings with the theory being that 'the government tells you and me, “The reason why I must take $161,000 away from you is because if I don’t, if I give you the full $200,000 to take out at age 55, some of you, you will take the money and you will go Batam. Some of you will go Tanjung Pinang. Some of you suddenly got a lot of relatives popped up then you don’t know how to say no because you’re so nice. Then after a while, we have no money left.”'.[35]

As a result, Singaporean employees now automatically receive a pension income for life in retirement from CPF life. The EPF on the other hand has never been able to successfully introduce a decumulation solution. Reports produced by the EPF show that 90% of EPF savers have spent all of their savings within 18 months of reaching retirement age.

Solutions

Following the UK's successful by introducing Automatic enrolment in 2012 based upon behavioural economic theory[36] the Department for Work & Pensions has now proposed new legislation which enables the creation of risk-sharing decumulation solutions such as Collective Defined Contribution schemes and Tontine pension schemes the latter of which also benefits from behavioural economic effects according to Adam Smith in his book The Wealth of Nations.

Criticisms

Other sources of income

Some claim that the pensions crisis does not exist or is overstated, as pensioners in developed countries faced with population aging are often able to unlock considerable housing wealth and make returns from other investments or employment. These claims, certainly in the UK, are unfounded as Government employee guaranteed final salary pension schemes have massive deficits (£53 billion in 2008)[37] and, regardless of the equity in their employees homes, they are still contracted to pay retired staff an agreed amount, which they are increasingly unable to do.

Demographic transition
Inverse dependency ratio (workers per dependent) by world regions, 1950–2050, notably showing demographic windows in the US and East Asia.

Some argue (FAIR 2000) that the crisis is overstated, and for many regions there is no crisis, because the total dependency ratio – composed of aged and youth – is simply returning to long-term norms, but with more aged and fewer youth: looking only at aged dependency ratio is only one half of the coin. The dependency ratio is not increasing significantly, but rather its composition is changing.

In more detail: as a result of the demographic transition from "short-lived, high birth-rate" society to "long-lived, low birth-rate" society, there is a demographic window when an unusually high portion of the population is working age, because first death rate decreases, which increases the working age population, then birth rate decreases, reducing the youth dependency ratio, and only then does the aged population grow. The decreased death rate having little effect initially on the population of the aged (say, 60+) because there are relatively few near-aged (say, 50–60) who benefit from the fall in death rate, and significantly more near-working age (say, 10–20) who do. Once the aged population grows, the dependency ratio returns to approximately the same level it was prior to the transition.

Thus, by this argument, there is no pensions crisis, just the end of a temporary golden age, and added costs in pensions are recovered by savings in paying for youth.

Key terms
  • Support ratio: The number of people of working age compared with the number of people beyond retirement age
  • Participation rate: The proportion of the population that is in the labor force
  • Defined benefit: A pension linked to the employee's salary, where the risk falls on the employer to pay a contractual amount
  • Defined contribution: A pension dependent on the amount contributed and related investment performance, where the risk falls mainly on the employee[3]

See also

References
  1. (高山 1983), pp. 224, "年金問題における基本的な困難は、ほとんどの政治家たちが考慮に入れる当面の短い期間よりもはるかに長期間にわたって制度が維持されなければならないことにある。政治家たちは選挙民の歓心を買おうとして年金給付の充実のみに熱中し、そのツケを将来の世代（現在まだ生まれていない人々も含む）に回すという選択をしがちである。そのような政治家たちの選択によって、年金制度はその長期的安定の基礎を掘り崩されてしまう。"(reverse translation from the Japanese edition: "The basic difficulty of pension problem is that institution must be sustained over far long times longer than the times almost politician assume. Politician tend to choice that only devoting themselves to full up pension payment for curry favor with voter, and make return its result to next generation (that contain a people have not born yet now). By such politician's choice, the base of long-time stability of pension institution is dug down thoroughly.")
  2. (高山 1983), pp. 11 "制度の国際比較はとくに重要である。国によって状況と制度が多様であるので、各国がそれぞれどのような困難をかかえているかを知ることができる一方、解決策を工夫するうえで有益な情報を国際比較の中から見出すことができるからである。"(reverse translation from the Japanese edition: "An international comparing of institution among each countries is especially important, since we can find a interest information in such comparing while we try to seek good solution, and we can see what difficulties each countries have since the institution and situation of countries is varied by countries.")
  3. "Falling Short: Workers are sleepwalking towards an impoverished old age". The Economist. 387 (8584): 79–81. 14 June 2008.
  4. Pew Center on the States – The Trillion Dollar Gap February 2010Archived 2011-04-20 at the Wayback Machine
  5. http://rnm.simon.rochester.edu/research/JEP_Fall2009.pdf
  6. OCACT. "The 2010 OASDI Trustees Report". www.ssa.gov. Retrieved 4 October 2018.
  7. Seven Deadly Innocent Frauds Of Economic Policy
  8. "Old-age dependency ratios". The Economist. Retrieved 4 October 2018.
  9. "United Nations Population Division, World Population Prospects 2017, File: Potential Support 2, medium variant, retrieved 6/28/18". Archived from the original on 2016-09-27. Retrieved 2018-06-28.
  10. "Pension assumptions hitting the wall". Reuters. 2009-01-14. Retrieved 4 October 2018.
  11. "IMF-Global Financial Stability Survey-April 2012" (PDF). Retrieved 4 October 2018.
  12. "The Nation's Fiscal Health" (PDF). www.gao.gov. Retrieved 12 April 2019.
  13. Concord Slides Archived 2011-05-24 at the Wayback Machine
  14. The Economist-As Boomers Wrinkle-December 2010
  15. "2009 Trustees Report: Section IV.B, Long-range estimates". www.socialsecurity.gov. Retrieved 4 October 2018.
  16. Capretta, James C. (June 16, 2018). "Opinion: The financial hole for Social Security and Medicare is even deeper than the experts say". MarketWatch.
  17. Mauldin, John (March 25, 2019). "The Real US National Debt Might Be $230 Trillion". Newsmax.
  18. "Equicapita: Demographics are Still Destiny" (PDF). Archived from the original (PDF) on 8 June 2015. Retrieved 4 October 2018.
  19. "Misunderstandings Regarding State Debt, Pensions, and Retiree Health Costs Create Unnecessary Alarm". Center on Budget and Policy Priorities. 19 January 2011. Retrieved 4 October 2018.
  20. Walsh, Mary Williams (2011-03-11). "Costs for State Pensions Often Exceed the Estimates". The New York Times. Retrieved 4 October 2018.
  21. "The Underfunding of State and Local Pension Plans - Congressional Budget Office". www.cbo.gov. Retrieved 4 October 2018.
  22. The Atlantic-Anthony Flint-The Next Big Financial Crisis That Could Cripple Cities-September 2012
  23. "The State of Local Government Pensions". LILP. Retrieved 4 October 2018.
  24. The Editorial Board (2013-04-13). "Opinion - Public Pensions in Bankruptcy Court". The New York Times. Retrieved 4 October 2018.
  25. Social Security Administration (March 2009). "The Disappearing Defined Benefit Pension". Social Security Administration. Retrieved May 2013. Check date values in: |accessdate= (help)
  26. "Bureau of Labor Statistics-William Wiatrowski-The Last Private Industry Pension Plans: A Visual Essay. December 2013" (PDF). Retrieved 4 October 2018.
  27. Krugman, Paul (2013-11-22). "Opinion - Expanding Social Security". The New York Times. Retrieved 4 October 2018.
  28. (Sabadish & Morrissey 2013)
  29. Inc., Gallup (2014-12-22). "One in Five Investors Have Tapped Into 401(k) Prematurely". Retrieved 4 October 2018.
  30. "Fidelity: Average 401(k) nearly doubles since '09". Retrieved 4 October 2018.
  31. Peachey, Kevin (2013-08-08). "Pension automatic enrolment". BBC News.
  32. https://commonslibrary.parliament.uk/research-briefings/cbp-8674/
  33. (上田 1996), pp. 238 "…次の三つの条件を満たすことが必要である：
    （1）主要資源とくに資本と知識労働者の生産性を着実かつ持続して向上させていくこと
    （2）資本形成を着実かつ持続して増大させていくこと
    （3）公共支出や国民所得のうち、移転支出や福祉支出に向ける部分の増加を食い止めること"
    (reverse translation from the Japanese edition: "...These three conditions must be satisfied:
    (1)To increase exactly and continuously productivity of major resources especially capital and white color labor work
    (2)To increase steadily and continuously capital growing
    (3)To prevent increasing for transfer expenditure and welfare expenditure, out of public expenditure and national income")
    34. Karen McMahan, Making 401(k)s And IRAs More Like Personal Pension Plans Archived 2012-01-14 at the Wayback Machine, Carolina Journal Online, November 6, 2008; article states that Dr. Ghilarducci, professor of economic policy analysis at the New School for Social Research proposed "that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workers' retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration."
    • https://www.providend.com/retirement-planning-part-2-understanding-cpf-life/
    • https://www.aatcomment.org.uk/accountancy-resources/pension-auto-enrolment-nudge-theory/
    • "Council pensions: The £53bn black hole". Taxpayers' Alliance.
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