BOOK RELEASE MEETING
US Pension Reform: Lessons from Other Countries
Jacob Funk Kirkegaard, Peterson Institute
Martin Neil Baily, Brookings Institution
Peterson Institute for International Economics, Washington, DC
February 18, 2009
The Institute released its new book US Pension Reform: Lessons from Other Countries by former Senior Fellow Martin Neil Baily, now at the Brookings Institution, and Research Fellow Jacob Funk Kirkegaard at an event held February 18, 2009. The new study analyzes the policy responses by other developed countries to the problems now facing Social Security and the US pension system and derives an extensive list of the lessons learned from their approach to the problems of ageing populations and assuring adequate retirement income.
The authors conclude that the design of the US Social Security system is fundamentally sound and that a transformation of its basic tenets is neither warranted nor wise. Instead, they propose a series of targeted changes to parts of the system with the cost of reforms distributed across generations. These include benefit cuts for high-income Americans through integrating tax breaks for private pension savings more closely with Social Security; additional strengthening of the direct link between life expectancies and retirement ages; add-on individual accounts; and new revenue raising measures. These proposals should be extremely timely now that President Obama has indicated his intention to initiate significant reforms of the Social Security program.