Suchergebnisse

Formal pension systems are an important means of reducing poverty among the aged. In recent years, however, pension reform has become a pressing matter, as demographic aging, poor administration, early retirement, and unaffordable benefits have strained pension balances and overall public finances.Pension systems have become a source of macroeconomic instability, a constraint to economic growth, and an ineffective and/or inequitable provider of retirement income

Formal pension systems are an important means of reducing poverty among the aged. In recent years, however, pension reform has become a pressing matter, as demographic aging, poor administration, early retirement, and unaffordable benefits have strained pension balances and overall public finances.Pension systems have become a source of macroeconomic instability, a constraint to economic growth, and an ineffective and/or inequitable provider of retirement income.

The recently enacted Tax Reform Act of 1986 contains a number of pension policy provisions including faster vesting for private‐sector, single‐employer pension plans and imposing tax penalties on preretirement pension plan distributions that are not saved until retirement age. Since pensions are a long‐term commitment, the impact of pension policy changes may not be fully realized for a number of years. For that reason, the effects of the Tax Reform Act's pension provisions are investigated using both short‐run and long‐run simulation models. Faster vesting would immediately entitle an additional 1.9 million pension plan participants to pension benefits at retirement. This increase would not, however, be translated directly into significant gains in pension recipiency for workers currently in their 50s. Nevertheless, by the time the baby boom generation retires, faster vesting and lump‐sum penalties could provide more retirees with pensions and increase the standard of living of pension recipients.