Are Disappearing Employer Pensions Contributing to Rising Wealth Inequality?

Abstract

the option of a defined contribution plan rather than the NYSTRS defined benefit plan. For these employees, employers will contribute 8% of salary to the State University of New York Optional Retirement Plan. Employees will contribute at the same sliding scale rates as those in the defined benefit plan. South Carolina. Act 278, Laws of 2012 (House Bill 4967), makes various changes affecting South Carolina Retirement System benefits for new general members and members of the Police Officers' Retirement System.  Vesting. For new general and Police Officer members as of July 1, 2012, the vesting requirement will increase from five years to eight years for eligibility for service retirement benefits, disability benefits based upon non-work-related injuries, in-service death benefits, the ability to purchase non-qualified service credit (i.e., "air time").  Final Average Compensation. For new general and Police Officer members as of that date, final average compensation will be based on the member's five highest years of earned compensation instead of the three highest years.

Social Security Wealth, Inequality, and Lifecycle Saving

“…However, we estimate that only $18 trillion of the $22 trillion in SSW is payable under current law. For some perspective, the published measure of household net worth in the SCF was around $87 trillion in 2016 (Bricker et al, 2017) and the PDV of Defined Benefit (DB) pension benefits was $18 trillion (Sabelhaus and Volz, 2019). Our estimate of SSW in 2016 is higher-$29 trillion-using Office of the Chief Actuary (OACT) discount rates.…”

“…For example, one could ask, "as of a given age prior to retirement, how does projected retirement readiness vary within and across generations?" This sort of question is appropriately answered using expected values for SSW (and DB pension benefits) as of retirement age (Jacobs, et al, 2019 (Sabelhaus and Volz, 2019).…”

Simulating How Large Policy Proposals Affect the Black-White Wealth Gap

“…Third, several presidential candidates during the 2019/2020 presidential election cycle suggested canceling student loan debt and making college debt-free (Warren 2020 ; Sanders 2020 ; Biden 2020 ). Since Black students are more likely to borrow for their education and since Black graduates’ debt balances tend to be greater than is the case for White Americans, this proposal should automatically shrink the Black-White wealth gap.…”

Changing Wealth Accumulation Patterns: Evidence and Determinants

“…wealth-the present value of future income (minus future contributions) that households expect to receive from DB pension plans. To present a more complete analysis of household wealth, we add to the SCF definition of net worth a measure of the present value of DB wealth, following Sabelhaus and Volz (2019). Our resulting wealth definition, like the SCF's, does not include future Social Security or Medicare benefits (or taxes), which often comprise a significant share 4 In the dataset, these variables correspond to categorical variables "RACE", "MARRIAGE", "HHSEX", an "EDCL" categorical variable adjusted with information from "EDUC" to provide more granularity with less than high school and graduate school specifications, and a household income category variable generated from "INCOME," all as defined in https://www.federalreserve.gov/publications/files/scf17.pdf.…”