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Pension Reform and Longer Life Expectancy: Is the US doing enough? Presentation: Edward Whitehouse Head of Pension Policy Analysis, OECD Social Policy Division Discussant: Sandy Mackenzie AARP

Event Description:

In countries like the US, where the mandate to provide for retirement is relatively small, the risks borne by taxpayers and contributors are also commensurately smaller and so are the gains from diversifying the risk across generations. The small mandatory retirement system means that voluntary, private provision for old age is widespread. Often, this takes the form of individual or employer-based plans in which life expectancy risk is borne by individual retirees.

Continuous growth in life expectancy, often at a more rapid rate than forecast, creates financial challenges for retirement-income systems. Most OECD countries have responded with pension reforms to contain rising pension costs. Around two-thirds of these reforms contain measures that will automaticallylink future pensions to changes in life expectancy. This quiet revolution in pension policy means that the financial costs of longer lives will be shared between generations subject to a rule, rather than spreading the burden through potentially divisive political battles.

Biographies:

Edward Whitehouse is a Principal Administrator in the Social Protection unit of the Social Policy Division at the OECD. A British national, Mr. Whitehouse also works on pensions and retirement-income systems.  He has previously worked as editorial writer and as social affairs correspondent of the Financial Times and was co-editor of the World Bank’s Pension Reform Primer program.  He has taught at Oxford University and University College, London and advised numerous governments on pension reform.

George A. (Sandy) Mackenzie recently joined AARP’s Public Policy Institute to lead work on private pensions.  Mr. Mackenzie, who is Canadian, studied economics at Dalhousie University, Halifax and economics and philosophy at Oxford University, which he attended on a Rhodes Scholarship. After returning from Oxford, he taught economics at the University of Western Ontario for one year, and spent three years on the staff of the Canadian Department of Finance. He then took up a position on the economic staff of the International Monetary Fund, where he worked for 28 years.  As a senior staff member of the Fund, he led technical assistance missions to advise over a dozen countries on tax, social expenditure, budgetary and pension issues. His book Annuity Markets and Pension Reform was published by Cambridge University Press in 2006. After leaving the Fund and prior to joining the staff of the AARP, he was a visiting faculty member and lecturer at the University of California Washington Center (where he continues to lecture). 

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