Retirement systems should be conceived of as long-term financial contracts under which workers' contributions today are exchanged for benefits paid to the elderly tomorrow. Such contracts are said to be well-managed if the transactions are handled in an affordable, reliable, and efficient manner. Yet all pension systems are forced to operate under a multitude of constraints including participants' ability and willingness to save; the availability of assets with which to convert current saving into future retirement benefits; the limitations of imperfect capital markets; political influences imposed by stakeholders; county macroeconomic conditions; and as we are becoming increasingly aware, global business cycles. If pensions are to continue to meet the needs of an aging world, it is imperative to prepare for emerging challenges as these systems evolve through time.
In these remarks we first show how global demographic change is driving pension change throughout the world. Next we describe and compare developments in old-age provision over the last decade in Australia and the United States, and outline the key issues facing retirement systems in both nations. There are many differences between the experiences of the two countries, but as we shall show there are also common themes. Finally we identify key pension reform design issues facing Australia and the US in the upcoming decades.
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Martin Feldstein & Jeffrey B. Liebman, 2001.
"Social Security,"
NBER Working Papers
8451, National Bureau of Economic Research, Inc.
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Other versions:
Feldstein, Martin & Liebman, Jeffrey B., 2002.
"Social security,"
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324
Elsevier.
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