This PDF is a selection from an out-of-print volume from the National Bureauof Economic Research

Volume Title: Privatizing Social Security

Volume Author/Editor: Martin Feldstein, editor

Volume Publisher: University of Chicago Press

Volume ISBN: 0-226-24101-7

Volume URL: http://www.nber.org/books/feld98-1

Publication Date: January 1998

Chapter Title: List of Contributors, Indexes

Chapter Author: Martin Feldstein

Chapter URL: http://www.nber.org/chapters/c6256

Chapter pages in book: (p. 457 - 472)

Contributors

Alan Budd HM Treasury Parliament Street London SWlP 3AG, England

Nigel Campbell HM Treasury Parliament Street London SWlP 3AG, England

Joaquin A. Cottani Argentina Financial Office 1901 L Street NW, Suite 606 Washington, DC 20036

David M. Cutler Department of Economics Harvard University Cambridge, MA 02138

Gustavo Demarco Superintendencia de AFJP Tucuman 500 1049 Buenos Aires, Argentina

Richard Disney Department of Economics Queen Mary and Westfield College London El4 NS, England

Malcolm Edey Head of Economic Analysis Reserve Bank of Australia 65 Martin Place Sydney NSW 2000, Australia

Sebastian Edwards Andersen Graduate School of Business University of California at Los Angeles 110 Westwood Plz., Suite C508 Box 95 1481 Los Angeles, CA 90095

Martin Feldstein NBER 1050 Massachusetts Avenue Cambridge, MA 02138

Alan L. Gustman Department of Economics Dartmouth College 6106 Rockefeller Hanover. NH 03755

Laurence J. Kotlikoff Department of Economics Boston University 270 Bay State Road Boston, MA 02215

Jeffrey Liebman John F. Kennedy School of Government Harvard University Cambridge, MA 02138

Olivia S. Mitchell University of Pennsylvania The Wharton School 3641 Locust Walk, 304 CPC Philadelphia, PA 19 104

457

458 Contributors

John Piggott School of Economics University of New South Wales Sydney NSW 2052, Australia

James M. Poterba Department of Economics MIT

Cambridge, MA 02 139

Carlos Sales-Sarrapy Protego and ITAM Sta. Catarina 267 Mexico, DF 01060, Mexico

€32-350

Andrew Samwick Department of Economics Dartmouth College 6 106 Rockefeller Hall Hanover, NH 03755

Thomas J. Sargent Hoover Institution HHMB-Room 243 Stanford University Stanford, CA 94305

Sylvester Schieber Watson Wyatt Worldwide 6707 Democracy Blvd., Suite 800 Bethesda, MD 208 17

Anita M. Schwarz The World Bank 1818 H Street, NW Washington, DC 20433

John B. Shoven Dean’s Office of Humanities & Sciences Building One Stanford University Stanford, CA 94305

John Simon Reserve Bank of Australia GPO Box 3947 Sydney NSW 2000, Australia

Fernando Solis-Sober6n Consar and ITAM Camino Sta. Teresa 1040 Mexico, DF 142 10, Mexico

Thomas L. Steinmeier Department of Economics Texas Tech University Lubbock, TX 79409

Aaron Tornell Department of Economics Littauer M-6 Harvard University Cambridge, MA 02138

Jack L. VanDerhei Temple University School of Business Management Philadelphia, PA 19 122

Alejandro E Villag6mez-Amezcua Department of Economics CIDE Can: Mexico Toluca 3655 Mexico, DF 01210, Mexico

David A. Wise Kennedy School of Government Harvard University Cambridge, MA 02138

Stephen P. Zeldes Graduate School of Business Columbia University 3022 Broadway, Uris 605B New York, NY 10027

Author Index

Aaron, Henry, 19n38 Abel, Andrew, 211142 Access Research, 374, 3 7 3 Advisory Council on Social Security, United

States, 215112 Allen, Everett T., 399n9 Altonji, Joseph, 111123, 276 American Council on Life Insurance, 443 AMP Society, 79n24 Anderson, Patricia, 326 Andrews, Emily, 434 Arrau, Patricio, 154, 157nn33,34, 164,266 Arrow, Kenneth J., 13n27 Arthur Andersen, 441t Atkinson, Anthony B., 40.5113 Atkinson, M. E., 701110 Auerbach, Alan, 3n3, 81121, 19-20n38,

157n33, 158, 164,220,228n19.266, 269n3,276n12,294,296,301,307

Auten, Gerald, 71118, 220, 227

Bacon & Woodrow, 129t Baeza Valdis, Sergio, 48, 49 Bajtelsmit, Vickie L., 376n14, 397 Ban; Nicholas, 405n3 Barro, Robert J., 11 Bateman, H., 69n7,70,79n24, 81nn26, 27,90 Bates, H. W., 33 Baumol, William, 429, 430 Berger, Allen, 444 Bernheim, B. Douglas, lln23 Bernstein Research, 366, 377 Bisignano, J., 76n22

Blake, D., lOln3, 106n6, 118, 119 Blinder, Alan, 11 Board of Trustees, Federal Old Age and Survi-

vors Insurance and Disability Trust Fund, 218n5,221,224,225,313nl, 325n20, 3471144

Bodie, Zvi, 354n56, 370 Borcherding, Thomas E., 422n18 Boskin, Michael, 226,25On40,274n9 Bosworth, Bany, 34n2.52, 1451121 Britten-Jones, M., 69n7, 77,781123 Brown, Colin, 92 Brown, Stephen J., 401 Browning, Edgar, 6n17, 219 Brugiavini, Agar, 94, 131, 317n9, 325n17 Buchanan, James, 8 Budd, Alan, 314 Burger Torres, RauI, 48.49 Bustamante Jeraldo, Julio, 42t Bustos, Ralil, 45

Campbell, Nigel, 314 Carroll, Robert, 71118,220,227 Carstens, Agustin, 144n18 Caswell, Jerry, 434 Chamley, Christophe, 294 Chand, S. K., 99 Cheyre, Hernh. 38117 Cifuentes, R., 164 Clark, Robert, 442 College Retirement Equities Fund (CREF),

Corcoran, S., 79n24 440t

459

460 Author Index

Corsetti. Giancarlo, 19-20n38, 1571133 Cottani, Joaqnin, 314 Covick, 0. E., 70n I I , 79 Cox-Edwards, Alejandra, 38, 54 Creedy, J.. 701110 Cummins, J. David, 444

Dahrendorf, R., 123 Deaton, Angus. 308 Demarco, Gustavo, 178, 1811, 183t, 184115,

Department of Social Security, Australia,

Department of Social Security, United King-

Diamond, Peter, 11.45, 54. 58nl, 153n30,

Dicks-Mireaux, Louis. 5n12, 218116, 226 Dickson, Joel. 430 Dilnot,A.. 101113, 117, 118, 119 Disncy, R., IOln3, 112, 114. 118, 129, 131,

3 I7n9,325n17,332n35 Doggette. H.. 417, 420 Dornbusch, Rudiger, 34n2, 14512 1 Driscoll, Mary, 437t Duleep. Harriet, 328n27 Duran, Viviana, 1831

20 I , 203t, 204t, 3 14

65n3,8 In26

dom, 1161110

I54,306,363nl, 392,444,445135

Edey, M., 69n7,76,77,78n23 Edwards, Alejandra, 34n2, 3.5113 Edwards, Sebastian, 34n2, 35113, 52,446,452 Elton. Edwin J., 430n24 Employee Benefit Research Institute, 375111 I ,

Esposito, Louis, I I 383

Feenberg, Daniel. 7n 18 Feldstein, Kathleen, 250n40 Feldatein, Martin, I n , 3nnl. 2, 4nn5, 6, 51112,

7, 8. 11, 12, 131127, 17n36, 18, 19n37, 19-20n38,21n42,22nn44,45,52n19, 117, 119, 129, 145nn20,21,215,217n3, 218nn4,6,219.220,226,227,250n40, 266,274,3 13-14n3.335,363nl, 448

Field, F., 123 Fields, J., 444n33 FitzGerald, V., 69n7. 70, 731117, 78 Formica, Andrew, 93 Foster, R. A,, 71f, 75f, 76 Freebairn, J., 69117 Friedman, Benjamin, 387 Fuentes Silva, Roberto, 42 Fullerton, Don, 266, 301

Gale, David, 306 Gardner, Linda, 4441133 General Accounting Office, 350n49, 370n7,

378, 37%. 420 Gil Diaz, Francisco, 1441118 Goetzrnann. William N., 401 Gohale. Jagdish, 3113, 267 Goldstein, M., 12n24 Gonzales. Rodolfo, 422n 18 Goodfellow, Gordon P., 375, 376. 3771, 394,

Gordon, R., I1 Grace, Martin F., 444n33 Greenwich Associates, 437-38 Gruen, F. H., 65113 Gustman. Alan L., I8,314n4,315n5,324n15,

325n19,326,327t. 332,34n41,354n55

398f, 446t

Haindl, Erik, 52 Harberger, Arnold C . 6n 17, 34n2, 2 19 Hausman, Jerry, I I Hayashi, Fumio, I 1 1123,276 HayIHnggins Co , 442t Higgs, B , 79 Hinz, Richdrd P, 377.378n 17, 38 In2 I Hoexter, Elsie, 403, 431 Honoka, Charles, 12n24 Hsin, Ping-Lung. 405n4,406t, 423,424,419,

Huang, He. 266, 308.309f Hnbbard. R G , 120 Hwtead, Edwin C ,431,442

440n32.445

Ibbotson Associates, 363 Iglesias, A., 39 Imrohorogln, Ayse, 308 Imrohoroglu, Selahattin, 266, 308, 309f Instituto Mexican0 del Seguro Social (IMSS),

158 Investment Company Institute (ICI), 3721,

426.435.436 Ippolito, Richard A,, 430

Jaeger, A,, 99 James, Estelle, 424 Johnson, P., 101113, 104, 114 Joines, Douglas, 308 Jubter. F. Thomas, 324nl5,354n55,380,384

Kalisch, D., 811126 King, Francis P., 386 Kingston, Geoffrey. 8 lnn26, 27, 93 Knox, D. M., 70n10,75

461 Author Index

Kotlikoff, Laurence, 3113, 8n21, 11x123, 18, 19-20n38, 1571133, 158, 164, 215,220, 2281119,265,266,267,269n3.271, 273n6.276,294,296,301,307,387, 389,4121112,448

Krusell, P., 310

Laban, Raul, 34112 Laitner, John, 380, 384 Lakonishok, Josef, 4301124.434 Larrain, Felipe, 35113 Larrain A., Luis, 38nn6, 7 Leibfritz, W., 68t Leimer, Dean, 11 Lesnoy, Selig, 11 Lewis, M. K., 70111 1 Lillard, Lee A,, 328n25 Limbacher, Patricia, 417 Lind, R. C., 131127 Lo Vuolo, Rubtn, 181t Liiders, Rolf, 36114

McCarthy, David D., 377,378n17,381n21 McDermed, Ann, 442 Macfarlane, I., 76 MaCurdy, Thomas, 2481136 Marfin, Manuel, 52 Margozzini Cahis, Francisco, 45.46 Mehay, Stephen, 422n 18 Meller, Patricio, 35113 Merton, Robert, 370 Mesa-Lago, Carmelo, 39,45, 52 Milne, Deborah, 383n22 Mitchell, Olivia S., 2, 18, 59n3, 130, 325119,

345n41,389n31,403nl, 404n2,405n4, 406t, 407,408t, 409,410-11t, 415,416, 417,418-19t, 420,421,423,424,434, 435,439,440n32.444,445,448

Morande, Felipe, 52 Morling, S., 78 Murphy, N., 4441133 Mussa, Michael, 121124 Myers, Robert, 38117 Myers, Robert J., 403,414

National Audit Office, United Kingdom, 110

Ortuzar, P., 5 1 t Owen, M., 123

Palacios, Robert, 423,424 Panis, Constantijn, 3281125 Patterson, N., 81n26

Paxson, Christina, 308 Pellechio, Anthony, 11 Piggott, J., 69n7,70,79n24,81nn26,27,90 Piiiera, Jose, 38, 39, 47, 57 Pommerehne, Werner W., 42211 18 Porter, M., 69n7 Posadas, Laura, 184115, 200 Poterba, James, 51112, 18, 145n2i. 218116,

226,261,335,364,366,368,369115. 378,3891131,453

Quinn, Joseph, 403nl,444,448

Raffelhueschen, Bemd, 266 Reid, Gary, 404n2,405n4,406t, 408t. 409,

410-llt, 420n15,421,423,424 Retirement Income Inquiry, United Kingdom,

121nll Richardson, C., 791124 Rippe, Richard, 5nn12, 13, 13, 218116, 226,

228n21 Robinson, I., 69n7 Rofman, Rafael, 198,204t, 409118 Rogers, Casey, 374 Rogers, Diane Lim, 266, 301 Ross, Stephen A,, 401

Sabelhaus, John, 267 Samuelson, Paul, 4,51110, 19n38, 117, 218,

306,358,370 Samuelson, William, 370 Samwick, Andrew, 51112, 8, 17n36, 18,215,

220n7,261,274,325n17,335,448 Sargent, Thomas, 266, 308, 309f Schieber, Sylvester J., 375, 376, 377t, 394,

Schmidt-Hebbel, Klaus, 19-201138. 154,

Schneider, Friedrich, 422n I8 Schulthess, Walter, 178, 181t. 183t, 184n5,

Secretary of State for Social Services, United

Seidman, Lawrence, 19-20n38 Sequeira, Francisco, 41 Shigehara, K., 99 Shleifer, Andrei, 4301124.434 Shoven, John, 245n29.2481136 Shutan, Bruce, 43 In25 Siegel, Jeremy, 363 Skinner, J. , 120 Smith, A., 310 Smith, Robert, 440n32

398f. 446t

157nn33,34, 160, 164,266

201, 203t. 204t, 205

Kingdom, 107, 108, 110

462 Author Index

Social Security Administration, United States, 225,347,416,417

Solis-Soberon, F., 1391112, 1441117 Spivak, Avia, 276, 387, 389 Springsteel, Ian, 437t Stears, G., 101113, 104, 112n8, 114 Steinmeier, Thomas L., 18, 314114, 315115,

325n19,326,327t, 332,345n41 Stirparo, Gustavo, 204t Subbaraman. R., 78 Summers, Lawrence, 163 Sunden, Annika, 404n2,405n4,406t, 407,

415,416t, 417,418-19t, 420,423,424

Tease, W. J., 76 Technical Panel on Trends and Issues in Retire-

Thom, J., 75 Timme, S., 4441133 Turner, John A,, 377, 378n17, 381x121

ment Saving, 4451136

U.S. Bureau of the Census, 2251117 U.S. Department of Labor, 366, 372, 432,

Uthoff, Andras, 200 433t

Valck V., Eugenio, 44, 53t Valdts-Prieto, Salvador, 45, 54, 154, 155,

1571133, l64,363n1,412n12,421,423, 425,444,445n35

VanDerhei, Jack L., 3761114. 3831122, 394, 395f, 396n5.397.398f

Vanguard, 426n21,428t, 429,430 Venti, Steven F., 364, 366, 368, 369n5.378 Villagomez, Alejandro, 144nn17, 19, 1641140 Vishny, Robert, 4301124,434 Vittas, D., 39, 40111, 45, 46

Walford, J., 130t Walker H., Eduardo, 44,53t Walsh, C., 69117 Warshawsky, Mark J. , 387,3891131,444 Watanabe, Noriyasu, 425 Weiss, Mary A., 444 Whitehouse, E., 118, 129, 131, 317119,

3251117.3321135 Wilkinson, J., 76 Willis, Ralph, 79n25 Wise, David, 11, 18, 335,364, 366, 368,

369n5.378.453 World Bank, 209,407116,422, 425,4451135

Yakoboski, Paul, 383n22,394,395f, 396115,

Yuengert, Andrew M., 444n33 398f

Zeldes, Stephen P., 59x13. 120,416,445,448 Zi, Hongmin, 444n33

Subject Index

Administrative costs: Australian superannua- tion, 96; new Chilean pension system, 45-46,50-52,59; U.K. pension systems, 129-30

Advisory Council on Social Security (1994- 96), United States: personal security ac- count plan of, 262; proposal to use pay- roll tax to finance IRA and social security, 316; Technical Panel on Trends and Issues in Retirement Savings, 313; trust fund investment option, 444

AFJP (private pension fund management), Ar- gentina, 186-87, 192f; commissions charged, 198; investments and capitaliza- tion, 193, 195f, 196-99

Retiro), Mexico: capital, reserves, and in- vestments of, 152; evaluation of, 153-54; of N S S under new system, 156; pension fund management, 146, 150-51; pro- grammed withdrawals from, 147

AFPs (administradoras de fondos de pensi- ones), Chile: administrative costs of, 44- 46,409-12; companies managing individ- ual retirement accounts, 39-40, 61; conditions for liquidation of, 46-47; fees and commissions charged by, 45; invest- ment reserves of, 44; investments by, 41-44; mandatory and voluntary contribu- tions to, 41-42; participants switching among, 61; profitability of, 46; regulation of, 59

AFOREs (Administradora de Fondos para el

AIME. See Average indexed monthly earnings

AK model. See Auerbach-Kotlikoff model

Annuities: Australian deferred life annuity,

(AIME)

(AK model)

93-94; Australian superannuation funds, 70, 93-94, 97; available in Chilean pen- sion system, 47-49.93; CREF pension plan, 438; market in United Kingdom, 115-16, 133; under Mexico’s reformed pension system, 147; options for IRAs and 401(k)s, 366-67; proposed inflation- indexed Australian, 93; provided by so- cial security, 1 1 ; TIM-CREE 383-87, 39 1 ; wealth of nominal and real, 400

Annuitization: estimates of utility gain from, 387-89.391-92. 398; in 401(k) plans, 367; savings plans requiring, 364-65; TIAA-CREF patterns, 385-87

ANSES (Administracih Nacional de la Segur- idad Social), Argentina, 190, 191f, 192f. 409-12

APPs (approved personal pension accounts), United Kingdom: contributions of mem- bers, 131-32; earnings of members, 131; employee choice of (1987-88, 1994-95), 128, 13 1; National Insurance contribu- tion rates to, 128-29

Argentina: basic universal pension, 186, 188- 89,201; decision to reform social secu- rity, 177, 179-85; evaluation of reformed pension system, 207-1 1; evolution of

463

464 Subject Index

Argentina (cum.) new pension system, 191-200; invest- ments by private pension funds, 187; na- tional saving, 200; new SIJP, 185-91; new social security system, 177-78, 186, 200-206; old pay-as-you-go system, 177-85; problem of evasion, 182-83, 209-12; technical problems of new, 207- 10. See also AFJP; JO; PAP; PBU; PC; SIJP Social security system, Argentina

Asset allocation: Australian superannuation funds, 74-77; IRAs, SRAs, and 401(k)s,

in retirement saving plans, 369-77, 396; as subject of participant education pro- grams, 383; Swiss and Chilean private systems, 90; TIAA-CREF accounts, 379- 82, 390-9 I , 397-98; U.S. Thrift Savings Plan, 377-78, 396

dom, 12 1-22

multi-income version, 301-5; overlap- ping generations of, 307; simulation of complete elimination of social security, 280-89; simulation of debt financing in transition to private system, 296-98; sim- ulation of transition to private system with consumption tax to finance benefits, 292-95; simulation of transition to pri- vate system with tax revenue financing, 289-92; simulations phasing out benefits assuming marginal benefit-tax link, 298-301

Australia: allocatcd pensions in, 93; annuities, 70, 93-94,97; assets of life insurance of- fices, 71-77; effect of unfunded social se- curity on, 8-10; employee contributions, benefits, and coverage, 63-64, 67.69-70, 83-86,94, 96; government role in pen- sion system, 63-64, 66-67, 84-87, 89-90; individual retirement accounts, 67; with new superannuation funds, 64; old unfunded pension system, 63-66, 82-83; proposals for superannuation, 93-95; saving, 68-69,77-8 I , 92-93; su- perannuation funds, 64-77, 83-87, 89-90; superannuation system, 66-70, 83-87, 9 1-93; tax policy, 66, 69-71, 83- 85,90-92,94; transition to privatized sys- tem, 64-65,96-97. See also Superannua- tion, Australia; Superannuation funds, Australia

366-67,369-77,389-9 1,394-96.399;

Assured pension (proposed), United King-

Auerbach-Kotlikoff model (AK model), 276;

Average indexed monthly earnings (AIME), 315n6,316-17,320,354

Banking system, Mexico, 173-74 Benefits: actuarial value of U S . social secu-

rity, 2-3; Argentina, 184-86, 188-90, 199; based on primary insurance amount, 315-16; basis under current U.S. social security system, 223; effect of privatiza- tion on present value of, 333-36; financ- ing in AK model of privatized social secu- rity, 279-80; under hypothetical privatized U.S. system, 347; means test- ing of Australian, 96; potential changes to in U.S. social security system, 350-52; reasonable limits in Australia, 70, 84; re- distribution in current unfunded U.S. sys- tem, 245; rules for spouse and survivor under U.S. system, 346-47; spouse and survivor in United States, 342-52; in steady-state analysis of privatization, 341-43; US. system inflation-indexed, 276; under voluntary and mandatory pri- vatization scheme, 340

Benefit-tax linkages: in simulation of phasing out social security benefits, 298-301; workers’ perception of, 308,3 11

Caja Costanicense de Seguridad Social (CCSS), Costa Rica, 409-12

Capital accumulation, 3 Capitalization regime (CR), Argentina,

Capital markets: Chile, 52-55, 58; Mexico,

Chile: AFPs (pension fund administrators),

185-86

166-67

39-44.46-47, 59, 61,409-12; annuities, 47-49; asset allocation in private system, 90; benefits in welfare system, 61; choices available for retiring workers, 47-48,65; current defined-contribution pension system, 34; deficit finance to cover losses of payroll tax revenue, 2781114; disability pensions, 48; early re- tirement option, 48; economic growth (1985-95), 33,37,44,265; effect of pen- sion reform, 52-55; fiscal policy related to new social security program, 51-52; government role in pension system, 46-47; guarantee of minimum pensions, 46; indexation, 36,40t, 41n12,61; indi- vidual retirement accounts, 39-47, 50, 2781114; lump sum withdrawals, 48-49;

465 Subject Index

mandatory participation in reform sys- tem, 41-42; old pay-as-you-go pension system, 37-38,47,49-50; pensions for nonparticipants, 47; pensions under new system, 47-49; phased withdrawals of pensions in, 93; private pension fund asset allocation, 45-46; privatization poli- cies, 34-37, 2781114; public policy re- lated to pension reform, 34-37; public spending related to pension reform, 5 1-52; rate of return in reformed pension system, 61; recognition bonds, 50-51, 59-60; reformed social security system, 38-47; success of social security priva- tization, 33-34,59,265; taxation of AFP contributions, 42; unidad de fomento, 36, 40t, 411112, 61. See also AFPs; Social se- curity system, Chile

College Retirement Equity Fund (CREF): ad- ministrative costs and expenses, 438-40. See also TIAA-CREF

CONSAR (Comisi6n Nacional del Sistema de Ahorro para el Retiro), Mexico: func- tions of, 151-52; regulatory agency under reformed pension system, 141, 150-51

in extended AK model, 308-10; under funded social security system, 22-27; in- centives to substitute present for future, 27 1; pay-as-you-go system age-related,

Contributions: Australian employer and em- ployee, 67; to Chilean AF'Ps, 41, 59; in privatized social security system, 2; taxa- tion of Australian superannuation, 69-70

Contributions, Mexico: to INFONAVIT hous- ing subaccount, 150, 154-55; under re- formed pension system, 145-46; to SAR system, 139-40; to social security sys- tem, 136-37

Contributions, United Kingdom: to National Insurance Fund, 103-5; return on basic state pension, 117-18; by self-employed to National Insurance, 105; to SERPS and National Insurance Fund pension sys- tems, 103-5, 119

CR. See Capitalization regime (CR), Argentina CREE See College Retirement Equity Fund

Consumption: distribution across households

267-7 1

(CREF)

Data sources: on annuity demand, 383-84; asset allocation in 401(k) plans, 372-76; asset allocation in IRAs, 371; Health and

Retirement Survey (HRS), 345,368-69; information on retirement saving pro- gram participation, 365; investment deci- sions in retirement saving plans, 369-70; for long-term return on assets, 363; for participant retirement and financial plan- ning, 379; private pension plans in United States, 432; for simulations of pension system preference function, 326; Survey of Income and Program Participa- tion (SIPP), 347-49,368-69; for TIAA- CREF accounts, 379

Discount rate. See Interest rates Distribution, intergenerational: lump sum re-

distribution authority (AK model), 277- 78,281-89; in pay-as-you-go social secu- rity, 245,267-70

Distribution, intragenerational: in AK model of social security privatization, 276-80

Earnings: calculation of average indexed monthly earnings (AIME), 3 15116, 3 16; State Earnings-Related Pension Scheme (SERPS), United Kingdom, 100, 102-3, 106-12, 118-20, 125, 127, 129, 131; treatment under U.K. state earnings- related pensions, 102-4, 106-12; treat- ment under U.S. social security of two- earner couples, 354

Employees: choice of 401(k) investment op- tions, 374; contributions to Australian su- perannuation funds, 63-64, 67, 69-70, 83-86; contributions to U.K. pension funds, 113; eligibility and contributions to Mexican IVCM-IMSS pension system, 138; payroll tax in United States, 2; super- annuation guarantee coverage in Austra- lia, 94; Thrift Savings Plan of U.S. gov- ernment, 377-79

Employers: choice of superannuation fund in Australia, 65; contributions in Argentin- ian reformed system, 207; contributions to Australian superannuation funds, 63- 64.67.69-70, 83-86; contributions to Mexican IVCM-IMSS pension system, 138; contributions to U.K. pension funds, 112-13; 401(k) investment options of- fered, 374, 435; matching employee TSP contributions, United States, 378; payroll tax in United States, 2

Federal Retirement System. See Thrift Savings Plan (TSP), United States

466 Subject Index

Federal Retircment Thrift Investment Board See Thrift Savings Plan (TSP), United States

funds in Australian, 71-77; indexation in Chile using unidud defoinento (UF), 36. 40t, 41n12: Mexican, 136. See ulsu Capi- tal markets

model, 266, 276-80; Australian tax rules for superannuation, 69-70, 83-85; Chil- ean spending under social security re- form, 5 1-52; United Kingdom, 120

401(k) plans: administrative costs and ex penses of, 435-37; asset allocation, 369-77; characteristics of participants in, 367-69; investment options, 394-95; par- ticipation in, 366-67; participation in United Statcs by age and income (1991), 367-68; withdrawal constraints, 394-95

FOVISSSTE (Fondo de la Vivienda del Insti- tuto de Seguridad y Servicios Sociales de 10s Trabajadores del Estado), Mexico, 136

Financial sector: assets of superannuation

Fiscal policy: Auerbach-Kotlikoff dynamic

Government role: Australian superannuation system. 63-64,66-67,84-87,89-90; Chilean pension reform, 51-52; in Chil- ean pension system, 46-47; contributions to Mexican IVCM-IMSS pension system, 138; in U.K. pension system, 99-100

394-95,397,401 Guaranteed investment contracts (GICs), 374,

Health and Retirement Survey (HRS), 345,

Home responsibilities protection, United King- 368-69,383,391

dom, 101

IMSS (Instituto Mexican0 del Seguro Social), Mexico: contributors to SAR defined- contribution system, 139-40; IVCM- IMSS program. 138, 142-44; old pension system coverage, 136-37; replacement rates Lo new pension system, 147-48; role under new pension system, 151, 153-56

tem, 347; with privatization, 271; for pri- vatized system, 24; in social security, 271-72: U.S. social security system. 347-50

Income: under Australian superannuation guar- antee coverage, 94; Supplemental Secu-

IncenLives: hypothetical privatized U.S. sys-

rity Income (SSI), United States, 245; support for U.K. pensioners, 116, 120-21; unearned, 354-55

Kingdom, 116-17 Income distribution: Mexico, 156-57; United

Income tax liability deferral, 366 Indexation: Chile, 36,40t, 4111 12,6 I ; contribu-

tions and benefits with inflation indexing, 250-53

Individual retirement accounts: introduction in Australia (1996-97), 67; recognition bonds in Chile, 50, 278n14: in reformed Chilean social security system, 39-47

Individual retirement accounts (IRAs), United States: asset allocation, 369-77; charac- teristics of participants in, 367-69; partici- pation in, 366-67; participation by age and income (1991), 367-68. See also Mandatory individual retirement ac- counts (MIRAs)

INFONAVIT (Instituto del Fondo Nacional de la Vivienda para 10s Trabajadores), Mex- ico: function under new pension system, 154-55; housing agency, 136, 150-51

INP (Instituto de Normalizacion Previsional), Chile, 409-12

Insurance: assets of Australian life insurance offices, 7 1-77: primary insurance amount (PIA), 315-19; social security as longev- ity, 276

Insurance industry: administrative expenses and costs of, 443-44

Interest rates: effect on voluntary and manda- tory privatized system, 335, 337-40; in- fluence on choice of private IRA or tradi- tional social security, 355, 357, 359: in steady-state analysis of privatized sys- tem, 34 1-42

fund assets, 74-77; choices for IRAs and 401 (k)s, 366; guaranteed investment con- tracts (GICs), 374, 397; by pension funds in Chile, 52-55; by private pension funds in Argentina, 187-88; U.K. private pen- sion funds, 100

ISSSTE (Instituto de Seguridad y Servicios Sociales de 10s Trabajadores del Estado), Mexico: contributors to SAR defined- contribution system, 139-41; insurance for public sector workers, 136-37

Investments: of Australian superannuation

JO (ordinary retirement pension), Argentina, 189

467 Subject Index

Labor force participation: effect of privatizing social security on, 332-33; rates in Aus- tralia (1970-96). 80; rates in United King- dom, 106; in steady-state analysis of pri- vatization, 342-43

Labor markets: distortions related to social se- curity tax, 4 4 , 2 6 6 ; effect of Chilean pension reform on, 52-55; with reforms in Mexico, 163

hypothetical, 277-78, 28 1-87 Lump sum redistribution authority (LSRA),

Mandatory individual retirement accounts (MIRAs): benefits under current law maintained by, 253-56; chance of outliv- ing savings of, 264; conditions for volun- tary contributions to, 246; effect of transi- tion on age cohorts, 241-43; investment of and returns to, 221-23; nonredistribu- tion with, 245-46; payroll tax in, 237-40; privatized, 217, 222; required contributions with privatization, 222; risks in, 247-50; transition to funded, 216; transition with modification of infla- tion indexing, 250-53

Means testing: Australia, 96; for U.K. welfare benefits, 100

Mexico: costs of current and new pension sys- tems, 156-63, 167-71; effect of pension system reform, 156-57; government role in pension system, 138; National Devel- opment Plan, 144-45; new defined- contribution system, 139-41, 145, 167; old pay-as-you-go system, 135-44; pen- sion reform, 145-56; subsidies for pro- grams with deficits, 136-37; tracking for new retirement system, 421. See also AFOREs; CONSAR; FOVISSSTE; IMSS; INFONAVIT ISSSTE; Pension system, Mexico

accounts (MIRAs)

penses of, 2,426-3 1

MIRAs. See Mandatory individual retirement

Mutual funds: administrative costs and ex-

National Development Plan (1995-2000).

National Health Service, United Kingdom: Mexico, 144-45, 167

some funding from National Insurance contributions, 103-4

dom: contributions of self-employed to, 105; financing other benefits with Na-

National Insurance Fund (NIF), United King-

tional Insurance contributions (NICs), 103-4; pay-as-you-go operation of, 104-5

Old age, survivors, and disability insurance program (OASDI), United States: revc- nues, benefits, and costs, 412-15

Old age and survivors insurance (OASI), United States: administrative costs, 409-12; trust fund, 414

OLG model. See Overlapping generations Overlapping generations: in AK model, 307;

model, 20-23, 306; receipts and pay- ments in unfunded and privatized pro- grams, 22-23

PAP (additional pension for permanence), Ar- gentina, 186, 188-89

Pay-as-you-go system: age-related consump- tion, 267-7 I ; in Argentina, 177-85; de- cline in payroll tax under, 223; economic effects of, 3-8, 267; fiscal burden of, 269-70; intergenerational distribution in, 245, 267-70: in Mexico, 135-44; return on, 267, 357-58; transition to private sys- tem from, 22-27; U.K. National Insur- ance Fund as, 104-5; U.K. public, 100

Payroll tax: additional payments with transi- tion to funded system, 216; in AK model of privatized social security, 278-80; in Argentina, 177-78.212; deadweight loss of U.S. social security, 3-8, 17, 216; de- cline in pay-as-you-go system, 223; ef- fect of existing U S . , 236; effect of priva- tization on present value of, 333-36; increase to meet benefits, 270; with modi- fied inflation indexing, 250-53; obliga- tion and surcharge under MIRA system, 222; potential efficiency gains from elimi- nating, 272-73; as proportion of taxed in- come in United States, 2; reduced burden with privatization, 239-40; with shift to funded social security system, 215; in steady-state analysis of privatization, 341-43

PBU (basic universal pension), Argentina, 186, 188-89,201

PC (compensatory pension), Argentina, 186. 188-89

Pension Benefit Guaranty Corporation, United States, 43 1

Pension funds: AFP management of private Chilean, 42-44; asset allocation restric-

468 Subject Index

Pension funds (conf.) tions on private Chilean, 45-46; contribu- tions to in United Kingdom, 112-13; in- vestments in, 52-55, 100, 187; investments of private U.K., 100; manage- ment of in Argentina, 186-87, 192f. 193, 195f, 198-99; management of in Chile (AFPs), 39-47,59,61,409-12; manage- ment of in Mexico, 146, 150-51; regula- tion of in Argentina, 187-88. See also AFJP, Argentina; AFOREs, Mexico; AFPs, Chile; FOVISSSTE, Mexico; INFONAVIT, Mexico; ISSSTE, Mexico; National Insurance Fund (NIF), United Kingdom; Superannuation funds, Aus- tralia

Pension plans: administrative costs and ex- penses of private, 43 1-34; administrative costs of corporate, 436-38,443; U.K. per- sonal, 14-15, 112-14, 125-26. See also 401(k) plans; Thrift Savings Plan (TSP), United States; TIAA-CREF

Pension plans, defined-benefit: in Australia, 83; costs and expenses of private, 432-34; insuring against outliving re- sources, 364; old Mexican pension sys- tem, 143-44; of state and local govern- ment, 439; trends in administrative costs, 442; in United Kingdom, 112-15

Pension plans, defined-contribution: costs and expenses of private, 432-34; new system in Mexico, 145, 167-68; Retirement Sav- ing System (SAR) in Mexico, 139-41; of state and local governments, 439n30; Thrift Savings Plan as, 439; trends in ad- ministrative costs, 442; U.K. personal pension schemes, 112-15; in United Kingdom, 1 I2

Pension plans, private. See Pension plans, defined-benefit; Pension plans, defined- contribution

Pensions Act (1995), United Kingdom: equal treatment under, 113; reduction of bene- fits and contributions, 118; reforms to SERPS, 110-12

191-200; investments of old, 187-88: need for reform of pay-as-you-go system, 177-85; problem of evasion, 182-83, 209-12; rules of new SIJP, 185-91; tech- nical problems with new, 207-10. See also Social security system, Argentina

Pension system, Argentina: evolution of new,

Pension system, Mexico: costs of current and new, 156-63, 167-71; evaluation of new, 153-56, 167-68; evolution of IVCM- IMSS, 138-39; guaranteed minimum pen- sion under new, 149; macroeconomic im- plications of reformed, 163-66; needed reform of IVCM-IMSS system, 142-44; old, 137-38; reform of, 145-56; Retire- ment Saving System as complement to IVCM-IMSS, 139-41; substitution of funded for pay-as-you-go (1995), 135; transition to new (1995). 152

Pension system, United Kingdom: contracting out rebate, 133; cost of basic state pen- sion, 101-2; current policies for, 99; fixed basic state pension, 117-18; flat-rate ba- sic, 100-101; pay-as-you-go public, 100; personal, 114-15; private funded and un- funded, 100; proposals for reform, 120-24; role of privatization in, 124-26; second-tier, 100, 102, 122-24; State Earnings-Related Pension Scheme

Pension systems: current defined-contribution in Chile, 34; old flat-rate unfunded in Australia, 63-66, 82-83; operation in Switzerland, 89-90; return on pay-as- you-go, 358; shift to mandatory funded from pay-as-you-go, 2. See also Social se- curity systems

445-47.453-55

(SERPS), 100, 102-3, 106-12

Personal saving account (PSA), proposed,

Premium Paying Research Panel (1993), 379 Private pension fund management (AFJP), Ar-

gentina. See AFJP (private pension fund management), Argentina

Privatization: choice of public system with, 328-3 I ; definition for MIRAs, 2 17; is- sues for the United States, 18; losses and gains to, 358-59; meaning of social secu- rity, 2; policy in Chile related to, 34-37; potential and real efficiency gains from, 266,271-76, 304-5; role in U.K. pension systems, 124-26; saving, investment, and growth effects of, 270-76; simulation re- sults for gradual U.S., 228-45; simula- tion with consumption tax to pay for tran- sition benefits, 292-95; simulation with elimination of social security benefits and taxes, 280-89; simulation with income tax to pay for transition benefits, 289-92; of unfunded social security system,

469 Subject Index

16-17; welfare gains of social security, 22-25. See also Transition to privatized system

PSA. See Personal saving account (PSA), pro- posed

Public policy: Mexican National Development Plan, 144-45, 167; proposals for Austra- lian superannuation, 90-95; related to Chilean pension reform program, 34-37; related to superannuation funds in Austra- lia, 66-68, 83-85

Rate of return: Australian superannuation funds, 72-73; effect on return to capital of voluntary system, 335, 337-39; in funded social security system, 5-6; to funded versus unfunded system, 2 15-16; on mandatory social security contribu- tions, 4-5; MIRA account. 248: of new Chilean pension system, 43-45.55, 59, 61; on pay-as-you-go social security, 267, 357-58; on pension systems of United Kingdom, 117-19, 129-31; special rebate to IRA participants, 339-40: to unfunded social security program, 4-8

Recognition bonds: Chile, 50-51.59-60; hy- pothetical payment based on past contri- bution to unfunded system, 16

Regulation: of Argentinian pension funds, 187-88; importance in Mexico of strict, 173-74; in Mexico of reformed pension system, 151-53; of pension reform in Chile, 36-37, 61

Retirement: age under former Argentinian pay-as-you-go system, 178; age under new Chilean pension system, 47-48; Aus- tralian rates of early, 80; under Australian voluntary superannuation, 83; effect of compulsory superannuation on age of, 80; U.K. early, 106

Retirement History Survey (RHS), 326 Retirement Income Inquiry (RII), United King-

dom, 121-23 Retirement Income Modelling (RIM) Task

Force, Australia, 79 Retirement program, United States. See Social

security system, United States Retirement saving plans: behavior of partici-

pants in mandatory, 365: requiring annui- tization in mandatory, 364-65. See also 401(k) plans; Individual retirement ac- counts; Individual retirement accounts

(IRAs), United States; Thrift Savings Plan (TSP), United States; TIAA-CREF

RII. See Retirement Income Inquiry (RII), United Kingdom

Risk: in return on social security taxes, 14; in returns on capital, 13-14

Rollover funds, Australian superannuation sys- tem, 73-74, 77

Salary-reduction arrangements (SRAs), 369-77

SAR (Sistema de Ahorro para el Retiro), Mex- ico: creation (1992), 136, 139; fully funded defined-contribution system, 139-4 I

Saving: Argentina, 185,200-206; Australia, 68-69,77-81,92-93; Chile, 52-55.62: mandatory, 22-27; Mexico, 144, 163-66; reduction of private, 10-13; tax-deferred in retirement saving accounts, 365-66; United States, 10-11, 269: welfare loss of reduced national, 8-10

Saving, individual: effect of unfunded social security system on, 9: return to private, 358

SCF. See Survey of Consumer Finances (SCF) Self-employed workers: Chile, 59, 61; United

Kingdom, 105 SERPS. See State Earnings-Related Pension

Scheme (SERPS), United Kingdom SGC. See Superannuation, Australia SIJP (integrated system of retirement and pen-

sions), Argentina: defined, 185; disability benefits, 190; financing of, 186; institu- tional organization of, 190-91

vatization of, 2; privatization simulation eliminating benefits and taxes, 280-89; privatization simulation with consump- tion tax to pay for transition benefits, 292-95: privatization simulation with in- come tax to pay for transition benefits, 289-92

Social Security Act, United Kingdom: reforms to SERPS (1985, 1986). 109-10; transfer of personal or occupational pension (1986), 14

Social Security Administration, United States, ANYPIA program, 348

Social Security Advisory Commission (1994- 96). See Advisory Council on Social Se- curity (1994-96)

Social security: liability, 3, 16; meaning of pri-

470 Subject Index

Social security simulation model (SS-SIM),

Social security system, Argentina: basic uni- 2 17,224-28

versal pension in new, 186; effect on ag- gregate saving, 200-206; factors in deci- sion to reform, 179-85; former pay-as- you-go system (1954), 177-78; introduc- tion of private pensions (1993). 177-78; national administration of (ANSES), 190-91; reforms (1969, 1993). 177

Social security system, Chile: administrative costs, 44-46; AF'P management of pen- sion funds in, 39-40, 42-44; issues of transition from old to new, 49-52; new market-oriented, 38-47; original un- funded, 37-38

Social security system, United States: benefits affected by future insolvency, 253; condi- tions for opting out of, 358-60; effect of choice on participation in private, 359-60; effect on national saving, 10; fi- nancial problems of, 3; functions and ad- ministrative expenses and costs, 412-16; gains and losses from privatizing, 14-17, 19-27; hypothetical privatized, 444; inter- nal performance standards and quality measures, 4 17-40; marginal benefit-tax link, 273-75; old age, survivor, and dis- ability benefits, 404; participation rates using Social Security Administration as- sumptions, 328-3 1 ; potential changes, 313,350-52; privatization proposals, 444; programs of, 412; redistribution in, 358-59; simulation of complete elimina- tion of benefits and taxes, 280-86; simu- lation with tax revenue financing of tran- sition, 289-92; spouse and survivor benefit rules, 346-50; trust funds of, 414; trust fund surplus (1995), 10

Social security systems: administrative costs of alternatives to, 426-44; administrative costs of government-run, 405-26; com- parative administrative costs of world, 405-12; comparison of U.S. and prere- form Chilean, 57-60; cost models of, 422-26; incentives for participation in pri- vatized, 3 15-24; medical and unemploy- ment insurance under European, 404-5; phase-in from partial to total privatiza- tion, 232-36; phasing out public benefits in personal, 271 ; potential for efficiency gains from privatizing, 27 1-72; welfare gain from privatizing, 22-25

Social security systems, funded: argument against transition to, 216; benefits of, 2; gains from, 22-27; long-run gain with shift to, 216; payroll tax with shift to, 21 5-16; potential gain from privatized,

Social security systems, unfunded: cost im- plied by, 14-16; deadweight loss of pay- roll tax in, 3-8, 17, 216; economic ef- fects of pay-as-you-go, 3-8, 267; fiscal burden of pay-as-you-go, 269-70; payroll tax with, 215-16; redistribution in, 245, 267-70; shifting to funded system from, 16-17; welfare loss of, 20-22

Social security trust fund, United States: cur- rent law evolution, 228-29, 23 It, 232; current system with reduced benefits (2031), 232, 253; predicted exhaustion of current, 215-17.222

Social security wealth: defined, 2-3; substitu- tion hypothesis, 11-12

Spouse benefits: among current retirees in U.S. system, 347; current US. social se- curity system, 342-50 with potential changes to U.S. social security rules,

SRAs. See Salary-reduction arrangements

SS-SIM. See Social security simulation model

State Earnings-Related Pension Scheme

16-17

350-52

(SRAs)

(SS-SIM)

(SERPS), United Kingdom, 100, 102-3; as additional social security pension scheme, 127; effect on private and na- tional saving, 119-20; employee choice of, 131; history of, 106-12; macroeco- nomic effects of, 119-20; objectives and effect of, 125; rate of return on, 118-19; shift to APPs from, 129

Subsidies, Mexico, 136-37 Superannuation, Australia: compulsory,

66-77; effect on saving, 92-93; employ- ers' role under, 63-65, 67, 69-70, 83-86; move to and expansion of, 66-68; old vol- untary system of, 66, 83.91; rates of re- turn on financial assets, 72-73; superan- nuation guarantee charge (SGC) , 67, 84-87,89-93; tax rules for, 69-70,83- 85.91-92; transition from age pension to, 90-9 1 ; voluntary, 66

Superannuation funds, Australia: assets of, 7 1-77; contributors to, 65-69; develop- ment of, 71-72, 83-85; growth of, 71;

471 Subject Index

guarantee, 84-87, 89; management, in- vestments, and benefits of, 86-87,89-90; mandatory and voluntary contributions to, 63-64; proposal for choice among and within, 95; role in financial sector, 71-77; rollover options, 74.77; tax rules, 69-70, 83-85; transition to, 64-65

Supplemental security income (SSI), United States, 245

Survey of Consumer Finances (SCF), 324-25, 369-72,376

Survivor benefits: current U.S. social security system, 342-50; with potential changes to U S . social security rules, 350-52

Switzerland, 89-90

Taxation: Australian compulsory superannua- tion, 69-71, 83-84, 90-91, 94; Australian voluntary superannuation savings, 66; ef- fect of hypothetical privatization on rates of, 275-76; under former pay-as-you-go system in Argentina, 178; rates on cur- rent U.S. social security contributions, 274-75; of required and voluntary AFP contributions in Chile, 42; rules for Aus- tralian superannuation, 69-70.83-85, 9 1-92; in steady-state analysis of priva- tization, 341-43; of U.K. basic state pen- sion, 101; under voluntary and manda- tory privatization schemes, 340. See also Payroll tax

Tax Reform Act (1986), United States: rules re- lated to IRAs and 401(k)s, 366

Thrift Savings Plan (TSP), United States: ad- ministrative costs in, 439,441t; asset allo- cation in, 377-78; voluntary contribution option, 377-79

TIAA-CREF: asset allocation in, 378-83; Par- ticipant Survey (1988), 379-80; survey of annuitants (1988), 383-84

207-9; Australia, 64-65,96-97; benefit financing in AK model of privatization, 279-80; Chile, 49-52, 59, 278n14; effect on different age cohorts, 241-43; Mex- ico, 156-64; simulation of debt financing in, 296-98; simulations in multi-income model, 301-4; simulations phasing out benefits assuming marginal benefit-tax link, 298-301; simulation using consump- tion tax to finance benefits during,

Transition to privatized system: Argentina,

292-95; simulation with complete elimi- nation of benefits and taxes, 280-89; sim- ulation with tax revenue financing of ben- efits, 289-92; substitution of real saving for pay-as-you-go system, 22-27

Trust fund. See Social security trust fund, United States

TSP. See Thrift Savings Plan (TSP), United States

Unidad de fomenro (UF), Chile, 36,40t, 41n12,61

United Kingdom: choices of pension systems, 131-32; defined-benefit plans, 112-13; defined-contribution plans, 1 12; effect of reforms in pension system, 128-29; fiscal policy, 120; home responsibilities protec- tion, 101; means-tested welfare benefits, 100; National Health Service funding, 103-4; National Insurance Fund (NIF), 103-5; private pension fund investments, 100; proposed guarantee in assured pen- sion, 121-22; Reform of Social Security green paper (1985), 107-8; Reform of So- cial Securiiy: Programme for Action white paper (1983, 108-10; role of priva- tization in pension system, 124-26; State Earnings-Related Pension Scheme (SERPS), 100, 102-3, 106-12, 118-20, 125, 127, 129, 131; taxation of basic state pension, 101. See also APPs; Pen- sion system, United Kingdom

346-47, 350-52; costs of social security system, 412-16; effect of social security system, 3, lo; simulation to show gradual privatization, 228-45; supplemental secu- rity income (SSI), 245. See also Advisory Council on Social Security (1994-96), United States; Mandatory individual re- tirement accounts (MIRAs); Social secu- rity system, United States; Thrift Savings Plan (TSP), United States

United States: benefits, 217-18, 223,245,276,

Welfare: benefits in Chilean system, 61; effect of privatizing social security on, 19-22; gain from privatized social security, 22-27; U.K. means-tested benefits, 100

Welfare, economic: effect of privatizing social security, 14-16, 19-27; loss with reduced national saving, 8-10