Academy Symposium Offers Insights on Roadmap to Retirement Security

By Barbara Bryant and Janae Nelson 
Academy Public Policy Staff  

The uncertainties facing Social Security and other retirement savings vehicles were top of mind for federal policymakers, actuaries, and other retirement experts during the Academy’s second annual retirement symposium, Actuarial Perspectives and Solutions for Strengthening the US Retirement System, held Sept. 18 in Washington, D.C.  

Jason Russell, vice president of the Academy’s Retirement Practice Council (RPC), kicked off the event with a reminder that two significant pieces of retirement legislation had significant anniversaries to mark, with Social Security celebrating its 90^th anniversary in August and Employee Retirement Income Security Act, the federal law that sets minimum standards for private industry employee health and retirement plans, turning 50 last year. While both laws frame a lot of what we talk about when we discuss retirement, there is a recognition that retirement security in the U.S. faces several major hurdles.  

Following Russell’s opening remarks, attendees welcomed U.S. Comptroller General Gene Dodaro, who is retiring from the Government Accountability Office (GAO) after more than 50 years of service. In his keynote address, Dodaro acknowledged the many Academy volunteers who have collaborated with and participated in a variety of GAO studies and efforts over the years, including former Academy Senior Pension Fellow, Frank Todisco, who has been serving as the GAO’s chief actuary for nearly 15 years.  

Turning to the theme of the afternoon, Dodaro expressed his long-standing concern that, without strong intervention, both the Social Security and Medicare Hospital Insurance trust funds’ dwindling reserves will be depleted in 2033, forcing a cut in Social Security  benefits of approximately 23% and an 11% cut in Medicare Hospital Insurance trust Fund benefits. Considering potential solutions to this problem, he previously called for a congressionally mandated committee to address the shortfall, as well as with the federal deficit. 

He highlighted factors that could affect Social Security’s bottom line, including the steep drop in fertility rates and the potential of reduced immigration, which could decrease projected labor force growth and tax payments that fund these programs even as the need for them grows. This echoes some of the recent work that the Academy’s Social Security Committee has published, including the 2024 issue paper, Immigration and Social Security.  

The symposium then flowed into three panel presentations, led by RPC volunteers and including key external stakeholders.  

The first panel focused specifically on Social Security, featuring Social Security Committee Chairperson Sam Gutterman, along with Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities, and Charles Blahous, J. Fish and Lillian F. Smith chair and Senior Research Strategist at the Mercatus Center at George Mason University and a former public Social Security trustee. 

The panelists agreed that, given the substantial increases in health and longevity in the U.S. retiree population, it makes sense to raise the ages for Social Security benefits eligibility. They also agreed that some benefit formulas need to be re-examined to reflect changes in parenting and other family trends. Another potential way to cut costs and reduce the gap between current retirees’ and future retirees’ benefits would be to reduce cost of living adjustment rates. The panelists agreed that the increasing inequity between current and future benefit levels needs to be addressed and that higher income people will have to pay more (?) into the Social Security system to ensure its solvency.   

The second panel was moderated by Pension Committee member Tonya Manning who spoke with Ali Khawar, Employee Benefits Security Administration’s former Principal Deputy Assistant Secretary, Michael Sinacore, Senate HELP Committee Pensions Policy Director, and vice chairperson of the Retirement Policy and Design Evaluation Committee (RPADE), Connie Rydberg. The group focused on the role of individuals in creating a secure retirement nest egg. The panelists lauded the SECURE Act legislation’s auto-enrollment and auto-escalation features to increase participation and savings rates. Participants noted that several states have set up employer-funded benefit account structures that independent contractors can tap to buy health and savings benefits and 12 states have automatic Individual Retirement Account enrollment options. 

Following that conversation, the third panel focused on the role of employers in ensuring Americans can have a secure retirement. Led by Grace Lattyak, chairperson of the Pension Committee, and including Bruce Cadenhead, the incoming RPC Vice President, Lee Gold, RPADE chairperson, and Spencer Look, vice chairperson of the Defined Contribution Subcommittee, had a spirited discussion of hybrid plans that include a lifetime income feature. While they noted that employers may be reluctant to act as first adopters of such plans, given the fact that there’s no way to benchmark the performance and the potential challenge of existing regulations and accounting rules, efforts are underway to remove some of these hurdles. 

To close out the symposium, the Academy’s Senior Retirement Fellow, Linda K. Stone, led a conversation with three congressional committee staff members—the Senate Committee on Finance’s senior policy advisor, Sam Conchuratt, Senate HELP’s pensions and tax policy director, Richard Phillips, and pensions policy director, Michael Sinacore. The group, representing both sides of the political spectrum, talked about legislation seeking to shore up Social Security’s financial standing, the Claiming Age Clarity Act, which could increase the current Social Security eligibility ages, and the Social Security Expansion Act, which would increase benefits for all enrollees, apply Social Security payroll taxes to unearned as well as earned income payroll tax to income and investments, and boost benefits for low-income workers, which would increase benefits for all enrollees, apply Social Security payroll taxes to unearned as well as earned income payroll tax to income and investments, and boost benefits for low-income workers. 

The panel also touched upon the effects reduced immigration could have on Social Security payroll tax contributions and the need for reforms to Pension Benefit Guaranty Corporation requirements that discourage employers from offering defined benefit plans, along with the potential of leveraging Employer Stock Ownership Plans, a tax-qualified retirement plan that invests primarily in employer stock, as a retirement savings vehicle/incentive. Russell closed the symposium by noting that this is merely one opportunity to discuss potential solutions to the challenge of retirement security. He reminded the audience that, as we think about the future of retirement, we should not lose track of other influencing factors, including the high cost of health care and long-term care, longevity, and the impact of extreme events and the rising costs of home ownership, as a home is many retirees’ largest asset.  

If you missed the symposium or are simply looking for more information on the future of retirement, be sure to listen to the upcoming podcast on the event, which will be released later in October. For additional reading materials or information on upcoming webinars, visit the RPC’s page on the Academy’s website and the symposium resource page. resource page.