Professor among 25 speakers at Society of Actuaries' "Retirement 2000" Conference
SCHAUMBURG, Ill., Jan. 27, 2000 A study to be released at an upcoming conference says that even as the baby boomers retire, a larger-than-projected labor force can be maintained and productivity can be increased to produce enough goods and services for society. Professor Robert L. Brown, using Canada as an example and noting similarities to U.S. conditions, says this can occur if people do not continue to retire at ever-earlier ages. Also, in a stable economy, this will not require dramatic legislation, he says. However, what is needed is worker education and capital investment.
Dr. Brown, a professor in the Department of Statistics and Actuarial Science, University of Waterloo, will report on his research at Retirement 2000, a conference sponsored by the Society of Actuaries, Feb. 23-24, Washington, D.C. He is 1999-2000 president-elect of the Society of Actuaries and a Fellow of the Society. Dr. Brown will join other leading researchers in reporting fresh insights into problems many fear will overwhelm national economic resources, individuals' resources or both. The multi-disciplinary conference will feature 20 papers by 25 economists, professors, institute directors, private consultants and academic researchers on a wide range of topics. These include issues related to disability, annuities, elderly women, family support of the aged, defined benefit vs. defined contribution plans, public vs. private plans, and Mexican retirement questions.
Some economic observers predict financial disasters, both national and personal, when the baby boomers retire. They say that as nations of workers and investors become nations of retired consumers, withdrawals will far outweigh deposits in investment and savings vehicles, market values and retirees' assets will drop, and prices will rise as labor becomes scarce and wages soar. However, Dr. Brown's study of retirement issues leads him to believe otherwise. "A few 'chicken-littles' are trying to create an image of crisis," he says. "While there are some strong evolutionary forces at work, they are manageable."
In his Retirement 2000 paper, "Impacts on Economic Security Programs of Rapidly Shifting Demographics," Brown notes that in the United States, the trend toward earlier retirement has reversed itself, and this is likely to happen in Canada and other nations. Brown says this indicates that keeping workers in the labor force longer and raising productivity is a highly plausible solution to a much-feared problem. As the baby boomers retire, "What happens to social security, employer-sponsored pension assets and individual savings when everyone wants to liquidate and consume but not produce?" One possibility is "the price of consumables would rise and the value of assets being liquidated would fall," implying that retirees might not do as well as they now anticipate.
That need not happen according to Dr. Brown's current and earlier research. A 1997 study by Dr. Brown and Claire Bilodeau, Ph.D., professor, Laval University, showed that in Canada, even without an increase in productivity, workers would need "to stay active between four and six extra years. That is all." If productivity increased at a 0.9 percent annual rate, the 1976-98 yearly Canadian rate, and wealth transfer was kept at a constant level, the median retirement age actually could decrease until 2017, reaching 60.3 years, then rise through 2034 to a maximum of 60.9 years. "Because of similar demographics, U.S. trends would mirror these indications," Dr. Brown says. Dr. Brown insists these aren't "goals that can be achieved if correct public policy is legislated * but rather events that are inevitable in a stable economy." However, a high productivity rate will demand "proper education" for workers and "sufficient capital investment per worker."
RETIREMENT 2000 CONFERENCE
The multi-disciplinary Retirement 2000 conference will be held Feb. 23-24 at the Washington Court on Capital Hill, Washington, D.C. Its goal is to broadly define policy issues in light of changing demographics and retirement needs.
(NEW) Papers will be presented in five categories: Background; The Payout Phase, when benefits are distributed; The Border Period, deciding how and when to retire; Once the Dollars are Saved (investment and administration issues); and Getting Dollars Saved (incentives for creating pension and savings plans and for plan participation).
Opening the session will be Anna M. Rappaport, pension consultant and principal with William M. Mercer Incorporated and 1997-98 Society of Actuaries president. Retirement 2000 is a joint effort sponsored by the Society of Actuaries, American Academy of Actuaries, Asociacion Mexicana de Actuarios Consultores, A.C., Conference of Consulting Actuaries, and the International Foundation of Employee Benefit Plans.
Cooperating organizations are the American Society of Pension Actuaries, Employee Benefit Research Institute, Health Care Financing Administration, International Society of Certified Employee Benefit Specialists, National Academy on an Aging Society, National Academy of Social Insurance, Pension Benefit Guaranty Corporation, and Pension Research Council. Details and registration information are available on the Society of Actuaries' Web site and from the Society's Continuing Education Department, 475 N. Martingale Road, Schaumburg, IL 60173 (phone: 847-706-3500; fax: 847-706-3599; e-mail: sberg@soa.org and aweymouth@soa.org ).
EDITOR'S NOTES: Dr. Brown's results, as reported in this news release, may be published now. His paper is embargoed for release on Feb. 23. For a copy, contact Linda Heacox, manager of marketing communications, Society of Actuaries, 847-706-3528, lheacox@soa.org, or Jeff Speicher, assistant director for media relations, American Academy of Actuaries, 202-785-7870, speicher@actuary.org. To register for the conference or request interviews, journalists should contact Heacox or Speicher as shown above.