An American Perspective on Optimal Retirement Age Jon Forman Alfred P. Murrah Professor of Law University of Oklahoma & ATAX Fellow University of New South Wales Centre for Pensions and Superannuation Seminar University of New South Wales August 4, 2011
An American Perspective on Optimal Retirement Age. Jon Forman Alfred P. Murrah Professor of Law University of Oklahoma & ATAX Fellow University of New South Wales Centre for Pensions and Superannuation Seminar University of New South Wales August 4, 2011. Overview. - PowerPoint PPT Presentation
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Implications for Public Policy:Some Modest Reforms
• Raise the Early Retirement Age Applicable to the Penalty on Premature Withdrawals
• Raise the Normal Retirement Age• Raise the Minimum Distribution Age• Repeal the Age Discrimination Exceptions • Require that Benefits be Paid as Indexed
Annuities• Require that Pension Benefits be Paid to Part-
time Workers
A More Comprehensive Proposal
• Mandate Age Neutrality• Benefits would accrue at a constant
annual rate• Final Average Pay DB plans could not
meet an age neutrality requirement• But DC and Cash Balance plans could
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Conclusion• Tying the early and normal retirement ages to
longevity improvement would be beneficial to workers, to government, and to employers– would encourage workers to work longer and accumulate more
savings so that they have higher incomes when they eventually retire
– would help the government raise revenues and reduce its expenditures for its social welfare outlays
– would help employers stave off the labor shortages that could occur if large numbers of talented baby-boomers choose retirement over work
• Changes are clearly needed, and the sooner the better