Social Secuity Reform: The Facts from the Employer's Viewpoint

Abstract

While individual Social Security savings accounts may be attractive and may have beneficial effects for the nation, "by themselves they do nothing to resolve the financial imbalance in the Social Security program. To resolve that imbalance, Congress must cut Social Security benefits, increase revenue to the program, or enact some combination of these two options," states the author. And whatever Social Security reform proposals do exist, she continues, "must be examined not only for their impact on that program but also for their impact on other sources of retirement security and on the national economy." Focusing her response on the "critical" interaction between Social Security reform and retirement income security provided through employer-sponsored retirement plans, she says, "employer-sponsored retirement plans provide the largest source of income other than Social Security for the middle three income quintiles of the elderly population-moreover, the role of these plans is expected to increase in the future. Social Security reform must be shaped in a way that permits employer-sponsored plans not only to adapt, but to flourish."