Thomas R. Saving, TIAA-CREF Institute Fellow and Ph.D., Director of the Private Enterprise Research Center at Texas A&M University
September 2004 |
The 2004 Social Security Trustees Report continues to show that the current system is unsustainable. The looming retirement of the baby boom generation, increasing longevity and falling fertility combine to make the current tax rate too low for long-run solvency. The current reform debate centers around replacement of at least some part of the current pay-as-you-go system with defined contributions to either individual private accounts or to a centrally managed account. Either scenario will impact the university community, providing pressure to increase private contributions to retirement accounts.