Wednesday, January 18th
Noon – 1:00 p.m.
Location: Cato Institute
Washington, D.C. 20005
Nadia Karamcheva is an economist at the Congressional Budget Office (CBO) in Washington DC. Prior to joining CBO, she worked as a research associate at the Urban Institute. Her research interests span a broad range of topics in labor economics and applied econometrics, with emphasis on retirement and the economics of aging. Her current work explores policy relevant topics related to Social Security, private pension plans, and labor force participation and savings behavior of older adults.
She has a Ph.D. in Economics from Boston College, an M.A. in Economics from the same university and a B.A. in Economics and Business Administration from the American University in Bulgaria.
Timothy W. Martin has an article in The Wall Street Journal where he writes about how the early backers of 401(k) plans regret their support of this type of retirement plan. Martin writes:
Many early backers of the 401(k) now say they have regrets about how their creation turned out despite its emergence as the dominant way most Americans save. Some say it wasn’t designed to be a primary retirement tool and acknowledge they used forecasts that were too optimistic to sell the plan in its early days. Others say the proliferation of 401(k) plans has exposed workers to big drops in the stock market and high fees from Wall Street money managers while making it easier for companies to shed guaranteed retiree payouts.
“The great lie is that the 401(k) was capable of replacing the old system of pensions,” says former American Society of Pension Actuaries head Gerald Facciani, who helped turn back a 1986 Reagan administration push to kill the 401(k). “It was oversold.” Misgivings about 401(k) plans are part of a larger debate over how best to boost the savings of all Americans. Some early 401(k) backers are now calling for changes that either force employees to save more or require companies to funnel additional money into their workers’ retirement plans. Current regulations provide incentives to set up voluntary plans but don’t require employees or companies to take any specific action.