Archive: Peter A. Diamond
The brief’s key findings are: The economic crisis has provided a ‘stress test’ for many pension systems. In Sweden, the crisis triggered an automatic ‘brake’ to restore financial balance and revealed two problems with the brake’s design: it can favor workers over retirees; and it can result in large shocks for retirees. In response, t…
The brief’s key findings are: Defined benefit plans based on final pay: “backload” benefits, so younger shorter-service employees get virtually nothing; favor those with high earnings growth, who tend to be higher paid; and invite sudden late-career “spikes” in earnings. Moving to career-average earnings would: provide reasonable benefits for younger shorter-service employees; treat high- and…