Pensions and Retiree Health Benefits in Household Wealth: Changes from 1969 to 1992

40 Pages Posted: 10 Feb 2000 Last revised: 13 Oct 2010

See all articles by Alan L. Gustman

Alan L. Gustman

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

Thomas L. Steinmeier

Texas Tech University - Department of Economics and Geography

Date Written: August 1999

Abstract

By 1992, pensions and retiree health insurance represented one quarter of the wealth of families on the verge of retirement. Our simulations suggest that between 1969 and 1992, abstracting from the effects of changes in wages and years of covered work on pension benefit amounts, changing pension coverage and changing pension plan provisions would have raised the total wealth of each household in the Health and Retirement Study by $67,000 in 1992 dollars, raising wealth from employer provided pension benefits per household by 150 percent in real terms. Changes in retiree health benefits, which have only about 7 percent of the value of pensions, experienced similar real growth, increasing in value by $3,700 in 1992 dollars. Most of the increase in pension values and in the value of retiree health insurance plans was due to improvements in real benefits among covered workers. All classes of wealth holders enjoyed increased wealth from employer provided retirement plans, but those in the top half of the wealth distribution enjoyed increases that were much larger in absolute terms and also were larger in relation to their total wealth than were the increases experienced by those in the bottom half of the wealth distribution.

Suggested Citation

Gustman, Alan L. and Steinmeier, Thomas L., Pensions and Retiree Health Benefits in Household Wealth: Changes from 1969 to 1992 (August 1999). NBER Working Paper No. w7320, Available at SSRN: https://ssrn.com/abstract=197129

Alan L. Gustman (Contact Author)

Dartmouth College - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Thomas L. Steinmeier

Texas Tech University - Department of Economics and Geography ( email )

Lubbock, TX 79409-2101
United States
806-742-2201 (Phone)

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