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Cohort Changes in Social Security Benefits and Pension Wealth

82 Pages Posted: 13 Jan 2017  

Chichun Fang

University of Michigan at Ann Arbor

Charles Brown

University of Michigan; National Bureau of Economic Research (NBER)

David Weir

University of Michigan at Ann Arbor - Institute for Social Research (ISR)

Date Written: September 2016

Abstract

We utilize three sets of data resources — the Health and Retirement Study (HRS), linked Social Security earnings records of the HRS respondents, and publicly available pension plan descriptions — to study pension wealth accumulations among the recent HRS cohorts. We document the trends in pension wealth over time and across cohorts during a period in which the economic consequences of the Great Recession were significant. However, given that pension wealth of many respondents were imputed in earlier waves due to the lack of information about pension plan provisions, there is the question of how much of the changes in pension wealth should be attributed to errors in imputation. The recently available pension plan descriptions from private employers’ Form 5500 filings and public employers’ websites, which improve the respondent-plan linkage over what was available in previous waves, allow us to examine this exact question. In particular, we show that the newly available sets of information not only reduce the need for imputation, but also enable us to identify the plans not reported by HRS respondents in the survey and the retirement wealth associated with these plans. Finally, we also test the validity of the earnings projection methods used to produce Social Security and pension wealth estimates in the HRS, and we end our report with a discussion over the pros and cons among the projection methods.

Keywords: Health and Retirement Study, Social Security, pension plan, retirement wealth, projection methods

Suggested Citation

Fang, Chichun and Brown, Charles and Weir, David, Cohort Changes in Social Security Benefits and Pension Wealth (September 2016). Michigan Retirement Research Center Research Paper No. 2016-350. Available at SSRN: https://ssrn.com/abstract=2898212 or http://dx.doi.org/10.2139/ssrn.2898212

Chichun Fang (Contact Author)

University of Michigan at Ann Arbor ( email )

426 Thompson Street
Ann Arbor, MI 48104
United States

Charles C. Brown

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Michigan ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

David Weir

University of Michigan at Ann Arbor - Institute for Social Research (ISR) ( email )

Ann Arbor, MI 48106-1248
United States

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