9/22/99: The Changing Economics of Social Security and Retirement Plan Sponsorship is published online by Watson Wyatt. Excerpt:This article [explains] an underlying aspect of Social Security policy that many employers may not have fully grasped as they have dealt with financing their own retirement benefit plans. The basic premise is that the way Social Security has been implemented in the United States has served to spur the creation of employer-sponsored pensions. Looking to the future, however, the same dynamic may have the opposite effect, and in fact, this phenomenon may already be influencing the trend away from defined benefit plans. Basically, 50 years ago the promise of a certain level of pension looked relatively "cheap," whereas now it looks relatively "expensive." Changes in the economic and demographic forces driving Social Security funding play a big role in this shift.
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