Transcript
MR. WILLIAM GALE: The way that I start to think about the pension system is to note that the onset of a lengthy retirement period is a relatively new phenomenon. A hundred years ago we would not have worried so much about providing for needs in retirement for the simple reason that not many people had lengthy retirement periods and those that did basically lived with the rest of their families and were supported by their families.
So it's actually a major social and economic achievement to have established a lengthy retirement period at the end of a working life. So in a sense pensions are sort of a good problem to have but they are still a problem and they raise a number of issues that need to be addressed.
That general issue combines with the aging of the population, the lengthening life span, and the imminent retirement of the baby boomers to give an urgency to all of these issues, especially when combined with observed low saving rates in the United States.
So thinking of pensions in the context of retirement income, people basically have four sources of income. Actually now that I think of this they have five sources. I'll mention the fifth in a second.
The most obvious is Social Security. Social Security provides a nearly universal and sort of a basic benefit. It was never meant to provide for all retirement needs and it certainly doesn't do that.
Panel 1 transcript(PDF—148KB)
Panel 2 transcript(PDF—162KB)