The Actuarial Foundation

Evaluating Issues in Privatizing Social Security
Sponsor: National Academy of Social Insurance
Grant Award: $25,000

Summary:

The National Academy of Social Insurance's multi-disciplinary study to evaluate issues raised by proposals to "privatize" Social Security (either by changing the trust fund investment policy to allow investment in private stocks and bonds, or to create individual retirement savings accounts as a substitute for part of Social Security's current defined benefits) has been underway for eighteen months. The study involves professionals from economics, actuarial science, political science and law.

The National Academy of Social Insurance held its tenth annual conference in January of 1998. The conference drew over 400 attendees from Congress, the Administration, universities and think tanks, interest groups and media. The conference highlighted analysis produced to date by the study on privatization, including the researchers' work on "money's worth" comparisons, the long-term political stability of alternative approaches to Social Security, and implications of public investment in private markets.

A preview of the findings drew great attention at a hearing of the Ways and Means Social Security Sub-committees on June 18 at which both study co-chairs, Michael Boskin, Ph.D., Standford University and Peter Diamond, Ph.D. M.I.T. testified.

The Foundation provided a second grant of $25,000 in August, 1998 to print and release the study's final report. The final report is scheduled to be available after the first of the year, 1999.