America's retirement system is under pressure from a number of sources, including the recent financial crisis, strained government budgets, and the impending retirement of millions of baby boomers. The Atlanta Fed explored these issues and more during a recent Public Affairs Forum featuring Roger Ferguson, president and CEO of TIAA-CREF.
All three components of our retirement system are under stress, said Ferguson, whose company manages roughly $460 billion in assets for mostly teachers and academics. Employer-sponsored retirement plans, personal savings, and Social Security—often described as the "three legs" of the retirement system—are on shaky ground.
Ferguson also addressed the current squeeze on public sector pensions, many of which are significantly underfunded. Taxpayers, in turn, have to determine how much of the burden they are willing to carry. Fixing the system relies on both taxpayers and public sectors understanding each other's point of view, he said, "and with that general understanding, we move forward to reform the public system in a way that's fair to everybody."