W
hile
retirement is the
responsibility
of
every
American, current research
shows the typical American is not
properly prepared to retire. However,
with modest changes to behavior the
retirement problem can move towards
a resolution. Boston College’s Center for
Retirement Research works to do just
that.
The Center for Retirement Research at
Boston College (CRR) was established in
1998, along with two other centers: the
National Bureau of Economic Research
and the Michigan Retirement Research
Center. Together, they make up the
Retirement Research Consortium (RRC),
made possible through cooperative
agreements and a grant from the Social
Security Administration.
The CRR has become a first-class
research facility under the leadership of
Alicia H. Munnell, the Peter F. Drucker
Professor of Management Sciences
at Boston College Carroll School of
Management. Currently, the CRR has a
staff of 22 full-time employees and 5 to
10 part-time student research assistants.
The college’s mission, according to their
12 | January-March 2012
website, is to forge a strong link between
the academic community and decisionmakers in the public and private sectors
around the critical importance of the
nation’s future.
Historically, the main areas of research
for the CRR are Social Security, State
and Local Pensions, Health/Long-term
Care, Financing Retirement and Older
Workers. “We define our purview very
broadly, in that even though we are
in a specific topic about retirement
income security we are really interested
in anything that could potentially affect
money and retirement. So that gets us
into studying a lot different areas, not just
what’s going on with Social Security and
what’s going on with private and public
pensions,” stated Andrew Eschtruth, the
center’s Associate Director for External
Relations.
As noted, Social Security is a particularly
important research area. “Social Security
of course is always prominent given that
it has such broad coverage of the U.S.
population and that it’s the backbone
of retirement security for pretty much
everybody, even people with upper
middle class incomes,” said Eschtruth.
According to Eschtruth, research
with older workers emerged naturally
because the researchers began to worry
the combination of Social Security and
pension funds would not be enough to
comfortably live on in retirement.
After the financial crisis of 2008, the
CRR focus is on state and local pension
plan funding. Also, the shift away
from defined benefits towards defined
contribution plans is an area of increased
focus for the researchers at the CRR.
“[The 2008 Financial Crisis] laid bare
some of the problems and challenges
of the system, in a way that was less
visible before the recession and financial
crisis,” explained Eschtruth. “It really
accelerated some of the vulnerabilities of
the system that we thought would take
longer to fully develop or fully become
visible.”
The CRR’s study of 401(k) plans noted
the ongoing shift from defined benefit
plans to defined contribution plans.
Their study measured contributions to
the plans, and projected out the number
of years until retirement, to determine if
participants could in fact have enough to
live on without sacrificing their present