(UM10-17) - Post-Retirement Adjustments in Defined Benefit Pensions
Few private defined benefit pension plans index benefits after a worker begins receiving them. Previous (now dated) research finds that most plans do, nonetheless, make “voluntary” adjustments, which compensate for roughly 40% of the price increases after retirement. This project will measure actual adjustments experienced by HRS respondents, and relate them to inflation, institutional factors suggested by past research (collective bargaining, government sector), and changes in the financial conditions of the industries providing the benefits. We will examine the implication of these findings for our understanding of the adequacy of pension benefits as individuals age and for between-group differences in pension wealth.