Nevin's Data "Points"

Twenty years ago, I authored [i] a cover story about the then-newly enacted Pension Protection Act of 2006 with an ambitious headline: “The Pension Protection Act: This Changes Everything.”   Twenty years later, it seems like a reasonable time to ask: Did It? The short answer, I think, is yes — though probably not quite in the ways we expected in 2006. The PPA was a sweeping piece of bipartisan legislation, addressing among other things defined benefit funding, pension accounting, and cash balance plans — it was titled the PENSION Protection Act, after all.  And it was, for the benefits promised by those plans, an important defensive measure. [ii]    However, to my eyes then — and now — the most lasting influence of the PPA was on the defined contribution side, where it helped change not just plan design, but the industry's thinking about participant behavior. To Appreciate 2006, Go Back to 1986 Twenty years earlier, the Tax Reform Act of 1986 had significantly tigh...

   Every few years, somebody declares that Social Security is a Ponzi scheme. Indeed, I’ve been known to draw that inelegant comparison myself. The “scheme” that gave rise to the label was crafted by Charles Ponzi in the 1920s. He promised investors outsized returns — famously, doubling their money in 90 days. There actually was an arbitrage opportunity behind the pitch, [i] but demand quickly overwhelmed it. So Ponzi wound up using money from new investors to produce the “returns” promised to earlier ones. Social Security operates somewhat similarly: current payroll tax contributions are largely used to pay current beneficiaries. For decades, revenues exceeded benefit payments, with the surplus accumulating in the Social Security trust funds. But demographics, benefits and eligibility have changed — and the cushion between what comes in and what goes out has steadily eroded. Under current projections, within the next decade there won’t be enough incoming revenue and accumula...

I n a calendar already chock full of special days and commemorative months, next week we’ll add another: Women’s Retirement Security Day. If this one has snuck up on you — well, it’s a first. July 14 this year, the second Tuesday in July thereafter. A national day of action dedicated to raising awareness, sharing resources, and improving retirement outcomes for women. And that’s the key — not a day of remembrance, a day for action. For much of this country’s history, women were largely expected to derive retirement security through someone else’s employment — a husband’s pension, survivor benefits, or eventually Social Security spousal benefits. The retirement system itself was largely designed around a traditional, uninterrupted male career model: one worker, one employer, one pension, one primary breadwinner. But many women’s lives — including my mother’s — never really fit that model. ad space Mom, a schoolteacher, had a career of her own, but took a fairly significant (and unpaid) ...

This is the time of year when you hear a lot of talk about the “unalienable” rights of “life, liberty, and the pursuit of happiness.” And while they weren’t written with retirement plans in mind — to my ears they may describe the aspirations behind retirement better than almost anything else in American public policy.  “Life” is, of course, central to retirement planning. It defines not only the time we have to prepare financially, physically, and emotionally for retirement — but also the length of time those preparations must sustain us. ad space Granted, retirement is a relatively new and for many an as yet unexplored reality. But it’s easy to take for granted that millions of older Americans today live with a degree of financial security that previous generations often lacked. Before pensions, Social Security, and defined contribution plans, growing old frequently meant dependency — on family, charity, or continued labor.  “Liberty” may be even more directly connected to re...

  For years now, I’ve been saying that the only thing wrong with the 401(k) system is that there aren’t enough of them. And to be fair, the past several years have largely validated that view. Indeed, Vanguard’s latest How America Saves report paints what is, on the surface anyway, a remarkably encouraging picture. Participation rates among eligible workers are near record highs. Contribution rates rose — 45% of participants increased their savings rate in 2025, contributing to an average savings rate of 12.1%, an all-time high. Professionally managed investments dominate participant portfolios. Most investors ignored market volatility entirely — and, doubtless as a result of all that — account balances reached new highs. Yes, after decades spent worrying about employees failing to enroll, hunkering down in stable value funds, or panic-trading during downturns, the modern defined contribution system increasingly appears to be functioning as designed — or, as Vanguard labels it — a...