Planning for (Everyone's) Retirement
By Stephen J. Morgan
Wharton's Olivia Mitchell is a key player
in Social Security reform.
Back in the 1970s, Olivia S. Mitchell knew as much about
investing for retirement as your average 25-year-old. Which
shouldn't be surprising since that was precisely Mitchell's age
when she joined the workforce as an assistant professor of labor
economics at Cornell University with a newly minted PhD.
"You know, it's funny. When I first started teaching at
Cornell in 1978, I had just finished my dissertation, and they
asked me to teach a course on employee benefits," she recalls.
"I knew nothing about employee benefits. In fact, we had a
defined contribution plan at Cornell, and they asked me how
I wanted to invest my money? I said, 'Gee, I don't know.
What does everybody else do?' And they said, 'Usually, 50-50
stocks and bonds.' And I said, 'That sounds like a silly idea.'
"So, I started thinking a little bit about how to invest my
pension and the role of pensions and retirement income. Then
I taught this course, and began to teach it more over time, and
I started to do some research on pensions. After that, things
just flowed."
Today, Mitchell is known around the world for her expertise
on private and public pensions, employee benefits, and
compensation, including the mammoth and troubled U.S.
Social Security system.
At Wharton, she holds a number of positions: International
Foundation of Employee Benefit Plans Professor in the
Insurance and Risk Management Department; executive
director of the Pension Research Council, the oldest research
center of its kind in the country; and senior fellow at the
Wharton Financial Institutions Center and the Leonard Davis
Institute. She also has been a consultant for the World Bank,
the Federal Reserve Board, the InterAmerican Development
Bank, IBM, KPMG Peat Marwick and other companies
and organizations. She is the co-author or editor of 11
books, most recently Innovations in Financing Retirement
(University of Pennsylvania Press, forthcoming) and The Role
of Annuity Markets in Financing Retirement (MIT Press, 2001).
Much of Mitchell's time in recent months has been taken
up by business in Washington. In the spring of 2001, she was
named by the White House to serve on the President's
Commission to Strengthen Social Security, which comprises
eight Republicans and eight Democrats. (Mitchell is a Democrat.)
The events of September. 11, 2001, pushed many
national issues, including Social Security, into the background.
But it is only a matter of time before the nation's retirement
system comes to occupy center stage.
Social Security reform is a hot-button issue if there ever was
one. More than a few newspaper and magazine writers have
called Social Security the third rail of American politics: touch
it, and you die politically. But even that charming image does
not do justice to the potential repercussions of tinkering with
something that enjoys the biggest special-interest constituency
there is — every American.
The issue is so sensitive that Mitchell, in an interview in
her office in November, would not discuss how the commission
might recommend revamping the Depression-era
program. The commission was to have completed its work
and issued a final report by the end of 2001, but Mitchell
said there was a chance the report would be delayed.
Mitchell was happy, however, to outline the parameters
of the debate and offer some insight as to what the final
report may generally suggest. She sees the commission's role
as one of "education, not legislation."
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