A dull textbook on pensions started this year's Lillywhite Award winner, Olivia Mitchell, on her career as a retirement educator, researcher and thought leader.
Ms. Mitchell on May 11 became the 24th recipient of the Employee Benefit Research Institute's Lillywhite Award, begun in 1992 to celebrate distinguished careers in the retirement and investment management fields and outstanding service that enhances Americans' economic security.
The award is named after Ray Lillywhite, a pension pioneer who helped found numerous professional organizations and educational programs, and who retired from Alliance Capital in 1992 at age 80.
Ms. Mitchell's academic roles at the University of Pennsylvania's Wharton School include professor of insurance and risk management; professor of business economics and public policy; and the International Foundation of Employee Benefit Plans Professor.
But there are an impressive 23 more positions on her current resume, including executive director of Wharton's Pension Research Council, director of its Center on Pensions & Retirement Research, and positions on numerous retirement research-related boards, in addition to a senior fellowship with EBRI.
In her first teaching post at Cornell University in 1990, the course textbook “was so dull, it put me to sleep,” she said in an interview. “I thought we can do better than that.”
She started by researching how pension plan sponsors designed plans to attract and retain workers, which led to many pension research projects.
A global focus, prompted in part by living in eight countries, also led to her serving on Chile's pension reform commission and consulting for retirement systems in Japan and Germany, among other countries. “What's fascinating is to be able to compare and contrast how different countries approach” retirement savings, she said in an interview. “Every country has its own set of cultural expectations, regulatory norms and history.”
“The big challenge now faced by all developed countries is with this very rapid population aging and low fertility rates, it's going to be impossible to retire at current ages. Retirement ages 70-plus are not that far away.”
One of the biggest surprises in her career, she said, “has been how poorly funded defined benefit systems have turned out to be, with few exceptions.”
The defined contribution system “really works much better for today's workforce,” she said.
Ms. Mitchell played a key role on a 2001 bipartisan commission on Social Security, looking at ways to restore solvency and to allow private accounts, but the report's debut was overshadowed by the events of Sept. 11.
She notes that the last time there was effective reform was 1983, three months before the Social Security trust fund ran out of cash. It is likely to take another cash crunch, now predicted by 2035, to get policymakers' attention, she said.
“Every year you wait, the cut has to be bigger,” she said.
Ms. Mitchell would like to see the federal MyRA program get more attention and participation. “To me it seems like the most brilliant way to get people to save.”
In the last 10 years, Ms. Mitchell has branched out into financial literacy, which she notes with disappointment, “there's very little of around the world.” She helped develop financial literacy questions for the Program for International Student Assessment, a worldwide study that measures 15-year-olds' capacity in basic subjects that is now included in 120 countries' tests. “I believe you really do have to start, if not in the home, in the schools,” she said.
