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The Actuary The magazine of the Institute & Faculty of Actuaries

Actuaries and politics – US Social Security

Actuaries and the actuarial profession seemed likely to become increasingly embroiled in political battles as President George W Bush made changes to the public social security programme the centrepiece of his domestic political agenda. Many Americans, and especially Democrats, regard social security as a crowning achievement and legacy from the Roosevelt administration of the 1930s. Not for nothing is social security regarded as the ‘live rail’ of US politics, with any president who touches it risking getting hurt.

The president’s plan has some echoes for UK readers, in that it involves substituting ‘personal accounts’ for part of social security benefits. Arguably this mixes up the real need to make changes to compensate for increasing longevity with an optimistic view of the long-term returns from investment in real assets.

Your news editor has observed a 50% increase in references to actuaries in the global press arising out of this single issue, which mostly reflects partisan commentary in US newspapers. It does seem likely that in this particular war of words, an early casualty will be actuarial truth!

(We welcome opinions from readers anywhere in the world on this significant ‘actuarial’ controversy!)