ERIC Number: ED279859
Record Type: RIE
Publication Date: 1986-Dec
Reference Count: 0
Retirement Forecasting. Evaluation of Models Shows Need for Information on Forecast Accuracy. Volume I. Report to the Chairman, Subcommittee on Social Security and Income Maintenance Programs, Committee on Finance, United States Senate.
General Accounting Office, Washington, DC.
The Government Accounting Office (GAO) reviewed 71 actuarial, behavioral, and economic models that are used for retirement forecasting, focusing on models of federal retirement program costs, civilian retirement decisions, and retirement income. GAO wished to determine to what extent the models have been documented, to what extent the models are updated and revised, and their forecasting accuracy. Of the 71 models GAO reviewed, 32 were program cost models, 35 were retirement decision models, and 4 were retirement income models. GAO found that documented models do exist for all three retirement outcomes and that considerable effort has been made in their development and maintenance. However, model forecasts are vulnerable in several areas, including the adequacy of model documentation, the frequency or recency of model maintenance, the existence of evaluative information on model validity, and the quality of model data. With regard to documentation, GAO found that while models in all three categories have been documented, the amount, completeness, and content of the documentation varies. With regard to model maintenance or updating, this occurs regularly for program cost models, infrequently for retirement decision models, and periodically for retirement income models. Therefore, for some models, projections are based on antiquated data. With regard to validity (forecasting accuracy), GAO found that there is a serious lack of published information for most models and little evidence that serious attempts at validation are being made. The GAO concluded that Congress may wish to provide additional guidance to federal agencies responsible for the development and maintenance of retirement forecasting models. (KC)
Descriptors: Data Interpretation, Decision Making, Income, Mathematical Models, Older Adults, Predictive Validity, Program Costs, Research Methodology, Research Problems, Retirement
U.S. General Accounting Office, P.O. Box 6015, Gaithersburg, MD 20877 (First five copies free; additional copies--$2.00; 100 or more--25% discount).
Publication Type: Reports - Evaluative
Education Level: N/A
Authoring Institution: General Accounting Office, Washington, DC.