PENSIONS MAY NOT BE SO PUNY
The elderly may be better off than the government's numbers show. According to a new study by Watson Wyatt, a human resources consulting firm, Census Bureau surveys of income far understate the amount of pension income going to retired Americans. For example, in 1990 the Census numbers showed $77 billion in pension benefits paid to the elderly. But according to Sylvester Schieber, director of research at Watson Wyatt, the true amount of pension benefits was closer to $112 billion, based on analysis of tax data.
Why the difference? According to John Sabelhaus, an economist at the Urban Institute, the government's problem is that its figures are based on survey data, which depend on accurate responses. As pensioners get older, they may not easily be able to tell an interviewer precisely how much money they are getting or where it is coming from. One consequence of the missing $35 billion in pension income: The government's numbers say that about 12% of Americans over 65 are below the poverty line--but the true poverty rate for elders may be much lower.BY MICHAEL MANDEL