The Public Policy
Social Security by Choice
Three Texas counties have a model for reform that proves personal retirement accounts are more than just a conservative pipe dream.
Stock market volatility remains one of the primary objections to switching from the current pay-as-you-go method of funding Social Security benefits to a system of prefunded personal retirement accounts. However, three Texas counties that opted out of Social Security 30 years ago have solved the risk problem.
Galveston County opted out of Social Security in 1981, and Matagorda and Brazoria counties followed suit in 1982. County employees have since seen their retirement savings grow every year, including during the recent recession. Today, county workers retire with more money, and have better supplemental benefits in case of disability or early death. Moreover, the counties face no long-term unfunded pension liabilities.
If state and local governments — and Congress — are really looking for a path to long-term sustainable entitlement reform, they might consider what is known as the “Alternate Plan.”
A Different Model
The Alternate Plan does not follow either of the traditional
defined-benefit or defined-contribution models. Rather, employee
and employer retirement contributions are pooled and actively
managed by a financial planner — in this case, First Financial
Benefits, Inc., of Houston, which originated the plan and has
managed it since inception.
Like Social Security, employees contribute 6.2 percent of their incomes, which the counties match. (Galveston has chosen to provide a slightly larger share.) Once the county makes its contribution, its financial obligation is finished. As a result, there are no long-term unfunded liabilities.
Guaranteed Interest
Unlike a traditional IRA or 401(k) plan, which account holders can
actively manage, the contributions are pooled, like deposits to a
bank savings account, and top-rated financial institutions bid on
the money.
Those institutions guarantee a base interest rate — usually about 3.75 percent — which can increase if the market does well. Over the last decade, the accounts have earned between 3.75 percent and 5.75 percent every year, with an average of around 5 percent. The 1990s often saw even higher interest rates, 6.5 percent to 7 percent. Thus, when the market goes up, employees make more; but when the market goes down, employees still make something. This virtually eliminates the risk that a major drop in the market will cause workers to delay retirement.
Death and Disability
Social Security is not just a retirement fund, but a social
insurance program that provides death, disability and survivors
benefits. When financial planner Rick Gornto devised the Alternate
Plan for Galveston County, he wanted it to be a complete substitute
for Social Security. Thus, part of the employer contribution
provides each worker a term life insurance policy, which pays four
times the employee’s salary, tax free, up to a maximum of $215,000.
That’s nearly 850 times Social Security’s death benefit of
$255.
If a worker participating in Social Security dies before retirement, he loses his contributions (though part of that money might go to surviving minor children or a spouse who never worked). A worker in the Alternate Plan owns his account, so the entire account belongs to his estate. There is also a disability benefit that pays immediately upon injury. Social Security’s comparable benefit comes with a six-month wait, and includes other restrictions.
More Retirement Income
Alternate Plan retirees do much better than those who retire under
Social Security. According to First Financial’s calculations, based
on 40 years of contributions (see the figure):
• A lower-middle income worker making about $26,000 at retirement would get about $1,007 a month under Social Security, but $1,826 under the Alternate Plan.
• A middle-income worker making $51,200 would get about $1,540 monthly from Social Security, but $3,600 from the Alternate Plan.
• And a high-income worker who maxed out on his Social Security contribution every year would receive about $2,500 a month from Social Security compared to $5,000 to $6,000 a month from the Alternate Plan.
It is evident that higher-income workers fare better, relative to lower-income workers. The reason is that Social Security’s payout formula drops benefits for higher-income workers so that benefits for lower-income workers can be raised. The Alternate Plan makes no such transfer payments. Even so, lower-income workers still do significantly better than they do under Social Security’s social insurance model.
About the Author
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas.
Letter to the Editor View all comments (42) | Leave a comment
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Darin| 3.15.12 @ 7:58AM
Looks like something all counties should investigate. However, consider local and state laws which may differ from those in Texas and make this unworkable.
Mike 3/505| 3.15.12 @ 7:59AM
Has zero chance of being adopted. As much sense as this makes, the Federal Government will never willingly give up this large of a revenue stream.
RJ| 3.15.12 @ 9:50AM
Very true. Proposing good policy is not nearly as difficult as overcoming the political interests that support bad policy.
Tommy Frisco| 3.15.12 @ 8:33AM
Mr, Matthews,
Since Newt is the only remaining GOP candidate recommending that we all go to the Galveston model, I'm surprised the editors here at AS would allow you to publish this article on their site while he is still a candidate.
Does anyone think that a moderate, north-eastern, blue-state RINO will push for such a bold solution?
Don| 3.15.12 @ 9:03AM
What about healthcare insurance??
One if by land...| 3.15.12 @ 12:49PM
Buy it yourself, with your wages!
Al Adab| 3.15.12 @ 4:48PM
The whole point is that it puts the individual in control of his money; to be used as he sees fit. To pay off a mortgage, to provide income, to pay medical expenses (maybe a deductable), whatever the choice may be. No individual has any claim against the wealth of others nor against society for support. Yes, there are exceptions, but they are few, rare and anecdotal.
Such a plan increases the capitalization of the national economy immenesly while providing for the person much better than the current dependancy (meaning your money is hostage to government action) system does.
thoams burke| 3.17.12 @ 11:24PM
al adab.... when are you declaring your run for the GOP .. i would like to donate 5$ .. your comment is brilliant.
Jordan| 3.15.12 @ 9:30AM
I've heard about the Galveston Model before but how long would the transition period take and what would it look like?
Al Adab| 3.15.12 @ 4:52PM
There would of course be a transition period as those above a certain age today (the actuaries know it) would retain their claim to SS, perhaps as a decreasing percentage, over say the next generation. Those above the age could expect SS payments while those below, biginning their working life, would hold personally directed investments.
The interesting result is that the dollar amounts available at age 65 or so would approximate a million. Imagine a nation of millionaires. To be satirical, a nation of 1%ers.
Petronius| 3.15.12 @ 9:51AM
Sounds like Texans followed the advice of Peter Brimelow in his Charticle of the July '85 issue of Forbes. Now if only the rest of the country had read that piece and understood it, the country wouldn't be broke, and the liberals wouldn't have won the presidency to this day. But the FDR babies, the so called greatest generation nixed that. We are in this shape for one reason; economic illiteracy among the masses. They want the sand box because it's what they understand. Real life is an arena. And too many people refuse to compete.
JimH| 3.15.12 @ 10:17AM
An interesting idea. It does require that you trust the integrity and competence of whoever picks the fund manager. You could wind up with a Bernie Madoff.
Conservative Bob| 3.15.12 @ 10:38AM
Considering that we have Obama and all of congress Bernie Madoff would be a substantial improvement.
Jon| 3.15.12 @ 11:01AM
JimH, you're right...Conservative Bob, you're EXTRA right!
Stormy| 3.15.12 @ 10:36AM
A good plan that never will get a chance to be implemented. It lacks one critical element. It doe snot provide Congress a slush fund to allow their pet projects.
fmm| 3.15.12 @ 3:49PM
You are sooooo right. Bush tried to push for partial privatization of SS and uncovered a hornets nest lead by the blaggard Kennedy.
The Bruce| 3.15.12 @ 11:42AM
Congress will never give up its sacred cow, even when (not if) it takes the country over the cliff.
Clint| 3.15.12 @ 11:46AM
Dr.Ron Paul,
" I introduced legislation to end this terrible practice. Under my bill, HR 219, your Social Security contributions are set aside in an interest-bearing account and cannot be spent. In other words, your Social Security account would be treated as YOUR account and not a slush fund for Congress. This is the simplest approach to Social Security reform, and it has the added benefit of making it harder for Congress and the administration to mask the deficit spending that is the real cause of our problems."
Fiscal| 3.15.12 @ 1:10PM
If we had to start from scratch, this type of plan would be far better than today's Social Security. However, just like companies that go bankrupt and lose pensions, these financial bundlers could do the same and you would have no recourse.
Secondarily, much of the gains over the past 50 years have been as a result of rising housing prices that never declined and of businesses that didn't have the global competition we see today. It is unlikely that these types of plans starting today would guarantee interest rates in the 3-4% range -- more in the less than 1% interest range similar to the internet banks. Thus the historical numbers you use are not relevant today. We could go into how these financial bundlers make this program work and you would see why the gains of the past would be impossible today.
Furthermore, current Social Security is financed by payments by younger employees since there in no trust fund supporting current payments. Therefore, you can't just stop current Social Security and start this program because then there wouldn't be enough money to pay current seniors. Any transition would require that current Social Security liabilities are funded. That would mean SIGNIFICANT TAX INCREASES for people who work. The author fails to do the math. (I find that most people who submit these types of politically driven articles either don't do the math or are incapable of doing so.)
So here is the political problem.... If you promise a change to private plans (which are better if you can start with no liabilities), then you must raise taxes in the interim to finance the unfunded liabilities. Now, if you've signed a pledge not to raise taxes, then it would be impossible to support a conversion to private plans without taking Social Security away from current seniors. Therefore, Republicans won't do it because of their tax pledge and Democrats won't do it because they like big government solutions. Those who propose it know it could never pass, but they use the argument to fool the masses who don't know any better.
wolflen| 3.15.12 @ 2:23PM
hopefully your not saying.."do nothing" its broke and cant be fixed so don't even try...
i (and millions of others) would be a millionaire if i didn't pay income tax..that does not stop me from saving..and yes if my SS was funded by a private plan...i would be getting over 3k a month in bennies...its simple math..not rocket science..
you are correct regarding present SS liabilities..that they would have to be paid in full before another plan could be in place in order for it to work .. but considering how the Feds "borrow" ( i prefer burrow..as we are going to bury ourselves in debt) there could be a way to credit the liability..though not pleasant one...
Fiscal| 3.15.12 @ 2:53PM
Actually, what I'm saying is that you would NOT be getting over 3K a month IF you started a plan now because of the status of housing and of global competition. If you started the plan 30 years ago, then that would have been possible. But you can't go back in real life....
That said, I personally think we have to take Social Security private. According to my rough calculations, if we had a timetable of 20 years and were willing to RAISE Social Security taxes by only 10-15% while putting in means testing and raising the limit to about $200k, then we could change plans. However, with the state of the Republican party today, no one who has made a pledge NOT to raise taxes could agree and thus, I just don't see a way to make this happen mathematically. You can't do it with just means testing and raising the limit. Politicians don't do the math on purpose.
For example, we keep hearing that the Republican candidates could lower gas prices. Anyone who has studied economics knows that a statement like that is ridiculous. Gas prices are set on the spot market. Even with high end estimates, we have only about 4% of world reserves. Since the primary factor in setting prices is the stability of oil producing countries, given the Republican predilection of bombing Iran, it would be more likely that a Republican President would cause an INCREASE in crude prices. Remember that most of the reserves in the U.S. are NOT light sweet crude and thus cost much more to refine. In addition, the Republican candidates don't want you to know that we are getting more oil from the ground in the U.S. than at any time in history. Man, do I hate politics.
So the point is that if we want a plan that works, we need a President that is willing to tell people the truth about how the math works and I don't see any President, Republican or Democrat, willing to do that.
Carnival Barker | 3.15.12 @ 3:43PM
Your comments about being able to lower gas prices are completely false. The whole market is rigged by the government to keep prices as high as possible. Just allowing all nine regions of the country to use the same blend would drop the price about $1 right now.
In fact, the country has been conned by the corn industy to introduce ethanol in each gallon of fuel. Although the cost appears competitive it's actually not. Ethanol is at least 15% less efficient than gas, and some estimates are 40% less efficient.
Ethanol also is hard on cylinders leading to many early engine failures. The corn mafia controls the Congress and with the massive amounts of money coming their way threaten to buy the country.
So the statement that gas prices can't come down is ludicrous. They could but there's too much money involved in keeping them high.
As far as a government endorsed private security, I'm surprised the author didn't mention Chile. They moved from a government debacle to private security plans and it's working well.
In essence your statement is replete with "it can't be done" when in fact it can be done and has been done.
Carnival Barker | 3.15.12 @ 3:43PM
Your comments about being able to lower gas prices are completely false. The whole market is rigged by the government to keep prices as high as possible. Just allowing all nine regions of the country to use the same blend would drop the price about $1 right now.
In fact, the country has been conned by the corn industy to introduce ethanol in each gallon of fuel. Although the cost appears competitive it's actually not. Ethanol is at least 15% less efficient than gas, and some estimates are 40% less efficient.
Ethanol also is hard on cylinders leading to many early engine failures. The corn mafia controls the Congress and with the massive amounts of money coming their way threaten to buy the country.
So the statement that gas prices can't come down is ludicrous. They could but there's too much money involved in keeping them high.
As far as a government endorsed private security, I'm surprised the author didn't mention Chile. They moved from a government debacle to private security plans and it's working well.
In essence your statement is replete with "it can't be done" when in fact it can be done and has been done.
Fiscal| 3.15.12 @ 4:20PM
Carnival, you are precisely wrong on the effect of ethanol on pricing. Please understand that I don't think the pursuit of ethanol makes sense for several reasons. However, the cost of fuel is NOT one of them. You see, the market cost is offset by two major factors. First, we give a subsidy of about 41 cents per gallon to the REFINERS if they blend ethanol. This was voted in by Bush and a Republican congress, by the way. (I don't like these kinds of subsidies but the oil companies actually wanted them). Secondly, with ethanol achieving about 6% of U.S. supply, the laws of supply and demand would indicate loss of this source would result in an increase in crude of about $15 per barrel. In addition, we get a tariff from the import of ethanol from other countries. The net effect is that ethanol actually decreases gas prices.
The effect on other sectors of our economy is very high, however. First of all, the production of ethanol raises corn prices substantially increasing the cost of food. Secondly, subsidies like this transfer wealth from the middle class to the wealthy who have investments and are a hidden tax to the poor.
If we had no subsidies and no ethanol production, then the price of fuel would not be much different.
That said, the cost to the country of this arrangement is significant because it raises federal spending, hence the debt, restricts trade, and raises food prices. The wealthy like these kinds of subsidies but if you are poor, or are in the middle class, they are just another hidden tax, which is why I don't like it.
That said, your argument on the price of gas is completely wrong because you probably got it from a politician, and not an economist. Here is a reasonable article on this from an economist's point of view:
http://www.greentechmedia.com/.....n-ethanol/
I happen to agree with his numbers, but don't agree with his conclusion. I think we should get rid of these subsidies and spend our money on research on both natural gas and other alternative fuels. Research is inexpensive compared to what we do now and a huge increase in research could help us navigate the cost curve more efficiently.
If you have economic research to the contrary where I can actually look at the numbers of all contributing factors, please let me know.
Carnival Barker| 3.15.12 @ 5:37PM
No, in fact I got it from an economist and almost anyone of them who know what they are talking about totally disagree with you. If you simply acknowledge the fact that ethanol is 15% less efficient then your point of view would be wrong. However, you totally gloss over the fact that it is the politicians who have rigged the game to keep prices as high as possible justifying the mind set you are displaying which is ludicrous.
Your comment about the Republicans is also completely false and misleading which indicates you haven't got a clue as to how it works which also indicates you're no economist.
Here's an article from Mises which explains how propped up the whole system is with ethanol and how it has driven up the price of food AND water.
Also, I like how you skipped over the Chilean retirement system which also indicates you haven't got a clue about your subject matter.
http://mises.org/daily/1886
In 1978, Congress began a series of efforts to boost the production of ethanol, an alcohol that American producers most commonly derive from corn. The idea was to produce a fuel in response to the energy crisis. The subsidies take many forms from vast income tax credits to companies that blend gas and ethanol to loan deficiency payments for the production of corn.
Like mohair, however, subsidies for ethanol have long outlived the original crisis. Congress recently passed a $12.3 billion energy bill, which President Bush soon signed into law August 8, 2005. In particular, this bill requires the use of 7.5 billion gallons of domestically produced fuels by 2012, which will ultimately increase the production of ethanol, or so the ethanol industry hopes.
The supporters of increasing ethanol production have presented their usual arguments such as how these bills create jobs in the Midwest (one estimate predicts Iowa's economy to grow five percent), provide better security and prices for farmers, and increase America's self reliance in terms of energy production.
Fiscal| 3.15.12 @ 9:29PM
I have a degree in econ, my friend. The people at Mises really don't believe in macro and that is their problem. The 15% less efficiency has nothing to do with the price of gas. In addition, if you read my response, I said that ethanol has extremely negative effects on the price of food and the economy in general. However, it does not increase the cost of gas, as you stated, because of government subsidies and the supply/demand curve.
On the other hand, if we take away the government offsets, you'd be right about ethanol raising the price even with the supply offset. But that is not the real world.
Republicans, under Bush and the Republican majorities in Congress are the ones that raised the ethanol subsidies, fella. That is just history. Look it up.
As I've stated, I'm against government interference in markets so I would be against any subsidies, including ethanol.
Carnival Barker| 3.16.12 @ 3:35PM
If you have a degree in economics you should request a refund. You have no understanding of what you're writing about and that's obvious.
fmm| 3.15.12 @ 3:59PM
Unfortunately you miss the main thrust of the article. The current taxes would shift into the alternate system to take advantage of having the money protected from the thieves in government, and the professional money managers have a wealth of resources to make the kind of interest indicated. SS is currently restricted to very low pay out investments which don't compare to what can be earned in the private markets.
Kingofthenet| 3.15.12 @ 2:35PM
How do you guarantee almost 4.0% in an interest rate environment like this? The heck with this plan just take my money and give me that.
Intelligent Design| 3.15.12 @ 4:00PM
The best solution for Socialist Security is to dismantle the whole thing. First, shut it down to new participants as of a certain date, say July 4, 2013. Then give everyone the ability to opt out by receiving a lump sum payment consisting of all employee and employer "contributions", plus interest at a nominal rate (say 3%), less any retirement payments already received. Most people under about 55 years would take the money and invest it in stocks, bonds, real estate, savings accounts, etc. Allow anyone already retired to continue with the system for as long as they choose (or until death).
In about 20 years there would be no one left on Socialist Security. The federal government (taxpayers) would be off the hook with no unfunded liabilities. Where would the money come from to fund the lump sum payments? Well, from government debt, of course. But a stake would have been driven through the heart of the monster, and there would be a surge of capital invested in private enterprise which in turn generates profits and tax revenues.
Social Security was originally designed as a minimal safety net, and as I recall even FDR said it was a "temporary" program. Instead, it has become a gigantic Ponzi scheme, a fraud in which the new suckers pay for the old suckers. The government even talks about the SS "trust fund", as if it existed. If corporate executives did the same thing with a private pension, they would be in jail.
Fiscal| 3.15.12 @ 4:25PM
It's obvious you don't believe in evolution -- or for that matter, that the earth is round.
YOU CAN'T SHUT DOWN SOCIAL SECURITY TO NEW PARTICIPANTS!!! Social Security has NO trust fund -- it is financed by those entering the workforce. If you did the math, you'd see that the federal deficit would climb dramatically.
I would love to get rid of Social Security, but let's not let our beliefs get in the way of facts.
Al Adab| 3.15.12 @ 4:55PM
You are correct in that Fiscal. The unfunded obligation would have to be covered, but it is less a problem than the current 16 Trillion debt. The payoff, redemption of bonds and so forth would have to parallel the actuarial tables over time.
A caution, do not let perfection get in the way of success.
Fiscal| 3.15.12 @ 5:26PM
Actually, unfunded Social Security obligations total about $17 trillion so there is no way to change without raising taxes. This is every bit as much of a problem as the current debt. Now, I am actually in favor of 10-15% Social Security tax increases as well as means testing and raising the limit over a period of 20 years to wean us off of the current Social Security, because I can't find any way of doing this without paying or having the Fed print more money. You can't "parallel" the actuarial tables any other way. Your recommendation would be like paying off your credit card bills with a home equity loan -- you eventually end up owing even more money.
Carnival Barker| 3.15.12 @ 5:50PM
Yes, when it isn't working now, double down and create twice the disaster. Wonderful plan!
Fiscal| 3.15.12 @ 4:43PM
Here is an article by Republican Bruce Bartlett giving more information on unfunded liabilities.
http://www.forbes.com/2009/05/.....icare.html
Fecal| 3.15.12 @ 7:12PM
Only liberal idiot liars like you think a fanatical Keynesian liberal idiot liar like Bruce Bartlett is either a Republican voice or conservative voice much less a voice of sanity.
Only liberal idiot liars like you think the government is blamelesss in the housing crisis and that the financial industry and deregulation is exclusively to blame.
Only liberal idiot liars like you think abortion and homosexual unions are constitutional unalienable rights.
Only liberal idiot liars like you think evolution theory is settled scientific fact.
Only liberal idiot liars like you think conservatives are racist religious extremists.
Only liberal idiot liars like you think Republicans are trying to expand government.
Only liberal idiot liars like you think free market enterprise must be government regulated.
Only liberal idiot liars like you think tax cuts do not create economic growth.
Only liberal idiot liars like you think Fox News is the media outlet noted for blatant lies.
Only liberal idiot liars like you think conservatives are no more moral than liberals.
Only liberal idiot liars like you think forced government welfare is more Christian than even voluntary Christian assistance.
What a liberal idiot liar.
Fiscal| 3.15.12 @ 9:41PM
I understand...
This is a different Bruce Bartlett than the one who worked for Reagan.
The fact that mortgage originators didn't have to take the risk of the mortgages they made had no effect on the housing bubble.
The fact that personal liberty is more important than forced religious belief is not good for our country.
The fact that science has shown through evidence that evolution has a basis is not important. Oh, the world was formed 5000 years ago, right?
The fact that far right conservatives tend to be the religious extremists is not a fact????
Are you saying when Republicans controlled the Presidency and the Congress they didn't expand government???
Are you saying that the market will correct cheaters and that government doesn't have a role prosecuting them? Really???
Are you saying that GDP grows more when marginal tax cuts are greater??? This must be part of intelligent design.
Are you really saying that Fox News doesn't lie at all?
Are you really saying that someone who thinks that war should be avoided is less moral than someone who thinks that you should make everyone Christians?
I knew there was a reason you called yourself "Fecal".....
By the way, if you think what I've said about you right wing idiots is wrong, you should see what I have to say about those left wing fanatics who don't have a shred of economic sensibility or a sense that humans are on the top of the food chain.
Fecal| 3.16.12 @ 1:43PM
Fiscal's fecal material lacks credibility because Fiscal's fecal material is fecal material typically moved on by liberals who by definition are all every one a liar:
"Here is an article by Republican Bruce Bartlett giving more information on unfunded liabilities" (Fiscal 3/15 @ 4:43pm)
{liberal lie: ignored reality that Bartlett is a discredited Keynesian fanatic}
"financial companies [were] the major cause of the problem -- not the CRA, not Fannie and Freddie, not government" (Fiscal 2/24 @ 1:04pm)
{liberal lie: ignored reality of cause and effects of housing financial crisis}
"tell me where in the Constitution you find anyplace to outlaw abortion and restrict marriage" "Any infringement on personal liberty like banning same sex marriage or interfering with the personal choice of an individual on abortion" (Fiscal 2/24 @ 7:26pm & 1:12pm)
{liberal lie: ignored reality of Constitution's Preamble not to mention the justification for the Constitution itself - the Declaration of Independence}
"It's obvious you don't believe in evolution -- or for that matter, that the earth is round" (Fiscal 3/15 @ 4:25pm)
{liberal lie: ignored reality that evolution has yet to merit the validity of a 'theory' based on the scientific method}
""Conservatives" have become religious extremists oriented towards whites" (Fiscal 2/11 @ 5:53am)
{liberal lie: ignored reality that the race card signifies capitulation in an argument}
"It is a mistake not to fault Republicans for forcing more Government on us" (Fiscal 2/24 @ 3:46pm)
{liberal lie: ignored reality with any mention of exponentially more Democrat expansion}
"Markets do not behave well on their own" (Fiscal 2/24 @ 3:57pm)
{liberal lie: ignored reality that markets self correct infinitely better than even the optimal conceivable potential of government to do so}
"Republicans actually believe that tax cuts can stimulate GDP" (Fiscal 2/24 @ 4:45pm)
{liberal lie: ignored reality that gdp = consumption + investment + government + net exports}
"Fox will blatantly lie" (Fiscal 2/20 @ 2:24pm)
{liberal lie: ignored reality Fox is most objective network between ABC, CBS, NBC, PBS, NPR, CNN, and MSNBC and ignored request for example of any Fox lie for 26 days now and counting}
"I remain unconvinced that any political ideology is more "moral" than any other" (Fiscal 2/28 @ 9:16am)
{liberal lie: ignored reality of 55 million 'legal' killings of innocent and defenseless unborn American babies by one particular political ideology}
"Believing in social welfare and helping the poor is just as "Christian", perhaps even more so" (Fiscal 2/11 @ 5:53am)
{liberal lie: ignored reality between forced against free will acts of tyranny and voluntary with free will acts of liberty}
Only liberal idiot liars state pathetic and despicable nonsense such as this fecal material.
gazinya| 3.15.12 @ 7:35PM
There are five counties in California that opted out of Social Security when it was inacted. The 'saftey employees' were not believed to survive past 55 years. And they didn't. So the county I retired from is not part of SS for its safety employees, firefighters and sheriffs. We are not connected to cal-pers or the county. Like the article states, when a person retires he/she knows what their retirement is going to be with a max 3% COLA every year. If inflation is higher than 3% then the extra % is banked. If the rate goes lower than 3% then the 'banked' % is added. This is important. The money I contributed was 'after tax' contribution and after 5years of investment I could have quit my job and taken all of the money out. At retirement I could have taken all of my money out. If I died then all the money and interest that I paid would be part of my estate. I have always wondered why since this gives me an 'early retirement', age 58 when I retired, after 33 years of fire service and a much larger retirement than SS more counties don't jump on board. By the by, the retirement board also includes two members from the fire and law inforcement and 5 'wall street' types. No junk bonds or 'get rich quick' stuff. Long term. The 2008 crash did not affect my retirement but because there was a hit on the portfolio those retireing in 10 or more years had to kick in more or get a little less. The fund has grown and now those rules have changed. It is the only way to go for a 'forced contribution.'
Kruel Hunter| 3.15.12 @ 8:44PM
Facts are wonderful things and illustrate the benefits of privatization beautifully. Unfortunately these are inconvenient facts to congress and will therefore be ignored. Congress will not ever give up their control over SSI funds, period, end of story.
Kingofthenet| 3.15.12 @ 10:44PM
ANY 'Insurance' where EVERYONE takes more than they put in is DOOMED. We have to get back to what this was meant to be, a protection against poverty in retirement plan. It has to be harshly means tested, it HAS to be out of the control of the individual(What good is a plan if some finicially illeterate person is allowed to make the investment decisions.)
WestHoustonGeo| 3.17.12 @ 1:48PM
I agree that this successful Texas model should be adopted nationwide.
However, that won't happen with the current Texaphobic regime.
Little boy bho has punished Texas for our success in jobs, energy and moral fortitude. Just now his AG is dictating that voter fraud be allowed in our next election.
He is attempting to strangle our economy by restricting drilling. Hell, he told the (Houston Resident) NASA chief to send the Space Shuttle to New York instead of Houston (where literally EVERY NASA ASTROUNAUT and many Russian Cosmonauts, Europeans, Japanese, etc. were trained) because we won't vote for him.
He will NEVER accept anything from Texas! And, quite frankly, we don't accept him, either.