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- Title
Maintaining Social Security.
- Authors
Jones, Thomas W.
- Abstract
The article begins with the premise that the Social Security Advisory Council could not reach consensus on a single proposal for reform because the problem is much larger than a matter of technical solutions to a long-term actuarial deficit. The U.S. Congress should consider adopting these areas of agreement for legislative action. Such action would serve the public interest by stabilizing Social Security. Individual accounts will bear the risks of volatility in market returns and ill-timed investment decisions. Stock market prices can be irrationally high or low for extended periods of years as the emotions of greed or fear override rational valuation analysis. Individual defined contribution pension plans currently have a buffer against adverse individual account investment performance. That buffer is called social security, a system offering a guaranteed defined benefit pension income that meets basic retirement income needs. Individual accounts will also suffer from high administrative and investment advisory expense charges, and possibly from substantial sales loads and commissions.
- Subjects
UNITED States; FINANCE; SOCIAL security; PENSION trusts; PRICES; PUBLIC interest
- Publication
Benefits Quarterly, 1997, Vol 13, Issue 3, p19
- ISSN
8756-1263
- Publication type
Article