The Technology (Issues & LAGtime) Behind the Social Security Debate

[Ouabache]

The Technology Behind the Social Security Debate
http://www.baselinemag.com/article2/0,1397,1781754,00.asp


...a report commissioned by President Bush on ways to strengthen Social Security, released in December 2001, didn't mention information technology once. Mark Lassiter, press officer for the SSA (Social Security Administration), says pondering the technology needed to handle private accounts is "premature" given that the proposals are still being formed.

"In politics, you often decide what to do and then ask how to do it," says Dallas Salisbury, CEO of think tank Employee Benefit Research Institute. "It's as if the question of how to do it is not being asked." One thing is certain: Social Security reform would require heavy lifting on the IT side. And Bush has said he wants private accounts in place by 2009. Hitting that target is increasingly unlikely.

Private accounts introduce moving parts. What percentage of funds will be invested in a private account? Did the allocation change this quarter? Should the accounts be paid in an annuity if below a set level or taken in a lump sum? This information would probably be collected quarterly.

And money needs to go to accounts faster. Currently, it can take 18 months to reconcile individual contributions to Social Security, Salisbury says. That lag applied to private accounts means you could miss an entire bull market. ....>> (or miss extracting your pathetic ass from an impending crash)<<<my thought

Good article, in four parts all on the website. I missed posting it in LBN, and I know it would sink like a rock in GD. So I think this is a good place. Warning: there do seem to be some subtle apologetics for the Bush 'plan' sprinkled throughout this. Maybe it was just the author's attempt at some 'fairness' for the fucked up situation that private accounts would bring.

[wishlist]

1. Revamping SS would be very complicated and costly

Most people don't realize the technical difficulties posed by converting the current complicated but smooth-running system that has take decades of fine tuning, to a new system with new benefit calculation comps and completely new record keeping abilities.

The Federal Thrift Savings Plan (much touted by proponents of private accounts) went through some difficult years to modernize its technical record keeping features and lost a large amount of money to a government contractor who promised to upgrade that system but failed to do what they promised. The Thrift management board tried to sue the contractor but the Justice Dept under Ashcroft would not allow the contractor (a Bush contributor) to be sued or penalized so investors lost money from their fund returns to cover the failures of the contractor.

I was aware of this since I have a Thrift Account and was notified in my statements about what was going on. Here is one article talking about the situation from BuzzFlash:

http://www.buzzflash.com/editorial/2002/02/021302_Justice_Blocks_Lawsuit.html