Galveston TX SS Opt out Plan

[REACTIVATED IN CT]

Yesterday I saw an excerpt of an article about how much better than SS this Galveston TX opt-out plan was. Since then I've been trying to figure out how it could be so sucessful in light of everything else we have been reading on this topic. So today I googled the topic and found a report posted by the Pension Research Council



<snip> Key findings indicate that, in general, the Galveston Plan offers higher initial benefits than Social
Security to workers with higher earnings and/or in cases where there are no dependents that would
qualify under Social Security.3 Social Security tends to offer higher initial benefits than the Galveston
Plan to workers with lower earnings and/or to families with dependents who qualify for Social Security
benefits. Although many of Galveston?s initial benefits are higher than Social Security?s, they are not
indexed to inflation and lose value relative to Social Security?s over time. Galveston?s Plan does not have
a waiting period for coverage (full coverage begins in the first pay period of employment); it offers more
pay-out options (lump-sum or various annuities) than Social Security; and, in general, provides higher
benefits to those with higher earnings and/or those with fewer dependents who would qualify under Social
Security. Furthermore, under the Galveston Plan, contribution rates (payroll taxes) are higher than under
Social Security; there is a risk of outliving one?s benefits under certain pay-out options (lump-sum or fixed
annuity); there are no additional spousal or dependent benefits (benefits are based entirely on
contributions);4 benefits are paid to a named beneficiary and there is no guarantee that benefits will be <snip>


http://ideas.repec.org/p/wop/pennpr/99-22.html

[norml]

1. Also those touting this scam use studies from 1999 to get their numbers.

From one of the many con web sites pushing this scam... "For instance, the city of Galveston, Tex., opted out of Social Security in 1981, allowing its workers to receive retirement and disability benefits through their personal accounts. A 1999 GAO study found that a 21-year-old low-income disabled worker would receive $829 per month from the personal-account plan, while a similar worker would receive nothing from Social Security. Among older low-income workers, Galveston's disability benefits averaged between 50 percent and 100 percent higher than under Social Security."

"Chile, which has a fully privatized Social Security system, is another good example. A 1996 study found total disability benefits averaging 75 percent more under privatization than under the prior government-funded system. Moreover, the Chilean system offers benefits for partial disability, helping such individuals remain in the workforce. The U.S. system offers no such protections."

For Chile they have to distort numbers from 1996. They should do a web search on any of these Countries for that Country's name, and Social Security Privatization. They will then find for themselves what a disaster it's been in every Country it's been tried.

[REACTIVATED IN CT]

2. I posted an article yesterday...

that reports the negative results other countries have had

[NickofTime]

3. California Teachers looking at going back into Social Security System

Social Security is a better deal than any private plan. Right now California is looking at Social Security System, because privatizing the California Teachers' pension plan will not work.

http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2005/02/03/financial2124EST0419.DTL
">Privatization will Hurt California Teachers

http://biz.yahoo.com/bw/050203/35967_1.html "> Board Formally Opposes Legislation

"California's teachers stand to lose more than other employee groups. Unlike most other public employees affected by this proposed change, California's teachers do not belong to Social Security and therefore have no other source of retirement income as a "safety net. ..."As trustees for California's teachers, we are concerned about the long-term impact this would have on the fiscal strength of the system. We are also greatly concerned about the impact this change would have on the future of our teachers," said Board Chair Gary Lynes. "Under the CalSTRS Defined Benefit Program, our members cannot outlive their benefit. Simply put, changing to a defined contribution plan would rob them of that security."

Republicans always want to replace defined benefit plans (like Social Security) with stock-market gambling schemes. The California Teachers' Retirement Board recognizes that Social Security is a necessary safety net.

[REACTIVATED IN CT]

4. We need that safety net!!

[REACTIVATED IN CT]

5. Galveston Plan

NPR did a piece on this on today's Morning Edition. It should be on their website tomorrow (2/11). I was heading out to catch the commuter train and did not hear it all - but did hear that the benefits for some were not as good as they would have been if they had stayed with Social Security. They did say that this is the plan that gave * the idea to privitaze SS

[franmarz]

6. The Galveston opt out SSplan---

As an original Texan-I have since been around the globe and learned better, that there is a rationale that only in Texas is understood.
Texas is a whole other nation in thinking and acting. That is why the attitude of "my way or the hiway" is typical of some people.