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Ryan, Sununu, Doolittle and Franks Social Security Personal Savings Guarantee and Prosperity Act (HR 4851)Summary
Details
| Voluntary |
Yes, for every worker under age 55 beginning of 2005.
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| Account Size/Source |
Carve out: phase in until 2016: 5% of the first $10,000, tax-free indivivual accounts; and 2.5% of the taxable earnings above $10,000. After 2016, 10% of $10,000 tax-free; 5% of taxable earnings above $10,000. (averaging out to be 6.4% for the average worker after 2016).
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| Additional Contribution |
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| Benefits from Current System |
OASI benefits would be reduced based on the proportion of potential lifetime contributions that was realized. The reduction would equal the current benefits multiplied by the ratio of PV of all contributions to worker's account to the PV of all potential contributions that might have been made if the plan had been in existence throughout worker's working lifetime. Contains a provision for recognition bonds, but they are only redeemable as a stream of future Social Security benefits, and they are not tradable. They simply represent a promise on future SS benefits.
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| Investment Structure |
Workers choose investments by picking indexed funds managed by a major private investment firm from a list officially approved, to ensure soundness and security. Very similar to TSP for federal workers.
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| Inheritability |
Assets would be transferrred to remaining spouses account, and would be allocated to provide annuities for any surviving children. If no survivors, account balance goes to worker's estate.
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| Withdrawal Options |
Required to purchase a life annuity that would provide monthly payments at least equal to benefits under current law. The amount above that may be disbursed.
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| Minimum Benefit |
Social Security benefit plus account generated benefit is guaranteed to be as much as the current promised benefit levels.
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| Changes to Benefit Formula |
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| Retirement Age |
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| Other Benefit Changes |
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| Disability/Survivors |
No Changes |
| Transition Funding Mechanism |
~General revenue transfers equal to a 1% reduction in the growth rate of all government spending for 8 years. ~ Recapture of corporate taxes that result from the personal account investments. ~Issue "off-budget" bonds for about $1.108 trillion.
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Bill Track
H.R. 4851
| Sponsor |
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Co-Sponsors |
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Rep. Paul Ryan (R-WI) |
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Rep. John Doolittle (R-CA) |
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Rep. Trent Franks (R-AZ) |
From the Sponsor
Ryan Introduces Bill to Save Social Security, Guarantee Benefits, Promote Prosperity
H.R. 4851, The Social Security Personal Savings Guarantee and Prosperity Act of 2004
Commentary
"Ryan's plan a fix for Social Security," by Paul Ryan, Janesville Gazette, August 8, 2004.
"Outside the (Lock) Box," by Paul Ryan, The Wall Street Journal, July 19, 2004 .
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