This proposal would allow workers over the age of 18 to participate in the Social Security Guarantee (SSG) Accounts. The SSG Account of each worker would be credited from the General Fund of Treasury with an annual contribution equal to 4 percent of taxable earnings up to $1,000. This proposal would gradually eliminate the retirement earnings test between 2005 and 2010 for beneficiaries who are between 62 and normal retirement age. Under this proposal, every retiree would receive at least the current benefit level.
| Voluntary |
Yes, for every worker over the age of 18. |
| Account Size/Source |
The account of each participant would be credited from the General Fund of Treasury with an annual contribution of 4% of taxable earnings up to $1,000 (in form of tax rebate).
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| Additional Contribution |
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| Benefits from Current System |
At retirement, individual's account balance would be gradually withdrawn and transferred to OASDI Trust Funds.The beneficiary would receive a computed amount based on a CPI indexed unisex life annuity as along as it is higher than the promised level of benefits, otherwise receive the promised level.
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| Investment Structure |
3 portfolio options: 60/40 (default), 65/35 and 70/30 stock index funds/high-grade corporate bond index funds. Switching among options would be limited to once a year.
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| Inheritability |
Account balance goes to worker's estate.
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| Withdrawal Options |
At retirement, participants would receive 5% of their account balance a lump sum. Individual's account balance would be gradually withdrawn and transferred to OASDI Trust Funds. The beneficiary would receive a computed amount based on a CPI indexed unisex life annuity as along as it is higher than the promised level of benefits, otherwise receive the promised level.
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| Minimum Benefit |
Social Security benefit would at least be the promised level.
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| Changes to Benefit Formula |
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| Retirement Age |
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| Other Benefit Changes |
~Extend benefits to disabled surviving spouses who are under age 50. ~Eliminate the 7-year limitation for disabled surviving spouses. ~ Waive the 2-year duration of divorce requirement. ~Provide child-care credits up to 5 years for children under age 7. ~Reduce government pension offset from 2/3 to 1/3 of the government pension. ~Gradually (2004-2009) eliminate retirement earnings test for beneficiaries age 62-NRA.
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| Disability/Survivors |
~If disabled, account balance would be used to calculate an annuity guaranteeing current disability benefits, plus would receive 5% lump sum payment.~Increase widow benefits to 75% of the benefit the couple would have been receiving.
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| Transition Funding Mechanism |
Transition would be funded new debt. Future Social Security surpluses would be set aside in a "lock box" which could be tapped to pay back the debt and interest.
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