TY  - JOUR
AU  - Goldberg,Fred T., Jr.
AU  - Graetz,Michael J.
TI  - Reforming Social Security:  A Practical and Workable System of Personal Retirement Accounts
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6970
PY  - 1999
Y2  - February 1999
UR  - http://www.nber.org/papers/w6970
L1  - http://www.nber.org/papers/w6970.pdf
N1  - Author contact info:
Fred T. Goldberg, Jr.

Michael Graetz
Yale Law School
Yale University
New Haven, CT 06520
E-Mail: michael.graetz@yale.edu
AB  - This paper details a method for implementing personal retirement accounts (PRAs) as a part of Social Security reform.  The approach described here answers the following questions: how funds are collected and credited to each participants' retirement account; how money is invested; and how funds are distributed to retirees.  It is designed to accommodate a variety of answers to a wide range of important policy questions; to minimize administrative costs and distribute those costs in a fair and reasonable way; to minimize the burden on employers, especially small employees who do not now maintain a qualified retirement plan; and to meet the expectations of Americans for simplicity, security, control, and independence in ways that are easy to explain and to understand.  The system we describe relies on existing payroll and income tax mechanisms for collecting PRA funds and crediting PRA accounts.  It provides two basic options for investments: (i) a simply system involving a limited number of funds sponsored by the Social Security Administration and managed by private companies, and (ii) privately sponsored funds with additional investment choices.  It also provides two distribution alternatives if distributions are required to be annuitized: (i) an increase in Social Security benefits, and (ii) inflation-protected annuities provided directly to retirees by private companies.
ER  -