WWW Opinion Times

Tuesday, November 16, 2004

A Preview of Social Security Battles to Come

The Adam Smith Institute in London talks about changes which British Parliament is beginning to make in accounts available to citizens there which are similar to our IRA's here in the United States. It is a requirement that 75% of those funds--which are set aside on a pre-tax basis as well--be used to purchase annuities. The benefit to the government is that annuities are paid out on a guaranteed monthly basis until death which it prefers so that the elderly will stay off the welfare rolls. The drawback is that any unused portion of the annuity stays with the issuing company and cannot be passed along to ones spouse or dependents. The House of Lords recently voted to remove the annuity requirement because there is no flexibility in the amount of monthly income an individual can take or any means by which they can pass along these saving accounts to future generations.

It seems that similar restrictions will be proposed by the opponents of President Bush's plan to reform the Social Security system (Visit this website and these articles on Bush's plan).

Experience shows that some onerous restrictions will be attached to any bill which comes out of Congress. And the requisite inequities of the plan which emerges will need to be addressed sometime in the future.

One more time around FDR's retirement wheel!