ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, October 10, 1996 TAG: 9610100074
SECTION: NATIONAL/INTERNATIONAL PAGE: A-6 EDITION: METRO
Details of the three options to be put forward by the Advisory Council on Social Security:
* Direct government investment: The government would invest 40 percent of the Social Security trust funds in stocks, with the remainder split between corporate and government bonds. After adjusting for inflation, the amount invested in stocks would be $800 billion between 2000 and 2015. The only change in benefits would be a reduction in the inflation adjustment to reflect revisions in the Consumer Price Index.
* Maximum individual accounts: The government would divert a payroll tax of 5 percent to workers' own ``personal security accounts'' out of the current payroll tax of 12.4 percent. Retirees would be guaranteed a flat monthly payment equal to two-thirds of the poverty level, which currently would amount to $410. Their remaining benefits would come from the individual accounts. The inflation-adjusted total invested in stocks would be $1.6 trillion between 1998 and 2015. The plan also would impose a new 1.5 percent payroll tax over 70 years to pay for transition to the new system, as well as for borrowing $650 billion in new ``liberty bonds.'' The retirement age would increase to 67 by 2012 and increase by one month every two years after that.
* Minimum individual accounts: A compromise supported by Council Chairman Edward Gramlich. The government would increase the payroll tax by 1.6 percent and allow an estimated $500 billion between 1998 and 2015 to be invested in a limited range of stock funds, at the worker's discretion. The retirement age would increase to 67 by 2012 and increase after that by one month every two years.
- Associated Press
LENGTH: Short : 38 linesby CNB