Proposals

Truth About Social Security ("TASS") Plan
Benefit Payouts

Traditional (defined benefit) plan

Payouts under the traditional plan would proceed essentially as they occur today. The only changes would be the adjustment for the those who held a mix of traditional defined contribution credits/assets and that the Cost of Living allowance would be calculated on the changes in the Bureau of Labor Statistics' Consumer Price Index for the elderly (CPI-E).

As noted in the description of the two plans offered, defined benefit payouts would be calculated based on adjusting the benefit to reflect both the proportion of the employee contribution diverted to the contribution accounts and the number of years of contributions. The purpose of this calculation is to assure the equitable distribution of benefits, based on the individuals determination of the distribution between plans. It is not intended to penalize the employee for the choices made or to redistribute the burden placed on the benefits determined independently by either plan.

Simply, annual reported salaries will be wage-index adjusted, the highest 35 years will be selected and the weighted PIA calculated for that year. The resulting PIA will be reduced by the percentage of that year's salary invested in a individual account and the resulting annual PIA's will be averaged over 35 years.

New (Defined Contribution) Plan

At the time of retirement, individuals will use the accumulated value of their individual accounts to purchase a lifetime annuity, with survivor benefits (if they have a spouse or surviving dependent) and cost of living escalator based on the COLA calculated for the elderly (see above). The minimum annuity shall be the lesser of either one which can be purchased from the full value of their individual account or one which provides sufficient benefits that, combined with any benefits from the traditional account, assures they (and any spouse/dependent) are assured a benefit not less than the minimum benefit of 120% of poverty level for the elderly.

Any accumulated value in the individual account in excess of that required to purchase the requisite annuity may be used to purchase additional annuity value, withdrawn or left according to the worker's personal preferences. Such finds shall be deemed to be the property of the worker (and, jointly, spouse) to be disposed of as they see fit.

Next: Supplemental benefits