Beyond Ideology: Are Individual Social Security Accounts Feasible?

• Author: Greifer, Nicholas
• Position: Review

Salisbury, Dallas, ed.

Washington, D.C.: Employee Benefit Research Institute (244 pages)

Beyond Ideology: Are Individual Social Security Accounts Feasible? is devoted to the topic of Social Security reform. The book is the result of a December 1998 policy forum sponsored by the Employee Benefits Research Institute. Rather than a seamless flow of chapters, Beyond Ideology is composed of speeches from some of the leading thinkers in the pension policy field, allowing it to present a wide variety of viewpoints on the subject. The book highlights the scope of the reform implementation problem, the necessary tasks for a successful implementation of reform, and scenarios for setting up accounts.

The book offers a wide array of commentators on the subject. They vary from Robert Ball, former Social Security Commissioner in the 1960s during the Great Society; to Brian Reardon, manager of legislative affairs for the National Federation of Independent Business. In addition, speakers from various think tanks, trade associations, and businesses that administer pensions contributed to the publication.

Beyond Ideology addresses Social Security reform from many separate angles. For example, Kelly Olsen and Dallas Salisbury's chapter identifies 12 discrete tasks necessary for setting up individual (defined contribution) accounts, such as enrollment, investor education, and the movement of funds from employers' to retirement plan administrations. By contrast, Nora Daly shows the current tasks involved in just one area: reporting payroll information to the federal government. Because of the current time lag involved in having the federal government update its records, updating would need to take place much faster (since any uninvested dollars sitting idle would likely hurt retirement investors). In addition, Girard Miller helps make sense of the complexities of reform by presenting four basic models on how the Social Security program could be implemented, roughly in order of increasing complexity and individual choice:

1) the "Universal Fund" scenario envisions employees and employers funneling funds into one nationally administered fund that credits an individual account with an actuarially determined interest rate;

2) the "Family of Index Funds" scenario gives employees the choice between a few index funds that have low fees and could be operated under a federal contract;

3) the full-blown "Defined Contribution" option is an employer-based plan that...