Funding Social Security
A Strategic Alternative

This book offers a serious consideration of the worldwide debate on social security reform.

Laurence S. Seidman (Author)

9780521652452, Cambridge University Press

Hardback, published 13 April 1999

200 pages, 1 b/w illus. 2 tables
23.8 x 16 x 1.8 cm, 0.415 kg

"Too often, the first casualty of intense debate is sober and honest analysis. As the debate on Social Security reform intensifies it is, therefore, particularly gratifying to come upon a study as clear, sober, and sensible as Laurence Seidman's Funding Social Security: A Strategic Alternative. In this book, he explains why it is important both to fund Social Security - and thereby boost national saving - and retain the reliability of pension benefits that Social Security provides." Henry J. Aaron, The Brookings Institution

A serious consideration of the debate on social security reform that is taking place in many countries around the world. Professor Seidman advocates the concept of 'funded social security' as a middle position between pay-as-you-go (PAYGO) social security and privatized social security, and constitutes a politically strategic alternative. His analysis covers two distinct components, fund accumulation and portfolio diversification. The concept of funded social security uses a mix of payroll taxes and portfolio investment income to finance benefits. With funded social security, the government contracts with private investment firms to manage the portfolio of the social security trust fund. It is entirely a defined-benefit plan without any individual defined-contribution accounts; each retiree's benefit is linked by a legislated formula to the retiree's own wage history. The benefit is an annuity - an annual benefit that continues as long as the retiree (or spouse) lives - and is automatically adjusted annually for inflation.

1. Funding social security: an introduction
2. Funded vs PAYGO social security
3. Funded vs privatized social security
4. Funded vs PAYGO social security with individual accounts
5. Funded vs means-tested social security
6. Questions and answers.

Subject Areas: Public finance [KFFD]