How Three Texas Counties Created Personal Social Security Accounts and Prospered

Forbes ^ | May 12, 2011 | Merrill Matthews

[Cincinatus' Wife]

Across the country, state and local governments are facing huge unfunded liabilities for their employee pension plans. And then there’s Social Security.

But three neighboring Texas counties, which opted out of Social Security 30 years ago by creating personal retirement accounts, have avoided a fiscal train wreck while providing retirees with even more retirement income.

Galveston, Matagorda and Brazoria County employees, many of them union members, have seen their retirement savings grow every year, even during the Great Recession. If state and local governments—and Congress—are really looking for a path to long-term sustainable entitlement reform, they might start with what is referred to as the “Alternate Plan.”

Most proposals for creating a defined-contribution alternative to a state pension plan or Social Security use an IRA or 401(k) model. That is what the Utah legislature passed for new state employees beginning in July.

Under that model, the employee’s money, along with any employer contribution, goes into a personal account that invests in a limited number of approved options. Those accounts usually follow the stock market, in good times and in bad. It’s those “bad times,” like the one the country recently went through, that critics point to when opposing personal retirement accounts.

But the Alternate Plan takes a different approach, one I call a “banking model.” Employee and employer contributions are actively managed by a financial planner—in this case, First Financial Benefits, Inc., of Houston, which both originated the plan and has managed it since inception.

[Cincinatus' Wife]

Page 2

And it doesn't vanish into thin air when they die -- they own it.

Check it out.

[PLD]

I did not know about this..I plane to send it on to others..

Thanks Cincinatus’Wife..

[Cincinatus' Wife]

Thanks!

[deport]

Employee and employer contributions are actively managed by a financial planner—in this case, First Financial Benefits, Inc., of Houston, which both originated the plan and has managed it since inception.

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For some reason ENRON comes to mind when I read the above......

[Track9]

Bump!

[shield]

Perry Ping....

IF you'd rather NOT be pinged FReepmail me.

IF you'd like to be added FReepmail me. Thanks.

[Cincinatus' Wife]

For some reason ENRON comes to mind when I read the above......

Nice turd in the punch bowl "deport."

The "Alternative Plan" has been working for 30 years, while Social Security is "splat."

[Cincinatus' Wife]

*****As Texas Governor Rick Perry boasts of those three Texas counties, “Employees in those private plans, having exercised their liberty at Washington’s sufferance, are reaping the benefits.”*****

[shield]

The only part I do not care for is this:

Galveston, Matagorda and Brazoria County employees, many of them union members

I hope Perry uses these counties as templates for the future of SS...W tried to change SS and we saw what happened.

One of the South American countries did this sometime ago...and it has FAR exceeded any other country.

[deport]

Yep them ‘floaters’ come to the surface when money is aplenty.

[Cincinatus' Wife]

Did you read the whole article before you posted your comment?

[deport]

Nope..............

[smoothsailing]

[Rick_Michael]

to read thanks...

[andyk]

I want in. What a great way for individuals to prepare for their retirement, and to reduce spending and power at the federal level.

[Cincinatus' Wife]

Great political cartoon.

I was thinking this morning: The American people don’t have Texas president fatigue, they have buyers remorse and want to go back to the Texas brand.

[Nicojones]

Thanks for posting that CW. When Perry called social security a Ponzi scheme, he was dead on right. It meets every definition of a Ponzi scheme. The only difference is that a Ponzi schemer can’t print more money. However, did you see the establishment republicans on the talk show circuit tear him down for that comment? They were right there alongside the Dems. it was appalling. Every well meaning conservative should be coming to his defense. The new deal farce is coming to an end and its time we call it like it is. He was the first real Presidential contender to have the cojones to do it. The Texas plans you’ve posted are definitely viable alternatives.

[Cincinatus' Wife]

Every one needs to email their Senators and Reps (who have such gold-plated retirement and healthcare accounts -— that will never be deemed less than gold-plated) why in the hell have they not PUSHED for this?

Answer: YOUR MONEY isn’t run through their fingers and re-directed to their causes — leaving your accounts empty.

Constituents should be SCREAMING loud about this.

And send letters to your papers’ Editors.

[Cincinatus' Wife]

.....Every well meaning conservative should be coming to his defense. .......

Yes, they should.

[SoJoCo]

There isn't a whole lot new in this. As the article says, states and municipalities have done this on their own for years. My father-in-law spent 30 years paying into the state of Ohio retirement plan instead of Social Security, and got a nice pension payment as a result. Railway workers have the Railroad Retirement Board instead of Social Security. The exception of these three seems to be that they may have managed their money better. That and they didn't add on another municipal pension plan on top of Social Security like so many other governments have done.