Don't use Britain as model for Social Security, official warns

[Rose Siding]

WASHINGTON - The man in charge of recommending changes to Great Britain's retirement system offers Americans a warning: Beware of changes to Social Security such as those President Bush is urging.

Nearly 20 years ago, Britain adopted a form of personal investment accounts much like the one Bush proposes. Britain also changed the way it calculates retirement benefits to adjust for inflation, keying them to consumer prices rather than wages, as Bush and others are considering for Social Security.

The result: "We have created the most complicated pension system in the world," said Adair Turner, a Merrill Lynch vice president and the chairman of the United Kingdom Pension Commission.

Moreover, Turner said, contrary to the benefits promised when the British changed their system, their new approach isn't increasing national savings, isn't fostering an "ownership society" and workers are retiring poorer than they did before.
...
White House Spokesman Trent Duffy countered that once personal accounts were completely phased in decades from now, the transition debt would be over, private accounts would be gaining capital, government would be paying less in benefits, and thus national savings would expand.

http://www.realcities.com/mld/krwashington/11113093.htm

[blogbear]

1. Will Tiny Tim Be Back? Blimey! Don't Know If I...

Want To Go The Way of Those Brits..At Least From The Day Of The Spirits We Made It To A 'Chicken In Every Pot' Briefly. Not To Change The Subject But Just How Is Ol' Hatchett-Chin Warming Up To Cammy? Seems Like They've Had Enough On Their Plate Over There. Maybie We Should Focus On Here?

[merwin]

2. People have been saying this for a long time now. And they just come out

with this?

[Rose Siding]

5. And in a week or two, CBS will find someone who likes the plan

and do a whole story on them. That's how they handled their coverage of Chile's system. The NYT, LAT and the Globe all ran fair, in-depth pieces during the last few weeks- it was like CBS hadn't read ANY of them.

[EVDebs]

3. So, is THIS the Bush plan ? The timid Repubs won't say will they ?

[weatherphobia]

4. Under bush's new plan , Imy benefits will decrease 9%, I checked.

[newyawker99]

9. Hi weatherphobia!!

Welcome to DU!! :toast:

[NYC]

6. ...and workers are retiring poorer than they did before...

The key phrase in the entire article:

...workers are retiring poorer than they did before...

Same is true in Chile.

[no safe haven]

7. Australia has a similar plan and it’s a JOKE

You’d better not plan on living much longer after retirement if you don’t want to end up begging on the streets. The returns are not enough to see a person through retirement of 25+ years. You’d have to start putting away for retirement from the first day you went to work until you retired at 65. Even then, investments made by companies (your money) are subject to falls in the stock market and that can seriously affect what money you end up with. Of course, the chronically unemployed, underemployed, casual workforce will have next to nothing saved for their "golden years".

The pension (superannuation) companies here are making money hands over fist by getting high interest on short-term investments in the money market, while I, the investor, get a minimal rate of return. Plus, after retirement, if I choose to take a lump sum, I will be slugged with income tax on the lot.

It is compulsory here in Australia, paid by both the employee and employer, but I consider the money I’ve had taken out of my salary to be just a total waste. At this stage, I have about $10,000 to live on for the rest of my life after I retire. Like I said, it’s a joke. (However, we do have free hospital, medical and subsidised drugs, which is sort of a bonus, I guess.)

Oppose this move at every step of the way, because the British fellow is correct - you'll end up poorer, with no safety net to protect the most vulnerable in society. Alpo anyone?

[pacifictiger]

8. Now, would that be the

penision plan created during Maggie Thatcher administration? Reagan & GWHBush buddy?

[struggle4progress]

10. kick