Social Security Reform:
Implementation Issues for Individual Accounts
HEHS-99-122, Jun 18, 1999
Pursuant to a congressional request, GAO provided information on social security reform, focusing on issues to consider regarding the design and implementation of an individual account system.
GAO noted that: (1) the social security system is one of the nation's most important and visible programs; (2) while individual accounts offer the possibility of an improved rate of return on individual contributions, a flawed or failed system of individual accounts could have devastating effects on individuals' retirement security and on public confidence in government overall; (3) in this context, GAO believes that three critical questions would need to be addressed in designing and implementing a system of individual accounts: (a) who would assume new administrative and recordkeeping responsibilities; (b) how much choice individuals would have in selecting and controlling their investment options; and (c) how much flexibility workers would have when they retire and begin to draw on their accounts; and (4) all of the decisions made regarding these critical questions would affect the design and structure of such a system, as well as who would bear any additional administrative responsibilities and costs.