Group calls for higher retirement age
Posted at 6:51 a.m. PDT Tuesday, May 19, 1998
WASHINGTON (AP) -- A group of lawmakers, business leaders and
scholars is proposing a rescue plan for Social Security that would
include raising the retirement age to 70 and shifting some taxes into
personal accounts that workers could invest in the stock market.
''The question was, let's pretend we're all having to make a decision for
the country; what can we live with?'' said Dallas Salisbury, president of
the Employee Benefits Research Institute, a project participant.
The attempt to come up with a consensus on how best to solve the
cash shortfall expected when 77 million baby boomers become eligible
for Social Security benefits was convened by the private Center for
Strategic and International Studies and led by four members of
Congress.
Sens. Judd Gregg, R-N.H., and John Breaux, D-La., and Reps. Jim
Kolbe R-Ariz., and Charles Stenholm, D-Texas, have said they hope to
inspire a similar spirit of compromise among lawmakers.
Business executives also took part, including the chairman of Wall
Street investment firm Paine Webber Group Inc., Donald B. Marron;
IBM vice president Josephine Tsao; and Tupperware Corp. chief
executive Warren Batts.
Participants stressed that not everyone on the 24-person panel --
known as the National Commission on Retirement Policy -- supported
each component of the detailed plan to save Social Security, but all
agreed the total package was the best compromise they could reach.
Many Republicans and some moderate Democrats in Congress support
the idea of letting workers individually invest some Social Security
money on Wall Street. President Clinton has said he hasn't ruled it out.
Changes in Social Security must be approved by Congress and the
president.
The commission plan includes:
--Raising the age of eligibility for full Social Security benefits to age 70
for people born after 1969, and the early-retirement age at which partial
benefits are available to age 65 for those born after 1952. Currently, full
benefits start at age 65 and early benefits at 62; the thresholds are
rising gradually, however, so that anyone born after 1959 will have to
turn 67 before getting a full benefit.
--Shifting into personal retirement accounts 2 percentage points of the
12.4 percent currently deducted from workers wages and matched by
employers for Social Security. People would be able to choose to invest
their accounts in a variety of ways, such as in U.S. Treasury bonds or
corporate stocks.
Under the plan, everyone would still be guaranteed a Social Security
check in addition to a private account. That check would ensure no one
retires below the federal poverty level -- something not currently
promised by Social Security.
But depending on how well their personal investments do, some people
could end up with less retirement income than they would have
received under the current Social Security system.
Commission members predict their plan would keep Social Security out
of financial trouble without the need for higher taxes. However, if the
economy or other factors interfere, they would require Congress to find
a way to finance promised benefits.
The commission also called for changes in laws governing
employer-sponsored retirement plans, including making them more
portable when people change jobs.
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