MSI,
First of all, I want to say that I agree in your point in general, that Social Security is not a pension or insurance.
What are the terms of this disability insurance? Is there any actual accounting, or any guarantee of funds?
Well, theoretically, there should be as much assets on the books of this disability portion, that if the future payments stopped, there would be enough money to pay out to all current people on disability. So it is basically as unfunded as the rest of Social Security.
I don't know what the shortfall is, but I think it is not something that threatens bankruptcy of the country. My WAG is that the amount is in $100s billions, rather than $10s trillions of the pension portion.
How does the accounting of the private disability insurance work? Do they start with all the assets required, or do can they avoid owning all these assets and use probability theory of the actual need?
Joe |
