As you know, my husband works for the federal government, and due to his hiring date is in FERS, which has the combination of Social Security and the Thrift Savings Plan (similar to a 401K).
This was adopted circa 1983 as a replacement for the CSRS, which was more like a defined benefit pension plan.
The Thrift Savings Plan is administered by OPM, and you can't just pull your money out of it, as you can out of a 401K. I know, I know, you have to pay a penalty if you take your money out of your IRA or your 401K (unless it's for a purpose deemed appropriate by statute), but other than that, nobody stops you. You can just order your fiduciary to cut you a check and they do it. Been there, done that, paid the consequences.
But you can't do that with the Thrift Savings Plan. You can't take the money out unless it's for an approved reason, and you have to pay it back.
Also, OPM has a limited list of investments that you can use for your Thrift Savings Plan money, basically several mutual funds, including a bond fund, a money market fund, and several stock funds.
So it seems to me that there is a possible compromise on Social Security privatization -- let someone like OPM manage the funds with the same type of restrictions and oversight. I suppose it would be a bonanza for well-heeled mutual fund companies and big money managers if it went totally private, or there could be a government agency. |
