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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (631)	6/10/2005 6:54:51 PM
From: Peter Dierks	Read Replies (2) \| Respond to of 541479

My original DBlend idea: Use forced DC plans and pool a portion of retirement assets so that those who die young can help finance those who might otherwise outlive their assets. "I like it on the surface. Does your idea also contain a survivors payout benefit for a surviving spouse? Maybe a choice? A plan could offer a higher contribution for those employees who do not choose that option." My thinking is that there should be the element of individual ownership, and an element of shared ownership. You could do it a variety of ways. When I dragged my mother in law into her insurance agents office to discuss annuities, he offered 7 options from his preferred provider. It was confusing to her, and she never would have chosen the option she did if I had not urged her to get every last dime she could in monthly payments. She wanted to leave an estate. She hated the idea of dieing without getting her investment back in payouts. For my plan, I envision having a forced contribution instead of a transfer tax. The payout options would be limited to three, because that might tax the least capable of our citizens to understand; more could go from confusing to incomprehensible. Options are not fully thought through, so please offer suggestions and bear with my omissions and lack of vision. I currently envision the taxed portion over the contribution being used to fund an annuity with no options. Just a life payment based on life expectancy, and no refundibility, and no survivor benefit. This should be reduced during the life of the transfer tax payments by means testing. Option One: Annuitize with payout of unpaid amounts being paid as an estate of the decedent. There might be a few options for the recipient: take the cash; roll into their contribution account; fixed length annuity. Option Two: Annuitize over a fixed period with survivor benefits as above. Option Three: Maximum payout, no survivor benefits. This would be selected by persons with fewer years of earnings and or higher needs for income. Spousal benefits should be a factor, and to comply with pension benefit laws would require waiving by the spouse.