Examining the Logistics of Private Retirement Accounts
August 23, 2001
Establishing private retirement accounts to complement Social Security is logistically feasible, according to Roger Mehle, executive director of the Federal Retirement Thrift Investment Board. The board administers the government's investment retirement program for federal employees.
Mehle's assessment came in discussions yesterday with President Bush's Commission to Strengthen Social Security.
- The board oversees the government's $100 billion, 401(k)-style retirement plan for more than 2.5 million federal employees.
- In addition, it will be opened to 2.7 million military employees in October.
- Mehle said the biggest challenge to creating private Social Security savings accounts will be managing the information.
His views about the feasibility of managing a private pension program under Social Security were echoed by James Wolf, executive vice president of the 3 million-participant Teachers Retirement Insurance and Annuity Association-College Retirement Equities Fund (TRIAA-CREF).
Both men said their funds had shown solid gains for participants throughout their history.
Wolf said his plan receives an average of three calls per participant per year -- with automated systems capable of handling two of the three. The remaining call, which requires human assistance to answer questions, costs an average of $10 each.
Source: Stephen Dinan, "Private Social Security Logistics Eyed," Washington Times, August 23, 2001.
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