Tuesday, December 26, 2006
PLUS: Senator Sessions makes a new bipartisn retirement proposal
Jeff Sessions, a Republican Senator from Alabama, has a provocative proposal “A Bipartisan Fix for Retirees” on page A25 of the December 26, 2006 issue of The Washington Post. Link:
Going forward, Senator Sessions wants to create a PLUS (Portable Lifelong Universal Savings Account) for every newborn baby at a certain point. During the person’s working life, 1% of each paycheck, matched by the employer, both pre-tax, would be deposited in the account, which could not be touched until age 65 (in comparison to 59-1/2 for today’s 401K’s). Parents and grandparents could contribute $5000 per year pre-tax.
A major feature of the program would be a $1000 starter deposit from the federal government at the birth of the newborn. This does sound like pro-natalism, a politically sensitive proposal in a time that many conservative writers are warning about the demographic skew and potential international instability caused by lower birth rates (below replacement) in affluent classes, and high birth rates in most underdeveloped countries. A hidden idea beneath this is, of course, “family values” as I have discussed the topic elsewhere.
Session says that his program would be motivated somewhat by the Thrift Savings Plan (TSP) for federal employees, that lets them invest a portion of each paycheck into a combination of six special accounts, with a partial employer match. This is in addition to social security contributions.
I last worked for the federal government from 1971-1972 (the Navy Department) when federal employees had their own retirement completely separate from social security
Picture: Saddle Mountain, from the sub-continental divide on US 50 near Mt. Storm, W Va.