The Ryan-Sununu bill's model is the federal Thrift Savings Plan used by millions who work for the federal government.
These accounts would have proper safeguards, just as the federal Thrift Savings Plan does for millions of federal employees.
These would have proper safeguards on diversification, just as the federal Thrift Savings Plan that covers 3.9 million people has.
The mostly parallel Thrift Savings Plan retirement system for federal employees has similarly worked spectacularly well now for nearly 30 years.
Senator Joseph Lieberman is expected shortly to introduce legislation that will offer federal employees a terror-free investment option in their Thrift Savings Plan.
The model for this is the federal Thrift Savings Plan, in which government workers can choose from a half-dozen funds ranging from all bonds to all equities.
In the analogous Thrift Savings Plan (TSP) for federal workers, 3 of the 6 investment accounts among which workers can choose suffered deep losses during the financial crisis.
FORBES: Social Security Personal Accounts And The Financial Crisis
Baker points out that private mutual funds, on average, charge much higher fees (as a percentage of assets under management) than the costs of the Thrift Savings Plan the federal government makes available to federal employees.
This would also be very much like the highly successful private retirement investment systems used for the federal employee Thrift Savings Plan and for the private alternative to Social Security used for local government workers in Galveston, Texas.
The model for personal accounts would be the federal Thrift Savings Plan. (Millions of federal workers currently get their choice of well-diversified funds that are regulated for safety and soundness.) Participants could avoid the equity markets altogether by opting for government bond funds and bank CDs.
Thanks to her courageous and visionary leadership, a model has been created that should be followed by every public pension fund in the country - starting with the many-billion dollar Federal Thrift Savings Plan for which all executive branch, congressional and other federal government employees are eligible.
The worker would invest the personal account funds by choosing from a range of privately managed investment funds, just as with the Federal Thrift Savings Plan for federal employees, or the Social Security personal account system adopted 30 years ago in Chile that has operated with such great success for the workers of that nation.
FORBES: Social Security Personal Accounts Are A Path To Prosperity
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