Some Counties Opted Out of Social Security

AP ^ | 3/28/05 | Pam Easton

[red state girl]

GALVESTON, Texas Mar 28, 2005 — When county employees in Galveston learned 25 years ago that Social Security could be in trouble, they took a gamble on their retirement and opted out of the federal system.

Ray Holbrook, a retired county judge who promoted the alternative to Social Security in 1980, acknowledged he didn't hit the jackpot with the private plan, which later was adopted in neighboring Brazoria and Matagorda counties.

But Holbrook and others maintain it is possible to retire more comfortably with their plan than with Social Security. Holbrook sees his county's plan, which allows workers to invest a portion of their income in annuities and bonds, as a model for the privatization of Social Security.

As President Bush travels the country trying to sell voters on his proposal to allow younger workers to invest some of their Social Security payroll taxes in the stock market, about 5 million Americans in government jobs already rely on retirement plans other than Social Security.

Some swear by those plans. Others question their value.

The three Texas counties are among a small number of state and local governments around the country that opted out of Social Security for government employees or never joined up at all, like Massachusetts and Ohio.

The Galveston plan operates something like a 401(k): County employees in Galveston contribute 6.2 percent of their salary to the plan, with the county matching that amount plus as much as one additional percentage point. A private firm manages the employees' accounts and picks the annuities and bonds, which generally are not as risky as stocks. The plan also provides disability and life insurance.

Richard Gornto, president of First Financial Benefits Inc., which administers and designed the Galveston plan, estimates his plan offers an employee who works 37 years at an average of $25,596 a year a monthly benefit of $1,250, versus $669 from Social Security. An employee who worked the same amount of time, but earned $75,000, would get $3,663 a month, compared with $1,301 on Social Security, he said.

[SittinYonder]

This seems like an opportunity to give some real comparisons between a private plan and Social Security, but only hypothetical numbers are given. That suggests to me the private plan must have killed Social Security in returns.

[Mortikhi]

Now why can government employees OPT OUT of Social Security, but I, as a private citizen, cannot?!

I would happily let the government keep all the money they've taken from me and sign whatever stating that I can't draw SS when I retire if they would stop stealing from my paycheck.

Who can I harass in D.C. to let me do that?

[Nitro]

Social security is the thing.......

Once, there was a thing called a pension and notice only Government people have that now!!

Civilians are screwed, blued and tatooed........

we get nothing, unless each and eveyone of us are elected in the years we have left......

America used to be great, now it sucks unless you are rich!!