The Personal Security Account 2000 Plan, Market Outcomes, and Risk

Edited by Sylvester J. Schieber and John B. Shoven

in Themes in the Economics of Aging

Published by University of Chicago Press

Published in print November 2001 | ISBN: 9780226902845
Published online February 2013 | e-ISBN: 9780226903330 | DOI:
The Personal Security Account 2000 Plan, Market Outcomes, and Risk

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This chapter presents a framework for assessing Social Security reform proposals by evaluating a specific reform plan. This plan is one derived from the original personal security account (PSA) plan developed by the 1994–96 Advisory Council on Social Security (Advisory Council 1997). Dubbed as PSA 2000, the plan was developed, in part, to respond to some of the criticisms of the original PSA plan. The chapter is organized as follows. Section 2.2 outlines a set of principles around which the plan was devised. Section 2.3 develops the proposal and the underlying principles. Section 2.4 evaluates the long-term actuarial prospects of the proposal. Section 2.5 assesses the benefits that would be provided under the plan and the risks that individuals would bear with such a partial privatization approach. The final section takes measure of the plan against the principles laid out in Section 2.2. A commentary is also included at the end of the chapter.

Keywords: Social Security reform; PSA plan; privatization; personal security account

Chapter.  12453 words.  Illustrated.

Subjects: Economics

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