Retirement Plan A Success

By JAMES (PETE) CONROY, Mason City

The other evening, I had my dinner disturbed by one of those unsolicited phone calls. This one was a recorded message from AFSCEM (Association of Federal State and County Employees). It explained to me the horrors of the (personal savings account) legislation that is being considered in the modernization of the existing Social Security program.

I listened to the whole pitch and when it was finished, I went back to my dinner. While I was finishing up the no- longer-warm cheese ravioli, I pondered with amusement the thought of the AFSCEM pitch being made to the municipal employees of Galveston County, Texas.

In 1980, 72 percent of the employees opted out of Social Security and approved creation of a privately funded retirement plan that also included life insurance and disability components similar to Social Security. Brazoria and Matagorda counties joined the Galveston Plan over the next two years. (Congress closed this option in 1983.)

The Galveston plan has been a success. Since 1981, more than 5,000 retirees in the three counties have enjoyed market retirement yields averaging 7.5 percent compared to less than 2 percent under Social Security.

A worker under this plan will receive 90 percent of his pre-retirement income as opposed to 35 percent of pre-retirement income under Social Security.

These retirement accounts (personal) are used to purchase commercial banking and life insurance products such as certificates of deposit and annuities as well as conservative government and commercial bonds. With this 25-year-old example for the public to compare with the AFSCEM horror story I listened to, I had to laugh, even though my raviolis were cold.

Just another letter to the editor from someone who gets it...