For Immediate Release
Office of the Press Secretary
April 26, 2005
Fact Sheet: Millions Enjoy Ownership and Control Outside of Social Security
Today's Presidential Action
- Today, President Bush Visited Galveston, Texas To Meet With Local
Public Employees Who Are Saving For Their Retirement Outside Of Social
Security In Personal Accounts. The President has called for allowing
younger Americans the option of safely investing a portion of their
payroll taxes in voluntary personal accounts that they own and control
within the Social Security system.
Background: Five Million People Nationwide Are Outside Of Social
- All Full-Time Galveston Public Employees Are Saving For Their
Retirement Outside Of The Social Security System. Across Texas,
forty-nine percent of all state and local public employees are exempt
from Social Security and participate in alternate retirement systems.
- Galveston's Alternate Retirement System Features Personal Accounts.
All full-time public employees of Galveston County, including elected
officials, pay into personal accounts instead of the Social Security
system. Galveston County, along with nearby Brazoria and Matagorda
Counties, opted out of Social Security in the early 1980s. Millions of
other state and local public employees nationwide participate in plans
outside the system.
- Exempt Workers Also Have Ownership And Control. Galveston public
employees have ownership of their retirement income, which means they
can pass on their nest eggs to their children and do not face the risk
that the government will decide to cut their benefits.
- Galveston Public Employees Enjoy Higher Rates of Return.
Participants in Galveston's alternate system enjoy higher rates of
return on their contributions than they would under Social Security and
a minimum guaranteed rate of return.
- Millions Of Americans Already Have Retirement Plans Outside Of
- Many State And Local Public Employees Are Saving For Retirement
Outside Of Social Security. There are approximately five million state
and local public employees who are exempt from Social Security. They
live in every state and participate in alternative retirement plans
that offer additional opportunities to build savings for their
retirement, including higher rates of return and greater flexibility.
- Federal Employees Were Exempt From Social Security Before Laws
Changed. Prior to 1984, federal employees, including the President,
Vice President, and members of Congress, were not required to pay
Social Security payroll taxes.
- Federal Employees Already Have Voluntary Personal Accounts In
Addition To Social Security. People who work for the federal
government have the option of investing a portion of their income in a
Thrift Savings Plan (TSP), which offers a conservative mix of bonds and
stocks. The federal government offers this plan because it recognizes
the benefits of voluntary personal accounts.
- The President Has Laid Out Basic Principles That Must Guide
- No Changes For Those Born Before 1950. Those who are at or nearing
retirement will see no changes to their Social Security benefits, but
they too want to see the system strengthened for their children and
grandchildren. The President welcomes the wisdom of seniors and their
input on how to save Social Security for future generations.
- We Must Fix Social Security Permanently. The President wants to
fix Social Security once and for all, so that our children and
grandchildren do not face these same problems.
- No Increase In Payroll Tax Rates. Increasing the payroll tax rate
would burden workers and harm our economic strength.
- Voluntary Personal Retirement Accounts Are A Key Component Of
Reform. They would provide a nest egg to supplement the traditional
Social Security checks workers receive.
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