NU Online News Service, March 31, 2004, 5:50 p.m. EST – The efficiency of Social Security privatization efforts could have a big effect on participants' account balances at retirement.[@@]
Several existing pension administration systems studied could eat up as little as 2% of the participants' assets or as much as 30% of the assets, according to a Congressional Budget Office report released earlier this month.
Ben Page, an analyst in the CBO's macroeconomic analysis division, led a team of authors that compared estimated administrative costs for the current Social Security system, federal employees' Thrift Savings Plan, mutual funds, and large and small private defined contribution plans.
The cost of running the program and distributing benefit payments appears to be lowest for Social Security, Page writes.
Page estimates Social Security costs only $11 per participant per year. If Social Security were a private pension plan and participants had to pay the $11 annual cost, the cost would reduce final assets at retirement only 2%, Page writes.
