The life insurance industry is expressing concerns over one of the three options being considered by a Presidential panel aimed at shoring up the nations Social Security system.
The option at issue would give workers the choice of investing 1% of their wages above their current Social Security taxes in private accounts within the Social Security system.
The government would also give workers who decide to make that investment a 2.45% match from payroll taxes up to $1,000.
Terri Sorota, senior counsel with the American Council of Life Insurers, Washington, says the concern is that this option could interfere with existing private retirement programs, such as individual retirement accounts and 401(k) plans.
The 1% of wages at issue, she notes, would not come out of the Social Security system. Rather, she says, it is a voluntary contribution that could otherwise go to existing private vehicles.
The accounts established by this option, Sorota says, would be managed by Social Security.
“This is money we think should be available for existing retirement accounts,” Sorota says.