Is It Weird How Some Public Pensions Are Privatized But Social Security Isn’t?

I know in some of the public pensions like OPERS and STRS…..
members are given 3 options:
1. traditional pension
2. combined plan
3. member-directed plan
(option 1 & 2 come with health benefits similar to medicare…..options #3 is like a “voucher” for health expenses)……………
Why should public pensions be privatized but not social security?
(maybe some say the logic is – public pensions are larger in size and therefore – if they make poor investment decisions they would still have a good chunk left over. Cause they pay 10% into their public pension and get matches 14% which is a much larger scale than FICA which is normally 7% although right now it’s just 5%.)
Share your thoughts.

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15 Responses to “Is It Weird How Some Public Pensions Are Privatized But Social Security Isn’t?”

  1. Edward says:

    Politicians could not borrow the money if it was invested.

  2. Brown951 says:

    Since it is quite possible for the government to manipulate the markets, privatizing the SS fund would lead eventually lead to accusations (at the very least) of conflict of interest.

  3. bigvossm says:

    Yes but according to Jamie Dimon, there are nearly $ 4 trillion in unfunded pension coming due. JP Morgan couldn’t come anywhere near earning 8% investment return they were depending on
    However most 401K/IRA’s will allow you to invest in the exact same government bonds the SS trust fund is invested in. Safe, but very little interest.

  4. Dave87gn says:

    Not weird at all..SS is NOT a pension or retirement plan….that is what conservatives never understand

  5. Bomb Yo Kang says:

    George W Bush wanted to but was denied by Pelosi. In Galveston county they do have privatized social security and it is doing fairly well for itself. No complaints from residents.

  6. Gary Irish says:

    Sounds great, but my company wiped out all pension plans for all 12,000 employees, even the ones who had been there 60 years. So according to your logic, make it private, to where the private people would cut it out and end it at some point.
    The new trend is that the Fortune 500 are dismantling or freezing their programs, so to privatize it now would be pretty much retiring it all together.
    And BTW, I had about $50k in my pension until they cashed it out, and said no more. Are you really sure you want your government money done the same way in the future.

  7. RockIt says:

    Public pensions are the big lie.
    100s of trillions in obligations that can NEVER be paid.

  8. Brian B says:

    SS isn’t a pension.

  9. Di says:

    My thoughts are that if a person pays say, sixty grand into SS over their working lifetime and, their employer has contributed a like amount for that employee, then clearly the money has been required to be deducted by government mandate and put in the pot. However, the downside is many administrations have “borrowed” from SS which is the first problem.
    So, I would like the government to provide me with a plan, to put the 120 grand into a retirement account that I manage and decide on the outcome. By doing so, I am relieving the government of their responsiblity to “oversee” my contributions and the outcome is on me.
    Some say that Social Security is a government Ponzi Scheme, which I agree with and which is why something definitive needs to be done to protect the money that US workers have paid in and therefore have every right to expect to receive at the appropriate time. That many call SS a form of entitlement is incorrect in some cases, as the government forced my employers to take that money out of my pay check, therefore it is mine.

  10. Mary says:

    You ask . “Why should public pensions be privatized but not social security?”
    Obviously you were not one of the MILLIONS who saw their LIFE SAVINGS vaporize as a result of PRIVATIZED pensions.You are not one of the millions who now are trying to pick up the pieces of destroyed lives and families .You are not one of thousands who are coping with the suicide of a loved one who committed suicide as a result of the loses of a lifetime of savings .
    If you want to hand control of your life(income) to a bunch of proven greed driven Wall Street carperbaggars go for it but leave my government socialized pension rhe hell alone where it is SAFE !!
    Go play “Russian Roulette” with YOUR life ,not mine .

  11. cosmo says:

    Why? Because state and local governments do not control the currency, and therefore must (in the long run) have balanced budgets.
    The Federal government does control the currency. It is therefore economically optimal to run a (reasonable level of) debt, and make up the difference by the (economically necessary) increase in the money supply. A government entity that controls the money supply can and should incur an ongoing, eternal (but not too large) level of debt.

  12. Revealin says:

    you didnt build that

  13. Gregory says:

    It won’t fly with Democrats because private accounts (unless somehow modified) are not progressive in nature. While there is a flat tax of 6.2% (up to whatever the treshold is..$106K?) on SS the return is much better for those who are poor. That not to mention that SS willl end up being tax free for the poor while being taxable for the non-poor.
    Edit: As to seeing ones life savings vaporize…reality is that they didn’t for most Government Employees (TSP is a private account for them). Hell, even my wifes mutual fund (which lost a lot of money) is now ABOVE what it was before the economy tanked (and she didn’t add anything else to it).

  14. Flower says:

    Public pensions for government and municipal employees are managed by professional fund managers and investors. Pensions dont pay out all the types of benefits that Social Security does because it is insurance, not an investment. You cannot get any of your pension until you retire, whereas Social Security pays benefits out for disabiity, divorce, death, and retirement.

  15. S O says:

    Social Security is not a pension, so no, this makes perfect sense.
    Hope that helps.

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