WASHINGTON—Key details of President Bush's proposal to create new personal investment accounts were disclosed Wednesday by senior administration officials briefing reporters at the White House. Highlights follow:
_Workers born after 1949 could divert 4 percent of their salary or about two-thirds of the 6.2 percent tax they now pay on wages up to $90,000 into the new accounts. Each account would be capped at $1,000 initially and would rise over time. Participation would be voluntary starting in 2009.
_Future traditional Social Security benefits would be cut for people enrolling in the new accounts to offset their switch to the new accounts.
_People born in 1949 or before would not be eligible to enroll in the new accounts. Social Security benefits promised to them will not change.
_Personal accounts would be modeled on the federal employees' Thrift Savings Plan, a pension program with low administrative costs, which offers only a handful of investment fund options, with varying degrees of risks.
_It will cost about $750 billion to pay transition costs to the new accounts between 2009-2015, the administration estimates. Social Security actuaries estimated that once it is fully in place, transition costs could total $2.2 trillion in the first decade and more after.
(c) 2005, Knight Ridder/Tribune Information Services.
Need to map