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Subject:  Re: Attitude Question - SS Date:  3/16/2016  9:10 AM
Author:  Hawkwin Number:  79379 of 97361

"I am especially concerned about (1) the transition period, (2) whether participation would be mandatory or optional, (3) the employers contribution, and (4) the tension between all-private PSA and guaranty of government minimum standard."

Good. Me too. Being open to options is a good start.

Are there any insurance products (as opposed to annuities) sold by insurance companies in the marketplace that guarantee a return of all premiums?

Ya, quite a few. Lots of life insurance policy variations, some long term care policies. I am not active in that industry like I used to be so I can't speak to what else there is out there but I would think a quick internet seach would answer your question. I think even some term with ROP exist now.

With respect to annuities, as I understand it, if one elects a return of premiums, then other payouts are less for the same dollars invested? In other words, as I understand it, if standardizing two annuities for the same payout, the one that also included return of premium would cost more?

I would assume so but I honestly don't know. The only ones (fixed annuity in this case) I have ever sold have a Return of Premium. I would assume that there are some out there that don't have that as a benefit and that may pay a higher rate due to such but I have no first hand knowledge of those. I do know that Single Premium Immediate Annuities do indeed pay a lower rate in general if you have some sort of installment or cash refund.

Given that this is only discussing SS tax, I assume that the 1.45% currently paid for Medicare is not under discussion and not part of the return on premium concept you are discussing. Correct? Or not?

Correct, as well as the portion that goes to SS disability. I would separate the SSDI portion from SS in general. I have no major objection to how it functions and I think it is good and worthy true insurance in general.

Are you counting the employer paid portion in calculating the return of premium? If yes, why? It is a cost of doing business to the employer but unless you have good reasons that I can understand, I am not willing to assume that employers would necessarily pay it to employees as wages.

In reverse order, I also would not assume that it would go out in wages but I am counting the employer paid portion. To do otherwise would create an imbalance with those that are self employed and paying both taxes. Also, if we are going to legislate employer-provided healthcare benefits to ensure that employees receive basic minimum coverage, then I see no objection to legislating employer-provided SS contributions to ensure that employees receive a minimum guarantee of compensation for such.

The more I think about it... I would even be OK if it wasn't a full 100% ROP (look at me being flexible! ;) ) just as long as there was a sufficient guarantee that is much higher than $0. Even if we told people that if they die early that 85% of their total SS contributions were eligible for beneficiary distributions, that would be a significant improvement.

Is it really so unreasonable to have a program that guarantees a minimum amount of gurranteed money?

If this money is really being invested in Treasuries at a rate of roughly 3%, then how can we justify not providing a minimum guarantee?

How will you price the survivor's benefits - spouse, ex-spouse and minor children that will be paid in determining whether a premium refund is due?

I would leave that up to the actuaries that have the raw data. I am sure there are many possible solutions and I remain open to all of them currently.

Will you continue to force such payments as tax collections? If not, how will you deal with the present consumption, save for future consumption, delayed gratification issues and Maslow's hierarchy of needs?

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