EBRI Notes

"Small Employer Survey on Individual Social Security Account Administration"

Apr 1, 1999 12  pages


Small Employer Survey on Individual Social Security Account Administration—President Clinton's proposed USA accounts would be funded partially through rebates to workers, using the projected federal budget surpluses. But not all of the money would come from the government: further funding on a voluntary basis would come from other sources.

One option would be payroll deduction, the funding method envisioned by most other proponents of universal individual account initiatives in recent years. When the White House provides more details of its USA proposal, the design may be similar to that of previously proposed individual Social Security accounts. The latter would require payroll deductions and, in the process, obligate employers to act as liaisons between workers and investment provider(s) in terms of sending account contributions and/or communicating workers' investment decisions.

Options for administering these accounts range from designs that would closely mimic 401(k) plan administration to others that would continue to use today's payroll tax deposit and wage reporting system for all Social Security contributions.

This article presents the results of the 1998 survey of 500 small businesses on their attitudes about possible administrative scenarios. The survey was commissioned by the Employee Benefit Research Institute (EBRI)and conducted by Mathew Greenwald & Associates.