- The Washington Times - Thursday, August 23, 2001

The biggest challenge to creating private Social Security savings accounts will be managing the information, the director of the government's investment retirement program for federal employees told President Bush's Social Security commission yesterday.

"To develop a record-keeping system for [the Thrift Savings Plan] was the biggest central challenge that we had," said Roger Mehle, executive director of the Federal Retirement Thrift Investment Board.

The board oversees the government's 401(k)-style retirement plan for employees established in 1986, a $100 billion fund with more than 2.5 million participants. It will be opened to 2.7 million military employees in October.

Mr. Mehle's experience and that of James Wolf, executive vice president of the 3 million-participant Teachers Retirement Insurance and Annuity Association-College Retirement Equities Fund, were touted as evidence that private savings accounts are feasible as part of Social Security.

The president's Commission to Strengthen Social Security has been given the task of revamping the New Deal-era safety-net program, and has indicated it will include private savings accounts in its plan. The commission has said the program will begin running a deficit in 15 years when baby boomers retire and the ratio of workers paying into the system to the number of retirees receiving benefits drops.

Both Mr. Wolf's and Mr. Mehle's plans have shown solid gains for participants throughout their history, the two men said, though they didn't endorse or oppose the idea of private savings accounts. Instead, both men talked about the logistical issues they faced, and commission members were interested in the overhead costs associated with the two programs.

Mr. Wolf's program receives an average three calls per participant per year — two of every three calls can be handled by automated systems, but the third requires a person to answer questions. Those calls cost an average of $10 each, Mr. Wolf said.

The commission met amidst a whirl of news about the commission and Social Security's future.

The Office of Management and Budget said the budget surplus for the fiscal year ending Sept. 30 will be $90 billion below previous estimates, and the Congressional Research Service released a report saying private accounts could force benefit cuts or require that the retirement age be raised.

The commission's co-chairmen, former Democratic Sen. Daniel Patrick Moynihan of New York and Richard Parsons, chief executive officer of AOL-Time Warner Inc., said they have explored benefit cuts but are still looking at the various options and haven't committed to anything. They also said the budget surplus news doesn't affect them because their time frame is in decades, not the short term.

As a backdrop yesterday, groups favoring and opposing private investment plans held dueling news conferences in the hotel where the commission convened.

At the same time, commission members were meeting in two closed subcommittees — prompting complaints from Democrats and open-government advocate group Common Cause, which said closed meetings violate rules set out for federal advisory commissions.


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