Presidential Candidate Fred Thompson Pushes For Personal Accounts For Retirees

Washington (AHN) - Republican presidential candidate Fred Thompson proposed Friday to reduce promised retirement benefits and to create a system of voluntary personal retirement accounts that can also help to finance the Social Security program.

Under the proposal, retirement benefits for workers who are now 58 and older will not be affected. Employees who are now younger will get smaller monthly Social Security pensions because their benefits will be calculated based on the yearly increase in prices.

Meanwhile, the personal retirement accounts will be funded with workers' contributions to be matched by funds from the Social Security trust fund.

Workers can contribute 2 percent of their salary into their own account. The government will match the first $20 in monthly individual contributions with $50 from the Social Security Trust Funds. Succeeding contributions will be matched 50 cents on the dollar.

Distributed written material on the plan said, "The money belongs to the worker. It could be withdrawn at the worker's discretion after age 62 and used for any purpose, or left in the account to continue growing."

According to Thompson, the creation of personal accounts will stimulate the economy and provide increased tax revenue. The Treasury can then make a payment each year back to the Social Security trust fund to recoup the program's reserves.

Thompson said, "If somebody's got a better idea let them put it on the table."