The Porter ISSRA plan includes the following provisions -

1. No changes in benefits for current retirees

2. Workers may choose a new voluntary private investment account (ISSRA) option similar to Individual Retirement Accounts (IRAs) or 401(k) plans to replace traditional social security.

• ISSRAs will be funded by diverting 5% of the current 6.2% earnings tax contributed by both workers and employers resulting in a 10% total ISSRA contribution.
• the remaining 1.2% tax on both workers and employers will be paid into the Social Security Trust Fund for 10 years after the worker opted out of traditional Social Security. After this period, neither worker nor employer will be required to pay this tax, resulting in a net tax cut.
• additional contributions up to a maximum 20% of gross income are allowed
• workers can opt to remain in the current system

3. A portion of the ISSRA account contribution will be used to purchase private disability and life insurance policies covering at least the same individuals at the same levels as the current SS program.

4. IRA-like regulations will govern ISSRA accounts, except that -

• no withdrawals will be allowed prior to retirement
• workers will be allowed to choose among government approved trustees, such as a bank, an insurance company, or a private investment company, and may change trustees on short notice
• trustees will be criminally and civilly liable to invest and administer the account according to law
• accounts will be government insured

5. Taxation of ISSRAs -

• employee contributions to ISSRA accounts will not decrease their taxable income
• employer contributions will be deductible as a business expense
• inside build-up of accounts will be tax deferred, until withdrawn, like current IRAs
• the portion of retirement benefits due to employer contributions will be taxed, while the portion of benefits due to employee contributions will be tax-free.

6. At retirement age (59-1/2), workers may use ISSRA funds to purchase an annuity or to finance regular periodic withdrawals. During retirement, fully funded ISSRA accounts must maintain the funds necessary to finance the beneficiary's minimum retirement benefit.

7. In recognition of Social Security taxes already paid, Recognition Bonds will be issued by the Treasury to those workers who opt to form ISSRAs -

• issued in amounts proportionate to lifetime Social Security taxes already paid
• redeemable at retirement to finance monthly benefit payments

8. The federal government would guarantee a minimum ISSRA retirement benefit. If an individual's account failed to have adequate resources to accommodate a minimum benefit, the shortfall would be financed from general revenues, thereby removing the risk of lost retirement benefits due to market fluctuations. This guaranteed minimum benefit will be the equal to the lesser of 40% of average pre-retirement income or 95% of expected SS retirement benefits.

9. The amount of money remaining in a beneficiary's account will become a portion their estate.

10. For future retirees who choose to remain in the traditional Social Security system -

• as under current law, retirement age will increase to age 66 in 2005, and then to age 70 by 2028.
• early retirement at age 62 with a minimum benefit will still be available
• wage indexing of benefits will be replaced by price indexing