From: Richard Arsinow <richard.arsinow@rauland.com>
Subject: Safety Net
Bob Carlitz asked for viewpoints regarding the Safety Net.
If we stay with a defined benefit program (although I personally would prefer a system of individually owned accounts), I feel that there should be a Safety Net, or minimum retirement income. This minimum income should be as high as the program can practically afford to make it---more than just poverty level.
But---all benefits above the minimum must be strictly in proportion to contributions paid in. In other words, no more bend points, no more redistribution except to those whose calculated benefits would fall below the Safety Net. If Social Security can afford to replace 42% of AIME, let it replace 42% of everyone's AIME. This would be fairer and a lot easier to understand.
