RE: Civic equality in retirement?

[Richard Arsinow <richard.arsinow@rauland.com>]

One of the options which has been brought up, as Maureen West noted, is a universal benefit which would not be tied to work history.  She would require a minimum number of years as a citizen to qualify.  In practice, if that number were lower than 62-65 years, it would probably make sense to also add a minimum age requirement to receive the benefit.

It would not be fair, however, to raise funds for this by charging workers a percentage of their wages.  It would need to be funded by charging each eligible person the same amount each year.  Perhaps the IRS could collect it.

It would also not be fair, at benefit time, to deny the benefit to anyone who had paid in as required.  Thus, this truly universal benefit would not be subject to 'means testing'.

So, in a fair universal benefit system, each year you would pay in the same amount as every other person, and in retirement each month you would receive the same amount as every other person.

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Some questions might arise:

1. During some of my working years, I was laid off.  Do I still have to pay in while I'm laid off?

2. I took time out to be with my children.  Do I still have to pay in while I'm not working?

3. I'm an immigrant, a naturalized citizen.  I haven't been here my whole working career.  Am I ineligible?

Such a fair universal benefit program could be made flexible enough to handle cases like these.

*The pay-in amount could be indexed to inflation.  Then any year's payment could be considered equivalent to any other year's payment.

*If only 30 years' payments, for instance, were required to be eligible for the benefit, workers who were unemployed or deliberately took time off up to 25% of their careers would still be eligible.  Immigrants would be able to make double or triple payments in any years when they were able, in order to qualify in less than 30 years.  Of course, there is no magic in the number 30.  A lower minimum might be chosen, in which case the pay-in might be higher or the benefit lower.  A higher minimum might be chosen, which would allow for a lower pay-in or a higher benefit.

*Note that, after paying in for the requisite number of years, a person would be fully paid-up and guaranteed the benefit.  No further payments would be required.

*It might be made possible for one person, in addition to making his or her own payment, to make one on behalf of someone else.  Thus, a husband could make double payments while his wife stayed home with children.  Or, after he became fully paid-up, he could continue paying on his wife's behalf until she were also paid-up.

*Companies could offer annual pay-in as a bonus or as a benefit.

*States could pay-in on behalf of unemployed workers, as an expansion of unemployment benefits.

*If a person reached retirement age without completing the requisite number of years paid-in, the system might be set up to deduct the remaining payments from benefits or to refund all the money paid-in, adjusted for inflation.


Thank you for reading this far.  I hope you can see how a universal benefit system need not be financed by general revenues (welfare or entitlement) nor by a percentage tax on wages (which would charge some more than others for the same benefit), and how it can be fair and flexible and address some legitimate concerns of women and minorities (and men and non-minorities).