Alternative Social Security
by Ray Holbrook
Issue 216– November 28, 2012
In 1978 the Galveston County attorney. Bill Decker, saw that Social Security was going bankrupt very soon and the county should do something to protect our employees to the extent we could. He asked the Commissioners Court, 4 Commissioners and a County Judge, the administrative body of the county, if he could investigate an alternate plan for county employees as a substitute for Social Security.
We gave him the OK to explore it. At that time any governmental body could get out of SS with a 2 year notice. He asked for proposals from several consultants and finally found one in the private sector that would duplicate all the features of SS at the same cost to the county and the employee.
The Commissioners Court studied it very carefully and decided to ask the employees to vote on it. We held 5 employee meetings to explain the plan with SS officials having a say as well. Then in the fall of 1980 an election was held and the employees voted 3 to 1 to drop out of SS and adopt the Alternate Plan. Bill Decker had already given the SS Administration the required 2 year notice. So with that vote of all the employees we terminated SS and adopted the Alternate Plan on Jan 1, 1981.
It has proved extremely successful for over 30 years and is a model for the nation to adopt if the Congress had any guts. There is a retirement plan, a disability insurance program and life insurance on an employee in case of death. The insurance policies are both more than SS pays and the retirement is 2 to 3 times what SS pays if you have been with the county 20 years or more. There are 3 private insurance companies in the plan and all have been great to work with.
There is a lot more detail to the plan and there is a very interesting story surrounding the employee meetings and the election. As you can guess it was controversial and quite political but in the end everyone was on board. It is administrated by a consultant who put the plan together originally. It is also in Brazoria and Matagorda counties in Texas.
In 1983 the Congress closed the door on counties and cities getting out of SS. There were over 50 counties including Harris County [Houston] waiting to get out and their time ran out before the 2 year notice was in effect. No candidate for Congress or the Senate has said the Alternate Plan would be good for the country because they are afraid of the seniors. You saw how President George Bush cratered in his effort just to consider privatizing a part of each worker’s contribution to SS.
How about a bit of freedom? The Congress should once again allow each governmental unit to devise their own plan and get out of SS.
Ray Holbrook was Galveston County Judge, 1967-1995