My First Blog Entry Privitization of Social Security

Let me start by introducing myself. Wow, this is harder than I imagined. Anyway, I am by profession an attorney. I have chosen to stay at home with my 10 month old daughter this last year and done a little bit of work on the side. For example, I recently co-authored a paper for the Organization for Economic Cooperation and Development (OECD) comparing conflicts of interest inherent in the privatized pension systems of several countries. It can be viewed at:
http://www.oecd.org/dataoecd/38/37/34027482.pdf


What, might you ask, prompted me to take pen in hand and begin my life as a Blogger? I read an article today that stated Bush was moving to privatize social security.
Bush moves to privatize Social Security

I understand that our Social Security System needs reform. I have no problem with that, but my research has lead me to believe that individuals do not end up in a better position under a privatized pension system. The only people who seemed to benefit under these systems were the private companies managing these pension accounts. A billion dollar industry no doubt. The system was riddled with conflicts of interest as well. The only way around this was to have a highly regulated structure and when I say highly regulated I mean HIGHLY REGULATED. Why is that better than having a government run system? Enlighten me please?

Having audited 401k and Defined benefit pension plans for the last several years. I find myself disheartened that so many companies are moving away from defined benefit plans. These guarentee a monthly payment upon retirement after individuals have vested. I cannot for the life of me figure how people are so egotistical that they assume they can invest their money better than professionals. DB plans are required to meet certain actuarial standards with their investment strategies to insure that funds will be available to pay out retirees. There is a high amount of security in this system.