I alluded to this in my earlier post. The sensible thing to do imo (and last I looked, the OMB's view) is to raise the cap significantly. I've always favored no cap because I cannot reconcile a cap of any kind with any sort of a sense of fair play. It is Social Security after all. Which implies that it is a fund for society's benefit. How can it be fair to have those who can afford to contribute to the fund the most, pay the least (as a percentage of their income) and have those who can afford to contribute to the fund the least, pay the most (as a percentage of their income). I haven't done the math, but if all income were subject to FICA taxes and there was no cap, I'm certain we could lower the rate significantly (thereby giving you your tax cut for lower incomes with all those related benefits) and simultaneously increase the total amounts going into the fund.

Why no one is suggesting this or something like it is beyond me.

Back when companies in this country felt they "owed something" to the workforce that made the owners wealthy. It was called a pension. Then, the 1980's happened and those funds were raided by the suits in the boardroom.

The really funny thing is how the 401K thing happened. Started out as a carve-out for two executives and then was leveraged as a replacement for companies fiduciary responsibility to their employees upon retirement.

My dad passed away last summer, but because he had a pension through TALB (Teachers Association of Long Beach) and took a lessor benefit, my mom gets 3K/month for the rest of her life. That's on top of the 20+ years my dad got that amount. You'd have had to have been a hell of a stock picker to come out that well with your 401K. There's no 401K anywhere that would have provided the return my folks got with their pension. Nor my brother-in-law's UAW pension.

First, we need to recognize that our current retirement programs, based on individual accounts such as 401(k) plans, are a failed experiment. Enacted during the late 1970s and early 1980s, we now have the experience of a generation to clearly demonstrate that individual investors do not have the skills, time or interest to properly mange their retirement investment portfolios. Indeed, a study by the National Institute on Retirement Security found that professionally managed pensions can deliver the same level of retirement benefits at half the cost of a 401(k)-style plan. This means we must investigate policy options that combine the portability features of 401(k) plans with the professional investment management, long terms asset growth strategies, shared risk and guaranteed income streams that make traditional pension plans so efficient.

http://www.afscme.or...d-401k-experiment

401K's didn't work for Nebraska.
Emphasis Mine.

HEDRICK SMITH: But in my travels, i had found evidence that it may not be just a question of time. Back at that workshop in Nebraska, I had learned that Nebraska had 40 years of experience with a 401(k)-style defined contribution plan for state employees.

Nebraska is a unique laboratory. For 40 years, it has run two different kinds of retirement plans side by side, some employees,covered by the traditional lifetime pensions, others by a 401(k)-style defined contribution plan. Both were top-notch plans, with mandatory participation and contribution levels, and a 7 percent employer match. But the state was still concerned.

ANNA SULLIVAN, Dir., Neb. Retirement System: The state legislature commissioned what is called a benefit adequacy study. They wanted to have a consultant look at all of the plans and determine the adequacy of the benefit that the state was providing.

HEDRICK SMITH: The study showed that lifetime pension plans, with professionally managed investments, did far better for employees than the 401(k)-style defined contribution plan.

ANNA SULLIVAN: We've had experience since the mid-60s, and the people retiring from our defined contribution plan do not have the kind of an account balance­ which is basically what a defined contribution plan gives them, an account balance­ it isn't sufficient for them to live on in retirement. It's just not adequate.

HEDRICK SMITH: [on camera] Forty years hasn't done the trick. It's not a matter of time.

ANNA SULLIVAN: I don't believe it's a matter of time. I believe it's a matter of understanding what it takes for the employee to take a hold of this and utilize it and earn the kind of return that they need to have. You're talking people who are not investment professionals.

HEDRICK SMITH: [voice-over] After the study, Nebraska ended its 401(k)-style plan for new employees and allowed old 401(k) participants to shift to the lifetime pension plan.

http://www.pbs.org/w...t/etc/script.html

Lucky them.

I'd favor government pensions - an extension of Social Security if you will. Allow professional gamblers (nay Financial Professionals) to handle this fund. It would follow you. The plain fact of the matter is that the 401(k) system is a complete and utter failure. It in no way compares with the pension plans of old. But I agree that the pension plans of old cannot be trusted to private enterprise for the reasons we've already listed here. I say, take the monies we are currently blowing on the Wall Street 401(k) fund managers and put it into a government fund with our names attached (much like Social Security). Let the managers work with this enormous pool of money - who knows? There might even be some legitimate investment coming out of this instead of the 30 year established Casino Capitalism of Wall Street.

Even now, if the companies you worked for had pension plans, you wouldn't be completely without income. True, you would not have fared as well as the limited number of folks whose pensions were not raided, but you'd be getting at least something. What if your 401k was handled by somebody like Lehman? Or Bear-Stearns? And lest we forget, the remaining investment banksters are only still alive because of taxpayer money.

In this much I think we can agree: pension funds will always be too juicy to trust to the greedy capitalist money class. They must be handled by genuine representatives of the people. Put another way (and here we may differ) given the choice between the two, I'd put the government in charge of my money far and away over Wall Street.