Uncharted Waters : Paying Benefits from Individual Accounts in Federal Retirement Policy

This report considers some of the payout issues that might arise from implementing a system of individual accounts, if such accounts were to become a part of federal retirement policy. Why is it important to examine "payout" issues? Because a central goal of retirement security policy is to assure some level of adequate income, it is essential that any debate about creating individual accounts include a complete understanding of how the benefits will be received. How would the assets accumulated in individual accounts be paid out during retirement? Will individuals have funds available to them before retirement? What rights does a spouse or former spouse have to these accounts? Can creditors reach the accounts? What institutions - government or private - will be responsible for making payments from the accounts? If private institutions are responsible, will the federal or state governments regulate their conduct? If these new accounts are part of Social Security or integrated with Social Security reforms, what will happen to payouts of Social Security benefits?