Administrative Costs
- Pro
- Financial institutions stand to profit through the use of large investments . Some have promised to charge as low as 1 and even zero basis points. 1
- Con
- Private sector insurance companies and pension investment firms have administrative overhead averaging 40%, while SSA’s overhead costs are just under 1% of benefits. 2
1. Source: David E. Sanger, “Big Eye on the Markets”, New York Times, January 7, 1997.
2. Source: The White House Conference on Social Security- Statements from Participants. American Federation of Government Employees, AFL-CIO (AFGE). December 8-9, 1998.