If the investment continues to do wonderfully, there will be the advantage of that for all employers, and if the contributions for the defined benefit plan drop, they drop the same amount for the contribution plan. Senator Patterson said he had heard about plans that did not support their retirees, and thought that most contribution plans had been in operation for a long time, and if federally qualified investments were used, the plans apparently did well. He wondered what the record was. Mr. Ferrara said overall, the record is quite good. He felt giving people control over their money was a good idea.
Experience shows that people can handle their money.
He felt that the most important thing was to structure the system to avoid problems. He said these types of plans work in countries around the world. Senator Bundgaard asked about the plans in some of those other countries. Mr. Ferrara said there were countries where the social security was in question and that people were being allowed to opt out and invest in their own plans. He said Chile was the first to offer such a plan, and there are seven Latin American countries which now offer those plans.