Guaranteed benefits would be cut by 40 percent or more. Even if privatized accounts were used to buy annuities, the total amount of benefits still would depend on stock market performance. Benefits can't run out. Today, guaranteed benefits are paid to 6 million disabled workers and dependents and 7 million survivors of workers who have died, in addition to 31 million retired workers and dependents. Benefit levels rise with prices over time to maintain purchasing power.
Some plans offer no protection against inflation.
If accounts are required to be paid out as inflation-adjusted annuities, there is protection. Administrative costs Less than 1 percent of benefits paid each year. Administrative costs for private insurance are 12 to 14 percent, based on estimates from the American Council on Life Insurance. Chile's costs are as high as 20 percent. These costs come directly out of benefits.