Edward Jones is airing a 33-minute video to its six million clients across the country that outlines President Bush's plan for Social Security reform, but the brokerage giant stops short of publicly endorsing a specific solution. Titled "The Future of Social Security," the video features panelists discussing reform options, including the hotly debated private accounts. Other options the panelists discuss are increasing taxes and raising the retirement age.
To stem an anticipated shortfall in Social Security benefits in the next couple of decades, President Bush has floated a proposal that would allow workers to contribute a portion of their earnings to private accounts, most likely mutual funds.
While the President hasn't offered a detailed plan and claims that all ideas to avert a potential shortfall are "on the table," Democrats and powerful organizations like the AARP and AFL-CIO say the 75-year-old pension isn't in trouble. They argue that allowing workers to invest in private accounts leaves their retirement money susceptible to the volatility of the stock markets, would require a changeover that's much too costly and would unduly profit Wall Street.
But the consensus in the financial community is that millions of private accounts would not deliver, at least initially, a windfall in fees to Wall Street brokers. Still, Edward Jones, Charles Schwab, Wachovia, Waddell & Reed and the Securities Industry Association reportedly have quietly supported the movement through contributions to the Alliance for Worker Retirement Security, a lobby group in favor of individual accounts.