THE PRIVATE ACCOUNT BUREAUCRACY….One thing I’ve been waiting for is for someone to estimate just how much the administration of private accounts would cost. I don’t mean management fees, I mean the additional federal bureaucracy and cost to businesses of setting them up in the first place.
No one has taken a comprehensive look at this yet, but Greg Anrig at The Century Foundation has taken the first step. Based on congressional testimony from the former head of the Thrift Savings Plan, it looks like it would cost around half a billion dollars just for telephone support of the accounts, and small businesses would have to cough up about $300 per employee in administrative costs.
Of course, this is just a drop in the bucket. The full cost of administering a new bureaucracy to handle this stuff would be quite a bit higher. I’m sure someone will put together an estimate soon.