The "Ohio" Plan

The President, April 15, 2005:

See, it's an interesting concept that the people of Ohio have put in place. And the government basically said, hey, why don't we trust people. After all it's their own money. Why don't we give them a chance to -- (applause.) But you just can't go -- there is a certain set of parameters, I presume, Scott, that -- just like there is for the federal employees, by the way. In other words, here's some options for you.

Some people think about whether or not people ought to be allowed to invest. They call it risky. I don't think it's risky to let people earn a better rate of return on their money, but obviously there's some parameters, there's some go-bys.

LA Times, April 16, 2005:

But that state's version of personal accounts has attracted few takers among the people eligible — Ohio's 750,000 public employees. And records show that the most widely chosen version of the state-offered accounts has racked up a five-year earning record of 1.86%, about the same return that the president says Social Security produces.

"Boy, does he have a hard sell ahead of him in using Ohio as his example," said Keith Brainard, research director of the National Assn. of State Retirement Directors, which represents virtually all of the nation's public employee pension plans.

"Ohio's individual account programs are only a few years old, and in the short time they've been around, investment returns have been relatively weak." Brainard said.