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MINNESOTA EXECUTIVES LACK CONFIDENCE IN HEALTH OF SOCIAL SECURITY, ACCORDING TO GRANT THORNTON STUDY

 MINNEAPOLIS, Feb. 8 /PRNewswire/ -- Few of Minnesota's middle-market employers say the nation's Social Security system is financially very healthy, and many contend that American workers should be able to drop out of the system entirely.
 These are the principal findings of a recent Grant Thornton survey of 121 local executives serving organizations with 1,000 or fewer employees.
 The survey shows that only 7 percent consider the Social Security system to be very healthy. Another 53 percent describe the program as somewhat healthy, while 40 percent say it is not healthy at all.
 Two-thirds of the executives surveyed say Social Security will not be able to provide an adequate income supplement for their personal retirement. Half say Americans should have the option of bypassing the system completely.
 Local findings are consistent with Grant Thornton's national survey of 1,469 companies in which 10 percent consider Social Security to be very healthy. Once again, more than half of all respondents say that Americans should be allowed to withdraw from Social Security.
 "Although Congress amended the Social Security Act in 1983 to ensure its solvency into the 21st century, Americans are losing faith in the system. Few believe the thousands of dollars they contributed over their working years will be available to them when they retire," said Ben Horak, a partner and head of the tax department for the Grant Thornton office here.
 "It has long been believed that an individual's sound retirement plan hinges on three sources for income: Social Security, employer pension and personal savings. Executives now believe that individuals and businesses ultimately will have to play a greater role to provide for adequate retirement," said Horak.
 The Grant Thornton survey also reveals the following:
 -- To increase Social Security revenues and preserve funds, 36 percent of Minnesota executives say the U.S. government should increase the ceilings on taxable wages. Another 22 percent advocate raising the present Social Security rate.
 Currently, individuals and their employers each pay 7.65 percent, with 6.20 percent of wages (up to the $57,600 ceiling) for Social Security and 1.45 percent of earnings (up to $135,000) for Medicare.
 -- Only 16 percent of the local respondents recommend increasing the age at which benefits are payable.
 -- Among those local executives who say Americans should be able to drop out of Social Security completely, 69 percent believe individuals who secede from the program must be required to channel funds into an alternative, private retirement plan.
 "Years from now it will serve no one if individuals who withdrew from Social Security made little or no provision for their personal retirement," said Horak. "But given the strong perception among U.S. executives that the current system may not survive until they retire, many would prefer to invest their future Social Security contributions into a retirement program that they personally monitor.
 "Although the ability to invest this money into a separate plan could provide a better retirement supplement, those individuals who pull out of Social Security risk losing the system's other benefits, such as disability, death and family support," Horak added.
 To gauge executives' attitudes about Social Security and retirement planning, Grant Thornton mailed questionnaires to 10,000 executives in October 1992. The response rate is just under 15 percent.
 Grant Thornton provides tax, accounting, audit, management consulting and employee benefits services to companies throughout the United States. Worldwide, clients are served through Grant Thornton International, an organization of leading accounting firms in more than 60 countries.
 The following are questions and answers from Grant Thornton's survey of midsized businesses, "Can Americans Still Afford to Retire?" which was mailed to 10,000 U.S. organizations in October 1992. Grant Thornton received 1,469 total responses, including 121 from Minnesota.
 From a financial standpoint, how healthy is the U.S. Social Security
 retirement system?
 Minnesota United States
 (percent)
 Very healthy 7 10
 Somewhat healthy 53 49
 Not healthy at all 40 40
 Don't know 0 1
 Do you believe the Social Security system will be able to provide an
 adequate retirement supplement when it's your turn to retire?
 Minnesota United States
 (percent)
 Yes 32 31
 No 68 68
 Don't know 0 1
 If it should become necessary to increase revenues to fund the
 Social Security system, which ONE of the following methods do you
 think would be best? (Check only one.)
 Minnesota United States
 (percent)
 Increase the ceiling on taxable
 wages so that people with higher
 incomes pay more Social Security 36 34
 Increase the Social Security rate
 so that everyone pays more 22 23
 Increase the age at which
 retirement benefits are payable 16 16
 Other 24 23
 Don't know 2 4
 Should people be able to "drop out" of the Social Security system
 altogether?
 Minnesota United States
 (percent)
 Yes 53 52
 No 46 47
 Don't know 1 1
 If so, should those who choose to drop out of Social Security be
 required to channel mandatory contributions into a private
 retirement savings fund?
 Minnesota United States
 (percent)
 Yes 69 72
 No 27 25
 Don't know 4 3
 Note: Based on responses from 64 Minnesota executives and 758
 nationally who say Americans should be allowed to drop out of the
 Social Security system.
 -0- 2/8/93
 /CONTACT: Larry Wylie of Grant Thornton, 612-332-0001/


CO: Grant Thornton ST: Minnesota IN: SU:

MP -- MN016 -- 4323 02/08/93 17:26 EST
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