NO ONE DOUBTS WHERE WE'RE HEADED, WE'RE JUST DEBATING THE PACE:

The Alternate Plan does not follow either of the traditional defined-benefit or defined-contribution models. Rather, employee and employer retirement contributions are pooled and actively managed by a financial planner -- in this case, First Financial Benefits, Inc., of Houston, which originated the plan and has managed it since inception.

Like Social Security, employees contribute 6.2 percent of their incomes, which the counties match. (Galveston has chosen to provide a slightly larger share.) Once the county makes its contribution, its financial obligation is finished. As a result, there are no long-term unfunded liabilities.

Guaranteed Interest

Unlike a traditional IRA or 401(k) plan, which account holders can actively manage, the contributions are pooled, like deposits to a bank savings account, and top-rated financial institutions bid on the money.

Those institutions guarantee a base interest rate -- usually about 3.75 percent -- which can increase if the market does well. Over the last decade, the accounts have earned between 3.75 percent and 5.75 percent every year, with an average of around 5 percent. The 1990s often saw even higher interest rates, 6.5 percent to 7 percent. Thus, when the market goes up, employees make more; but when the market goes down, employees still make something. This virtually eliminates the risk that a major drop in the market will cause workers to delay retirement.

Death and Disability

Social Security is not just a retirement fund, but a social insurance program that provides death, disability and survivors benefits. When financial planner Rick Gornto devised the Alternate Plan for Galveston County, he wanted it to be a complete substitute for Social Security. Thus, part of the employer contribution provides each worker a term life insurance policy, which pays four times the employee's salary, tax free, up to a maximum of $215,000. That's nearly 850 times Social Security's death benefit of $255.

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