Factfile

President George W. Bush unveiled details of his plan to overhaul the 70-year-old social security program and allow workers to divert part of their payroll taxes into private accounts.

Here is what Mr Bush and the White House said about how the plan would work and how much it would cost:

¤ Call for a permanent fix: Mr Bush said he wanted to "permanently" fix what he said were structural problems with social security's finances. He listed options that he said should be "on the table," including tying benefit increases to inflation rather than faster-growing wages, limiting benefits for wealthy retirees and raising the age of eligibility for retirement benefits.

No changes for those 55 and up: Mr Bush said anyone 55 and older would stay within the current social security system and would be exempted from any benefit changes.

¤ Phased-in introduction of personal accounts: Those under 55 would be given the option of shifting a portion of their payroll taxes into personal accounts that could be invested in stocks and bonds.

Eligibility for participation in the plan would be phased in over three years. Workers between 40 and 54 would be allowed to partake in the first year. Those between 26 and 54 would be eligible in the second year. In the third year, anyone born in 1950 or later could take part.

¤ Cap of four per cent on contributions: A payroll tax of 12.4 per cent split evenly between workers and their employers funds the current social security system.

Under Mr Bush's plan, workers could shift four percentage points of that contribution toward a private account.

But initially the contribution would be capped at $1,000 per year and would gradually rise.

¤ Centralised management of accounts: A centralised entity to manage the accounts would be set up based upon the model of a retirement savings program for federal employees known as the Thrift Savings Plan.

Workers could choose among stock and bond funds that the White House said would consist of conservative investments.

¤ Costs: Mr Bush's plan would involve "transition costs" to make up for the revenue that would go into private accounts instead of into the government's coffers.

Many estimates have pegged the 10-year cost at $1 trillion to $2 trillion.

But the Bush administration gave a lower estimate of those estimates, at $754 billion. That number includes $90 billion in debt service costs.

The reason that estimate is lower than others is that the Bush plan is phased in, reducing the cost of the private accounts in the first few years.