Talk that the new Canyons School District may opt out of Social Security has stirred up more questions than answers about the risks and benefits to employees.

As the new district considers its options, it will follow a course explored by a handful of Utah municipalities. Under federal law, any governmental entity created after 1951 that pays into a "defined retirement plan" such as a 401(k) or state pension is supposed to join or opt out of Social Security by filing a "218 Agreement."

A city, county or school district makes the decision by polling its employees. Opting in is permanent, but agencies that opt out can reverse the decision later, explained Doug Smith, spokesman for Region 8 of Social Security Administration in Denver.

"An entity may enter into a 218 Agreement at any time," Smith said.

As a newly created entity, Canyons, the first new school district in Utah in more than a decade, is exploring its options.

East-side residents conceived Canyons last year when they voted to break away from Jordan School District. The split takes effect July 1, when about 2,500 of Jordan's teachers, principals and classified staff will transfer to Canyons.

Whether Canyons workers vote to opt out of Social Security or not, their decision is bound to affect each worker differently.

More than 50 percent of all retired people depend on Social Security for about half their income, said Laury Adams, a Houston-based financial consultant. In 2009, the maximum Social Security monthly payment for a high income earner at full retirement age is $2,323. The average payment is $1,156.

But too many Americans play the Social Security game "without bothering to learn the rules," Adams said. "Very few realize how decisions we make about work, marriage and divorce affect the way we will live in our later years."

Adding to the mix, Social Security's future is uncertain. It's projected to become insolvent by 2037. Meanwhile, state pension plans also are fast becoming extinct.

Utah municipalities formed after 1951 have addressed the requirement in different ways.

In 1982, Sandy decided to opt out of Social Security after years in the system. But when Bountiful sought to opt out the following year, that city was informed it could not.

"They changed the law," City Manager Tom Hardy said, "and withdrawing was no longer an option" for previously existing jurisdictions because the 1983 Social Security amendments prohibited local jurisdictions from terminating coverage after April 20, 1983.

For David Muir, finance director for the city of Cottonwood Heights, the decision was a no-brainer.

Cottonwood Heights --- incorporated in January 2005 --- opted out, but still pays the value of its Social Security obligation into a 401(k)-type plan. City employees also are enrolled in the state's pension plan.

"Those benefits are yours to do with as you like. You can earn interest on them," whereas Social Security benefits may never materialize, Muir said. "When it comes to retirement, cash is king."

But in neighboring Holladay, which incorporated in November 1999, employees voted narrowly to belong to the Social Security system after carefully weighing all the benefits, said Finance Director Diane Burandt. And, she noted, there is little risk the system will disappear.

"If you're disabled, Social Security is the only benefit that will pay you until you die," she said. "For spouses and kids, we found it was the way to go."

Canyons spokeswoman Jennifer Toomer-Cook said the district won't schedule a vote on whether employees will opt out of Social Security until after July 1. It will give employees 90 days notice, as required by law.

"There is no question the law requires this," Toomer-Cook said.

Meanwhile, the district will continue to pay into Social Security for the few administrative employees now under its charge, Toomer-Cook said.