Major media outlets are lining up to defend Obama-era legislation meant to auto-enroll private sector workers in state-run 401ks and IRAs for those who lack retirement plan access.
President Trump killed its city-run counterpart in mid-April, and Senate majority leader Mitch McConnell, R-Kentucky, said “we will advance another CRA to protect workers from similar efforts at the state level.”
Which has its supporters worried. Both The Washington Post and The Hill ran op-eds Tuesday defending the legislation as a way to cover workers, especially those of smaller employers.
“I’m at a loss as to why some Republicans on Capitol Hill want to block the creation of workplace retirement plans for small-business employees,” Post columnist Michelle Singletary began.
After mentioning a host of statistics and studies on the supposedly low number of companies that offer 401(k)s, she called Republican claims that such legislation would discourage employers from establishing their own plans “hogwash.”
Singletary made no mention of Republicans objections to ERISA exemptions for state-run plans, or their criticism that nothing would prevent cities and municipalities from overloading investment menus with their own government bonds.
Instead, she quoted William A. Birdthistle, a professor at Chicago-Kent College of Law and author of “Empire of the Fund: The Way We Save Now.”
“I wish we didn’t need state solutions to what is a nationwide problem of far too few Americans having access to a prudent and affordable savings plan,” Birdthistle told her.
“To be clear, the states are facilitating the creation of these retirement plans, which are run by private investment firms,” Singletary added. “Employees put in their own money and control how it is invested, just like they would if they worked for a company that offered a workplace retirement plan.”
She concluded with a call to action (literally), noting that AARP is “planning to run radio ads to encourage people to call their members of Congress and ask them to oppose any action to block states from helping to set up the retirement savings programs. If you want to join the effort, call AARP’s retirement savings hotline.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
