How Do Workers Feel About State-Run Retirement Plans?

401k state run plans, Republican, Congress

Will state -run retirement plans prevail?

The masses have spoken (sort of).

A new AARP survey shows that an “overwhelming percentage” (84 percent) of American private sector workers strongly, or somewhat, agree that officials should back legislation to enable workers “to save their own money for retirement.”

The organization notes the survey of nearly 4,000 workers aged 18 to 64 included a significant oversampling of African Americans, Latinos/as and Asian Americans. However, it finds strong backing across all races, ethnicities and political ideologies for elected officials to clear the way for employee savings initiatives.

The total agreeing that lawmakers should support positive legislative action includes 89 percent of Asian Americans, 86 percent of whites, 83 percent of African Americans and 78 percent of Latinos/as.

It an interesting add-on, it includes 89 percent of self-identified liberals, 86 percent of moderates and 82 percent of conservatives.

A pair of congressman introduced joint resolutions recently to block the advancement of state-run 401ks and similar retirement plans, taking specific exception to the ERISA safe harbor exemptions such plans would employ.

Rep. Tim Walberg, R-Michigan, and Rep. Francis Rooney, R-Florida, claim state-run proposals and plans would “jeopardize small business retirement plans, put taxpayers at risk, and undermine the retirement security of working families.”

Their objections center on the Obama administration’s finalized regulations establishing a “safe harbor” from rules they say would pave the way to government-run IRAs to be managed by states and certain municipalities, and some employers would be forced to automatically enroll workers in government-run IRAs through payroll deductions.

Unlike private-sector retirement plans, they argue, workers enrolled in these public-sector plans would not be afforded the important protections provided by ERISA.

Thus far, seven states—Illinois, Washington State, Oregon, New Jersey, Connecticut, Maryland and California–have approved various versions of what AARP calls “Work and Save” programs.

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