Optional, state-run savings plan makes sense, but with stipulations
All workers should be putting some money from their paychecks aside for savings.
It’s common sense.
You cannot rely on federal Social Security alone for your retirement.
That said, we support a proposed bipartisan legislation to create a retirement savings plan for Pennsylvanians that would be administered by the state Treasury Department, but with stipulations.
Proven statistics show that more than a third of those working in Pennsylvania do not have access through their employer for a retirement savings (pension) plan or account.
Folks, that’s just over 2 million out of nearly 6 million workers.
Most of them work for small companies that don’t offer pension plans and likely don’t pay that well.
Democratic state Treasurer Joe Torsella and House Finance Committee Chairman Rep. Michael Peifer, a Republican from Pike County, have developed a plan to help those workers save for retirement via a program overseen by the state Treasury Department.
Their proposal would be similar to 401(k) accounts whereby workers make tax-deferred contributions to individual accounts that would stay with them if they change jobs.
Employers could but would not be required to contribute.
As with a state-run college savings plan that has assets of $5 billion, the Treasury Department would oversee the plan but would hire a private contractor to manage the accounts, which would be paid from the plans’ earnings.
Now for the stipulations.
There should not be a requirement that employers or the state contribute to the savings
That’s a firm “no.”
Employers should be required to participate, and employees should be automatically enrolled.
Of course, there should an opt-out for employees.
The state will spend taxpayer money to administer the program.
That does concern us as costs could easily become unreasonable.
Cost should be kept as minimal as possible.
No going after people who don’t participate to try to convince them too.
Everyone should be accountable for their own choices, their own decisions when it comes to saving money.
Employees should have to bear some cost to manage the money in terms of investing that overseen by a certified, credible third party with a proven track record.
A simple, no-nonsense plan is worthy to help people for the future.
We look forward to the legislation for further consideration.