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Opinion editorials Handling of Pit Appeal Calls for a Time-Out |
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opinion editorialsThis editorial first appeared in the Albuquerque Journal. It was written by editorial page staff and is unsigned as it represents the opinion of the newspaper rather than the writers
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Wednesday, September 08, 2010
Auto IRAs a Smart, But Depressing, Choice
Is Sen. Jeff Bingaman's plan to require employers to set up automatic IRAs for their employees — who would be required to "opt out" if they don't want to participate — another step toward a "nanny state"? Without question.
Do more Americans need this nanny? Arguably they do.
Just a few days before the New Mexico Democrat rolled out his bill — which targets businesses with 10 or more full-time employees that don't already offer a 401(k) or other qualified retirement program — a state report revealed more than 13 percent of New Mexicans age 65 or older live at or below the federal poverty line — on $10,830 a year.
The report's recommendations to mitigate that sad fact are to set up a state tax for taking care of the elderly at home, a permanent state transit fund dedicated to the development of transportation programs, more rental assistance vouchers and property tax relief for seniors.
In other words, get everyone of working age to give a little more to help seniors who make do with a lot less — in many cases because they didn't save.
That proposal is compassionate and something a civilized society should consider. But so is personal responsibility — encouraging those working-age folks to put a little something aside now so they don't have to pick between the pharmacy and food later.
Taking that responsibility apparently needs to be as easy as possible. According to research Bingaman based his bill on, only half of Americans have any retirement savings to speak of — and Social Security will only cover half their bills. Meanwhile, projections for New Mexico show that come 2030, "over 26 percent of our population will be over 65.
And while unions would hold out for pensions, another sad fact is many employers simply aren't offering them any more.
Under Bingaman's plan, prompted by the Obama administration, employees would be automatically enrolled in an Individual Retirement Account, with at least 3 percent of their wages going into it. They could opt out. Their employer would get a tax break equal to the cost of administering the program.
Granted, it would be better to offer incentives to get small companies to offer this kind of program. And once such a program is in place it would be better to educate people on the benefits of "opt in."
Bingaman's bill seems to acknowledge personal responsibility is no longer operative and we might as well force folks to save now to limit how much we underwrite their underfunded retirements later.
In short, it's better to play nanny first.
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