Empower Wisconsin | Sept. 19, 2019
By M.D. Kittle
MADISON — If you like the government involved in your retirement planning, you’ll love a state Assembly bill being floated.
The legislation creates a state-administered retirement savings plan for employees “of certain private employers” in Wisconsin.
It’s a pilot program, a test plot to see if the state can boost the dismal retirement savings rates of the average worker. The question is, should the state be in that business? In essence, the idea is, You have failed to plan for your future, citizen. Let government take the wheel.
The bill creates more government bureaucracy, establishing a Wisconsin Retirement Savings Board attached to the state Department of Administration. Said board would be “required to establish the savings plan.” Employees — again, private-sector employees — “may contribute” through payroll deductions. They may also opt out. Just like the automatic union dues system, which, of course, has been a huge success for the countless employees who have struggled to escape compulsory payments to Big Labor.
If you’re not sold already, the bill comes with another mandate for small businesses. It would require automatic participation for “certain employers of 25 or more people in this state,” according to the Legislative Reference Bureau.
The Retirement Savings Plan would be managed by third-party investment administrators. Some very special interest would get a very special economic boost — at taxpayers expense.
Proponents say it’s a new twist on the popular 401(k) plan. Except it isn’t. That’s an individual retirement savings plan that employers may offer at their own discretion. Many do — because that’s what the market demands, not the government.
If you think this is just another liberal, big-government proposal, you’d be wrong. The legislation was authored by Assembly Republicans. It is hated by many conservatives, including state Rep. Mary Felzkowski (R-Irma), who calls the legislation “anti-free market.”
“There’s no way this passes. It’s so not a conservative principle,” Felzkowski said. “This is nothing Republicans should ever stand for. We are about the market and competition. This is not anything a true conservative will support.”
The impetus for the bill, according to a recent memo seeking co-sponsors, is the dire state of of retirement savings.
“According to a U.S. Federal Reserve report, roughly one quarter of adults in the United State have little to no retirement savings or pension,” the memo notes. “Of the nearly 25% of the population without these savings, 42% are people between the ages of 18 and 29.”
So why is it the government’s role to ensure working-age people get their savings stuff together?
How about teaching these young non-savers personal finance and personal responsibility, Felzkowski said.
The legislative memo notes that 45 percent of single retirees rely almost exclusively Social Security, accounting for 90 percent of their income. As the bill’s authors point out, Social Security was never intended to replace or be the sole source of retirement income. Social Security’s looming insolvency only makes a bad situation worse. But conservatives say lawmakers ought to learn from the failures of the massive government entitlement program and stay out of the retirement savings business.