Sometimes I read a story and wonder if I’m reading actual news or something from The Onion. Such was the case this morning when I looked at an op-ed in the Wall Street Journal/ on Democrats’ plan to mandate a state retirement plan for private industry. [Pay link to WSJ] Here’s an excerpt that gets at the gist of the story:
The legislation would require employers that don’t already sponsor retirement plans to enroll their workers in state-administered “individual retirement accounts,” but they are really defined-benefit pensions in disguise. Democrats are calling a spade a club in order to skirt the federal Employee Retirement Income Security Act (Erisa), which imposes fiduciary obligations on private employers that sponsor defined-benefit plans. Trouble is, the retirement plan Democrats have conceived has all the trappings of a cash balance account, a breed of defined benefit that guarantees workers a return on their investments.
Do the Democrats in Sacramento really want to drive more employers out of the state? Sure, they can argue that this doesn’t have a direct impact on employers (it will be a mandatory withholding on employees), but that’s just rubbish. It will reduce employees’ take-home pay, create another bureaucracy in Sacramento, and adds another pension plan where the state will be forced to guarantee returns. And that’s before the possible constitutional question of whether ERISA (the federal law on pensions) would make this unconstitutional.
Meanwhile, Democrats in Sacramento are pushing tax increases. The proposal noted above shows that Democrats in the Bronze Golden State still aren’t serious about restoring fiscal sanity in Sacramento
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