Several states, most notably Illinois and California, are in the process of opening up their public retirement plans to workers in the private sector to allow people to save without giving so much money to the financial industry. Under this plan, workers in private firms would have the option to contribute to a state-managed system.
This would have the advantage of keeping the same plan even as someone changed jobs and the fees would be far lower. Instead of fees of 1.0-1.5 percent, workers would likely be seeing fees in the range of 0.2-0.3 percent. Did I mention this was voluntary?
Okay, so we’re talking about giving workers the option to save for their own retirement in individual accounts. If the Republican Party stood for anything other than giving money to rich people, this would be it.
But the Republicans are up in arms against making it easier for workers to save. Paul Ryan and his gang are planning to deny states the right to offer such plans...
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They argue, incredibly, that workers need safeguards with their savings and that the government must have oversight over employers sending checks to the state system.
This one is too stupid even for Washington politics. Everyone knows that there is nothing the Republicans in Congress hate more than government regulations that protect workers. This is why they were so anxious to repeal the fiduciary rule requiring financial advisers to act in the interest of their clients. This is why they want to gut the Consumer Financial Protection Bureau.
The story here is about as simple as it gets. Republicans’ buddies in the financial industry will lose a lot of money if workers can put their money in these state-sponsored retirement systems instead of having to rely on their rip-off outfits. The Republicans are rigging the system to transfer tens of billions of dollars a year from ordinary workers to their rich friends. The only principle here is giving more money to the rich.
