COMMENTARY: State-sponsored IRAs are a bad idea

I read with shock the Review Journal’s Dec. 17 article in which our newly elected lieutenant governor, Kate Marshall, contends “there’s not an easily accessible way for (more than half of Nevada’s private-sector employees) to save for retirement” without the introduction of her proposed state-sponsored IRAs. The Review-Journal reports “Marshall has worked for the past two years on pushing for the state to enact a state-supported retirement program, often referred to as an auto-IRA. It would require employers who don’t offer retirement plans to automatically enroll their employees in a state-administered program. Employees would have the option to opt-out.”

As a chartered retirement planning counselor who has been active in the retirement planning industry for 26 years, I can assure you that Ms. Marshall grossly misunderstands this issue and should breathe deeply before attempting to layer another regulatory burden on Nevada’s small-business owners.

Americans who desire to save for retirement have always had an abundance of opportunities. They can walk into almost any credit union, bank, stock brokerage or insurance agency and establish an “automated retirement savings plan.” To suggest Nevadans don’t “have access” to retirement savings opportunities without their employers being forced to administrator such is simply ludicrous.

To further quote the Review-Journal story, “In terms of costs, Marshall said there doesn’t have to be any for the state in setting it up, adding that it could potentially bring a small amount of money to the state via fees. Beyond helping employees save, Marshall believes the program will be a boon to small businesses when it comes to attracting talent by allowing them to offer the state-run retirement program.”

The breadth of Ms. Marshall’s ignorance (and possible duplicity) on this topic is stunning. Small companies have had access to SIMPLE-IRA plans since 1996 at negligible expense without the state needing to assume liability for potential employee investment disappointments. That she would admit the potential for fee revenue to the state is perhaps her most honest declaration. Her efforts certainly would impose costs on employers.

Ms. Marshall’s enthusiasm reminds me of those whom Ronald Reagan famously warned us against when he said, “The nine most terrifying words in the English language are ‘I’m from the government, and I’m here to help.’”

The last thing Nevadans need is another well-intentioned government program being foisted on small-business owners who are already overburdened with government-mandated regulations, reporting requirements and taxes (aka “fees”). With all due respect to Ms. Marshall, her energies would be more productively spent on education.

Mark Cordner writes from Las Vegas.

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