To expand retirement security, a look to the states
There is a movement afoot to use the efficiencies of public retirement systems to administer new types of pension plans for private-sector workers.
Last week, in a New York Times op-ed titled, “Don’t Cut Pensions, Expand Them,” Professor Teresa Ghilarducci of the New School for Social Research argued that, “Rather than curtailing public and private pensions, New York and other states could save millions of workers from impending poverty by creating public pensions for everyone.” She asserts that it would be far more efficient to use the institutional money managers that now invest money for the state to do the same job for private-sector workers.
Some states – and at least one city – have already taken steps in this direction:
- Massachusetts recently enacted H. 3754, a measure that would allow the state retirement system to establish a savings plan for small not-for-profit organizations.
- The California Secure Choice Retirement Savings Act (S.B. 1234), which would enable private-sector employees to join a new type of retirement plan sponsored by the state retirement system, has been introduced into both the California Senate and Assembly.
- The Connecticut General Assembly is considering H.B. 5313, which would establish a commission to study the development of a state-administered retirement plan for small businesses and other employers that can’t afford to set up plans for their workers.
- In the latest development, New York City Comptroller John Liu has teamed up with Professor Ghilarducci to push for a pension plan for private-sector workers that would be managed by the city, similar to the legislation introduced in California.
While Congress is engaged in partisan griping and inaction, the states can lead the way in developing new retirement solutions that expand secure and adequate coverage for all, helping to avert a bigger retirement income crisis.
Read this week’s New York Times article about these initiatives.
Read my testimony in support of the Connecticut legislation.