Former Connecticut Secretary of the State Miles Rapoport proposed a state-run pension plan in a Hartford Courant op-ed last month.
You might be asking, “Don’t we already have a pension plan?”
Rapoport suggests creating a new plan that any state resident can buy into:
One idea that is particularly promising is that the state create individual retirement accounts that would be open to all citizens. Contributions to these accounts would be managed by state pension funds separately from public sector funds in a large investment pool, which would deliver higher returns and lower fees to savers. Participants would also have the option to annuitize their balances at retirement, providing them with a lifetime stream of income and removing the worry of outliving one’s retirement savings that 401(k) participants face today.
There are so many reasons why this is a bad idea, it’s hard to know where to start.
Problems with state pension funds across the country are epidemic already. The state needs to pay off its obligations, not incur new ones.
What would this really provide to consumers? Either the state’s retirement plan will be just as good as any on the private sector (if that’s the case, then why have it) or it will be subsidized by taxpayers.
Everyone in Connecticut can set up a retirement account. There is no access problem.
The problem is not having enough to put into the account. The only way to fix that is to create an environment where the economy thrives.
More jobs and better jobs will lead to bigger balances in retirement accounts.
Government meddling only holds us all back.
It could happen here – Archive: