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By Lee Zeldin
EPA Administrator
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This won't come as a surprise to anyone who follows politics, but the federal government is messing with a good thing again. New legislation could put the United States Treasury Department in control of investing your retirement savings.
Last year, Congress introduced the Retirement Savings for Americans Act, claiming to "improve retirement security and financial well-being for low- and middle-income American workers" by establishing a new federal program. But this proposal for a new Treasury Department-run federal program is setting off alarm bells.
Private industry has been handling Americans' retirement accounts successfully for years. Recent data indicate more than 100 million Americans participate in some sort of retirement plan, which is a perfect complement to their Social Security accounts. The federal government should continue to encourage private retirement plans and create an environment where employees have more money to invest in those plans.
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Instead, under this new bill, employers would be mandated to enroll their employees in a new federal program if the business does not offer a retirement plan. That's right, mandated.
On top of that, Congress has already enacted two major retirement policy bills in recent years with provisions specifically designed to encourage small employers and gig workers to adopt retirement plans.
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Meanwhile, Social Security continues its death spiral without any real action to preserve and protect it. Most analysts expect the program to run out of money in the next decade unless benefits are cut dramatically or taxes are raised by an obscene amount.
And yet here we are, with the federal government looking to get its hands on more of your hard-earned money so it can set up another massive government retirement program. Isn't one looming disaster enough?
But wait, there's more. The investment decisions for this new fund would be made by government bureaucrats. Unlike the Thrift Savings Plan for federal employees, which is run by an independent board, this new fund will ultimately be controlled by political appointees at the Treasury Department. Can you imagine the instability inherent in a situation where investment decisions can shift based on which party is in power? The current fight over environmental, social, and governance investment is just a preview of what we can expect if this bill were to pass.
As if you needed even more reasons this is such a lousy idea, here's one more: the American Worker Retirement Fund would not be subject to many of the laws and regulations under the Employee Retirement Income Security Act and the Internal Revenue Code that apply to private sector 401(k) plans. This means the protections consumers currently enjoy with their retirement savings would disappear were they to place their funds into this new system.
Retirement savings are important, and I applaud Congress for working to make it easier for people to save. But there are already myriad ways for consumers to meet their retirement needs, and to do so with robust protections that carry no concerns about how political instability might impact their savings. Not to mention the fact that Congress has already made saving even easier with recent legislation. Maybe we should give all that a chance before creating Social Security 2.0.
Lee Zeldin served as a Member of Congress from 2015-2023, where he served on the Committee on Financial Services.
The views expressed in this article are the writer's own.
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