Bills in Senate Could Hinder Saving for Retirement
HARRISBURG, Pa. – The U.S. Senate is now considering bills that could overturn rules clarifying how states and cities can help millions of private-sector workers save for retirement.
More than half of American workers don't have access to a company pension plan at work. So, the Obama administration issued regulations clearing the way for states and large cities to create payroll deduction plans for those workers' retirement savings.
But, in a recent party-line vote, the House passed legislation that blocks those rules.
Stephen Herzenberg, executive director of the Keystone Research Center, says overturning the regulations could be devastating.
"What it would do is make it harder for millions of Americans, and about three million Pennsylvanians, to save for retirement," he said.
Supporters of the rollback point out that people can save money on their own, and voice concerns that state- or city-sponsored pension plans might compete with others, including traditional private-sector workplace plans.
But Herzenberg calls that argument a case of "smoke and mirrors."
"Wall Street doesn't want states and big cities to negotiate limits on the fees they can charge, to be educating consumers on what's a good retirement savings option and what's a bad one," he explained.
Five states, including California, have created pension plans for workers that don't have them, and several other states and large cities are considering them, including Philadelphia and Harrisburg.
Herzenberg notes that Republican state Sen. Pat Brown and Sen. Art Heywood, a Democrat, are looking for cosponsors for a bill to create such a plan for the entire state.
"They lay out why this makes total sense, that it doesn't compete with the private sector because these people aren't saving as it stands," he added. "So, there is bipartisan interest in this."
Herzenberg says the Senate could take up the bill that would roll back the Obama administration regulations as early as this Friday.