At least it's a start. Modest and maybe with a hole or two, President Barack Obama unwrapped a retirement option for workers whose companies don't have a 401(k) plan during his State of the Union Address.
By now, you've read about the MyRA accounts, which will sort of be like individual retirement accounts. Employees can have part of their salary deducted to be deposited into accounts invested in government bonds that would be treated like an IRA at tax time. After they reach a maximum balance, they have to be rolled over into an actual IRA.
I called a childhood friend who doesn't have access to a corporate-supplemented retirement plan and he was delighted. Finally, he said, I get the semblance of a fair shot.
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But this wouldn't be America is someone wasn't ticked. And sure enough.
The American Society of Pension Professionals & Actuaries called the proposal "anti-retirement tax incentive rhetoric" and complained it wasn't even a tax write-off like most other tax incentives. It's just a deferral, they pointed out. Um, you mean like a 401(k)?
"It is extremely unfortunate that while promoting the importance of retirement savings in the State of the Union, President Obama chose to attack the 401(k) plan, the primary retirement vehicle for tens of millions of middle-income working Americans," ASPPA CEO/Executive Director Brian Graff said in a written statement.
I really don't understand what's behind the objection. What comes to mind is that if investors put money in the President's plan, then they're not putting it in the plans whose companies make up the ASPPA constituency. But maybe I'm wrong.
What does seem like fair ground for consideration is the as-yet time period it would take for a big ball of MyRA twine to turn into a gen-u-ine IRA. If it takes too long, investors might get impatient and take their money elsewhere. Also, it was just another speech. Let's see if comes to pass.
But even if it's too little, even if it's too slow, and even if it's too late, it's still something. It's an idea, a policy that can be put into action under existing executive authority and doesn't have to go through the burdensome legislative process.
So, like I said, it's a start. It's small but it could matter to millions. And it gives all the have-nots a chance to do at least a little something to make themselves more independent. More capable. And that's a grand policy for a United States president to espouse.
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