I found myself at the opening session of the NAPA 401(k) Summit in New Orleans earlier this week listening to Preston Rutledge, benefits tax counsel for the U.S. Senate Finance Committee.
The guy is a committee staff member and reports to staunch Republican Sen. Orin Hatch. I usually don't agree with the guy but I need to keep that part of me under wraps while I'm covering this. I mean, I'm getting paid to be objective.
Rutledge was discussing how the public sector increasingly was positioning itself to take over the retirement biz in the United States. He talked a bit about the possibility that a successful MyRA program might become a victim of its own success – swelling the coffers so quickly error rates would shoot "off the charts."
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He had no problem with a mandatory retirement savings program – and neither do I. Then he went on to denounce wonk chatter about something called a "refundable saver's credit" for low- and middle-class workers that might be introduced in the next couple of months and another report that the government might even kick in cash to some citizens' retirement savings accounts. He sarcastically called that "The Trifecta."
I came back to his words after the session was over and I wrote the story. I needed to give it some more thought. My conclusion was little more than the obvious: entitlements are tricky. Everyone gets Social Security, but those who need the most typically get the least. Similarly, I suppose, if Hatch's worst nightmare hatched, everyone would get some retirement money. But, just like Social Security, those who need it the most again would get the least.
It's pretty clear we're entering decades of what will be a nation-changing retirement crisis. What isn't so clear to me is whether too many entitlements are too much of a good thing.
At this NAPA session, Rutledge also had some words to say about under-funded pensions. Detroit's got the biggest, most famous problem to fix, but the cities and town of California are close on its rear.
"Keep your eyes on San Bernardino," he warned.
The staffer said that it may be the smartest thing to do to move our country to a DC program. But he didn't really like that either.
"I'm a fan of lifetime income," he said. Who isn't? I thought. Certainly not the person who would need government entitlements to supplement/pay for his retirement?
The people who work hard for their money during their working lives should be allowed to use it to live well during their retirement. Our seniors will soon be in three camps: those who do, those who didn't and now can't (or maybe they'll be allowed to anyhow?). And those who did but still can't. I wonder how or if ever this playing field will be leveled.
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