May 8, 2014
Legislators in Connecticut, West Virginia and other states have proposed creating pension plans to cover private-sector employees whose employers do not offer pensions.
The proposal cannot overcome the absurdity of having state government create state-subsidized individual retirement accounts. The 50 state governments already are staring at a combined unfunded liability of up to $3 trillion in their various pension plans for teachers and other public employees.
And they are going to take on more responsibilities?
Nevertheless, lawmakers in Connecticut want to have state taxpayers somehow finance pension plans for people in the private sector. In Connecticut, supporters of this plan cite the difficult case of Dorry Clay, 54, who has cancer and is struggling with her business and cannot set aside money for a pension. She faces working until she is in her 70s.
But such a pension plan would not be limited to Clay, business groups in Connecticut point out. Also, as with Obamacare, the state would mandate that people save toward retirement, Connecticut state Sen. Joe Markley said.
“We have to ask ourselves if it’s government’s place to force people to save for retirement,” Markley, a Republican, told Stephen Singer of the Associated Press.
But besides the constitutional question, there is a practical problem. The state of Connecticut’s public employee pension plan is only 42 percent funded, leaving a hole of more than $13 billion for taxpayers to fill.
Here in West Virginia, which has an unfunded liability of “only” $5 billion, the House of Delegates passed such a measure this year, sponsored by Delegate Doug Reynolds, D-Wayne. Fortunately, wiser heads in the state Senate thwarted his plan …
Pension promises are easy to make and difficult to keep. Legislators should stay clear of them.
— Charleston Daily Mail