Ann Tergesen

speaker

57 appearances 2 recordings 1 series first heard Aug 2017 last heard Sep 2023

Ann Tergesen’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · States Begin Auto-Enrolling Workers in Retirement Plans · 17 Aug 2017 podcast

The state programs are designed so that they are

really a payroll pass-through program so that the employer simply has to sort of change their payrolls to deduct a certain amount of money from the paycheck and send it to the savings program.

But nonetheless, there are employers who are concerned that that's going to create a burden on them.

So that's one sort of category of opponents.

Another category is financial services companies that sell 401K plans, particularly selling 401K plans to small businesses.

They perceive this as competition from the government, and they don't like it.

The third category is, well, this year, Congress voted to do away with an Obama-era regulation that sort of facilitated these programs, made it easier for states to set them up.

So, you know, there are lawmakers who believe that it should not be the role of government to get involved in private savings.

And so Congress, by scrapping that regulation, kind of aligned themselves with the critics.

Okay, so Oregon's plan works.

It's an IRA-based plan.

So what it is is that all the employers in the state are going to be required on sort of a rolling basis to start to enroll their employees in the program.

and to automatically enroll them so that they automatically deduct a certain portion, I think about 5% is the default amount, from the person's paycheck.

And they funnel that through into an IRA that's managed by a private company, State Street Investments.

in mutual funds, and it's held in custody by another private company, Bank of New York Mellon.

So these are private sector investments similar to a 401k, but they're IRA-based.

The employees are free to opt out.

So for the employers, they're required to facilitate this, but the employees are allowed to opt out.

It started July 1st.

volunteered to sort of serve as guinea pigs.

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