Brian's Column 01-09-2015

I wrote a column recently on Illinois’ Secure Choice Savings Plan and received some negative feedback.  While I may not agree with the newly-minted retirement plan, I am thankful for freedom of speech and am glad we live in a country where we are allowed to have our own opinions.  I encourage the discussion fostered by differing opinions.

I would like to continue the conversation on the Secure Choice Savings Plan by offering some more perspective on some of the arguments that have been used in favor of the plan.

One argument for the program is that it encourages personal responsibility.  While I understand that it is imperative for Americans to start doing a better job of saving for retirement, a bill that requires businesses to participate and automatically opts employees in unless they choose to opt out does not encourage personal responsibility.  Instead, it increases the responsibilities of government and the dependence of the people on the government to make their decisions for them.  If we were really trying to encourage personal responsibility, we would teach our people about the importance of saving for retirement, and we would introduce them to financial firms that already do a good job of investing retirement funds in the right places (and have lower administration fees, I might add).  One caveat from this point—if you think the average Illinoisan’s saving habits are dismal, just look at Illinois’ saving habits.  The state can’t even save enough to adequately fund public employee pensions.  Before it starts sticking its fingers in private sector savings, it should start managing its own finances more responsibly.

Another argument in favor of the program is that it gives small businesses a competitive edge. The program does allow small businesses who can’t afford the costs of 401Ks to compete with larger businesses that can offer comprehensive benefit packages.  The Secure Choice Savings Plan does not, however, match employee contributions like larger businesses’ 401K plans, so, essentially, this plan is no different than a savings plan employees without 401Ks could find through private-sector financial firms.  Additionally, these small businesses, many of whom are already overwhelmed by government regulation, will “have to spend time and effort to set up and implement [the plan],” according to the National Federation of Independent Businesses.  The NFIB also states that “any mandate that would add complexity and disrupt these [small business’s] efficiency and productivity is very troublesome and unwise.”  Small businesses may also be “considered plan fiduciaries and would be subject to the same compliance laws, associated costs and liabilities as the state,” says the NFIB, implying that if an employee feels fiduciary obligations are not being met, he could sue the state and his employer.

Proponents of the Secure Choice Savings Plan also say that the state of Illinois will not control the retirement plan, but I beg to differ.  The fund will be managed by a seven-member board which will consist of the state treasurer, the state comptroller, the Office of Management and Budget director, and four additional gubernatorial appointees who can be hired and fired “based on political considerations,” according to the Illinois Policy Institute.  The board is essentially controlled by whoever controls the state of Illinois.

One final argument for the Secure Choice Savings Plan that I would like you to consider is that it will cost the taxpayer nothing.  First of all, what law passed by the government of Illinois in recent years has really cost taxpayers nothing? And secondly, while the Office of Management and Budget’s note on the bill “indicates no fiscal impact on the theory that private interests or the federal government” will fund the $15 million to $20 million startup costs, according to the Illinois Policy Institute, there is no guarantee that funds will not be appropriated from the state’s general fund and, in fact, the bill allows for the program to be funded by the state, if necessary. So yes, this bill may not cost the taxpayer a penny if full federal or private funding comes through.  But if it doesn’t, we’ll be out another $20 million, and I honestly can’t remember the last time the state paid back a debt to its taxpayers in full.  Don’t we still owe the pension funds $110 billion and still counting?

Ronald Reagan once said that “government exists to protect us from each other. Where government has gone beyond its limits is in deciding to protect us from ourselves.”  I firmly believe the Secure Choice Savings Plan is an instance of government going beyond its limits in an effort to protect the people of Illinois from their ability to choose to save or to not save for retirement.

As always, you can reach me or Sally at 815/232-0774 or email us at You can also visit my website at or follow me on Facebook, Twitter, and Google Plus.

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