Retirement savings accessibility, participation and adequacy are hot topics, and the following article from Institutional Investor offers additional evidence that the vectors are lining up to slowly replace the private employer based DC plan with government intervention and ultimately takeover.
Time-to-Collaborate-on-a-New-Retirement-Plan.pdf
Although there is no argument against the premise to promote long-term savings for one’s old age security, I often question the added motivations and the unintended consequences that could result from such intervention and implementation. The only way is to become active in the debate and try to minimize the fallout. The question is how to devise a system that encourages savings for those workers who do not have access, elect not to participate, or fail to save adequately, at the same time not injuring or dis-incentivizing the current private employer-based DC plan.
I am not hopeful that in 10-years we will recognize the employer sponsored DC plan market. In the name of universal coverage, we may regret the disappearance of choice, freedom, and self-determination for those who are active participants with gradual erosion of tax incentives with a net effect of saving less for those who are now contributing now and saving more for those who are not. This dilution or “reduction to a lower mean” process that offers politicians and promoters talking points to proclaim success in the future is in reality a redistribution of wealth and eroding the free enterprise system.