The US Department of Labor recently passed new rules allowing states to establish new retirement savings plans for people working in private-sector jobs without retirement plans. These new rules reportedly also allow cities to do similar things.
In light of the record many state and local governments have in managing their own plans, these developments may not be cause for celebration.
So far, eight states have reportedly passed laws establishing plans like these. They are California, Connecticut, Illinois, Massachusetts, Maryland, New Jersey, Oregon, and Washington.
While Oregon and Washington are in relatively good financial shape, the other six (large) states have dug some of the biggest financial holes in the nation, largely through government retirement plans.
The average Taxpayer Burden that Truth in Accounting calculates for those eight states comes to nearly $27,000, over six times as high as the average for the rest of the 50 states.
Is this just a coincidence?
Just thinking out loud, are these new plans one way to get money in the door, at least in the short run?
Smells Ponzi-like, possibly. We’ll be taking a closer look.