Are you ready for another scandal? No, it’s not one yet. But you can bet your last penny (in fact if you live in California, that’s precisely what you might be doing) that it will be. California lawmakers are trying to implement a new mandatory Social Security style retirement fund for private sector workers. It will be called the Secure Choice Retirement Savings Program. However, there is no “choice” involved in it. You will be compelled to participate.
Critics wonder how the state with a turbulent record of budget keeping and a much-ridiculed public worker pension system can be counted on to protect people’s money. The essential question is, “how much do you trust Sacramento” not to find a way to crack into the fund and squander the money?
(Fox News) California lawmakers are pushing a controversial, first-in-the-nation plan that would require private-sector employers to remove 3 percent from every worker’s paycheck. The money would go into a new state fund with a guarantee that all withheld funds plus investment gains will be available for distribution at retirement age.
(Fox Continues) “I think you’ll find out that what is promised in the (Secure Choice plan) is not possible to deliver,” lobbyist Marc Burgat contends. “If you could deliver guaranteed returns with less than one percent costs, no employer liability, no government liability — that’s a fantasy.”
Employers who don’t conscript workers into the program are subject to fines, though they will not have to provide any matching funds — not at the outset.
This is what the proponents argue: (LINK
Guaranteed Rate of Return – A unique feature of CSC that sets it apart from other universal account proposals is its guaranteed rate of return, which would be made possible through the use of private insurance. What they don’t say is that in order to guarantee a rate of return, it has to be so minuscule that it really doesn’t matter. The State of California promises to bury your money in a coffee can and not dig it up… and they do that with a straight face.