I headed off to today's Salem City Club noon meeting thinking, this won't be very interesting. The subject was "Retirement Security (Or Not) for Oregonians: Can We Avoid a Crisis?"
Well, I was wrong -- mostly because I'd forgotten how fluently entertaining the speaker, State Treasurer Ted Wheeler, is. Likely he could make a talk on "How Paint Dries" interesting.
I've heard Wheeler speak several times before.
Whenever I see him, I feel grateful that Oregon has talented guys and gals such as Wheeler in state government. This thought also runs through my head: He'd make a great Governor someday. Probably won't happen, but it'd be terrific if it did.
Wheeler actually made SB 615, which creates an Oregon Retirement Savings Plan, a subject of captivating attention. The bill flowed from the report of a task force he chaired, whose Executive Summary starts off with:
The State of Oregon is facing a retirement security crisis. There is a substantial financial industry in the state and saving for retirement is a rational decision. Yet, many Oregonians are not preparing themselves for retirement. Experts recommend individuals save eight times their last annual income for a secure retirement. However, as of 2011, more than half of Oregon workers have saved less than $25,000 for retirement and more than a quarter have saved less than $1,000.
Since the Salem City Club usually likes to have a debate/discussion on political issues, Wheeler said that he'd be doing some debating with himself, since he was familiar with the arguments against SB 615.
He did do a bit of Wheeler vs. Wheeler, but the reasons opponents of SB 615 have come up with are so lame, it wasn't much of a debate.
Basically, as one might expect, why is government involved with private sector retirement accounts? The answer being, because workers need a state-sponsored plan.
Small businesses, Wheeler said, don't have much leverage in setting up a retirement savings plan for their employees. It takes time to do this, and financial firms aren't very interested in businesses with a small number of employees.
Plus, people have gotten used to their retirement savings being managed through their job. Ditto with their health insurance.
So even though an employee of a business that doesn't offer a retirement plan currently could, on their own, put 3% of their paycheck into, say, a Vanguard Total Stock Market index fund, most aren't going to do it unless this happens through an automatic payroll deduction.
Wheeler said that some business lobbying groups have come out against SB 615, but he hasn't heard from a single actual small business owner who had concerns about the bill.
The Big Government Burden imposed by SB 615, he told the Salem City Club audience, amounts to two things. One, hand out a brochure. Two, add another payroll deduction to employee accounts, which can be done easily by either an outside payroll service or the business owner via Quicken, or whatever.
There would be no cost to employers, and only a small management fee charged to employees.The investment vehicle likely would be index funds, Wheeler said, which have very low expense ratios.
Investment firms would be asked to present proposals to the Oregon Retirement Savings Board (staffed by just two FTEs, which isn't a big expansion of state government). Since these would be existing investment products, the Board wouldn't need to do anything computer or software-wise, an admittedly sore subject in Oregon these days.
After listening to Wheeler, SB 615 looked to me to be a no-brainer "Yes" vote for Oregon legislators. Hopefully that will come to pass.
I got to ask a question near the end of the program. It went something like this:
This is sort of a philosophical question and comment. You mentioned how some people object to being forced to spend a few minutes setting up a retirement plan for employees. But I suspect that most of these people are either members of churches where they do volunteer work, or otherwise spend quite bit of time doing other sorts of "good works."
So why is collective compassion through a vote of our representatives to help people through a required government program viewed by some as being less virtuous than individual compassion expressed through voluntary action? In Canada and most European countries, morality isn't viewed this way.
Wheeler said "good question." (However, he said that quite often during the Q & A.)
He reiterated some points he made before about individual business owners being fine with SB 615, while business lobbying groups raised more general Big Government objections. Wheeler noted that he'd talked with someone from Australia who couldn't understand what the big deal was with this bill.
"In Australia," he was told, "this sort of plan is required and everybody offers it. End of story." Wheeler said that the United States is more individualistic and free market oriented.
Not a good thing, in my view, when it comes to being compassionate to those in need.
There's no inherent contradiction between doing good works individually and voluntarily, and doing good works collectively and via government action. As Americans, we can and should do both.