Illinois earlier this month did something no other state has done: it signed into law an automatic retirement savings program to help residents who have no such plan at work. Other states are considering similar programs. Jon Vogler, who works as a senior analyst on retirement research at Invesco Consulting, sees plenty of challenges ahead for these programs. Before starting work at Invesco in 2008, he spent more than 25 years in compliance, research and underwriting of retirement services. Here, Vogler addresses some of the key issues facing state retirement programs for BenefitsPro.com's Advisor Corner. 

1. What are some of the biggest problems that we might see as states move forward in setting up their own retirement systems?

State-run retirement programs for private-sector employees would have limited investor choice for plan participants. There could be substantial expenses for states and taxpayers in start-up and ongoing administrative and compliance costs. State-run retirement programs could undermine incentives for small businesses that do not currently offer employer-sponsored plans to establish their own plans in the future. In addition, some small businesses that do have their own plans might be incented to drop them and let the state cover their employees.

Continue Reading for Free

Register and gain access to:

  • Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.